The Common Good Page 4
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Other ideas about what we owe one another originated in legal compacts dating back to the Babylonian Code of Hammurabi from Mesopotamia, around 1750 BC, and to Roman law and the principles of civis romanus sum (“I am a Roman citizen”). Although many inhabitants of these ancient societies were serfs or slaves without rights of citizenship, those who gained citizenship pledged to treat other citizens as equals under the law. In the eleventh and twelfth centuries, various European cities came into existence through similar acts of oath-taking and contract-making. The Flemish charter of Aire promised that each would “help the other like a brother.” As the perimeters of citizenship expanded—from the Magna Carta (1215), to the British Bill of Rights (1689), to the U.S. Constitution (1787)—so did these ideas about equal political rights and mutual obligation. None of these expansions came easily; many necessitated harsh struggle and at times troubling compromise. Women did not get the right to vote in the United States until 1920. Despite the Civil Rights Act of 1965, many blacks today are still effectively denied the equal rights of citizenship and equal opportunity. Same-sex couples eventually gained equal marriage rights in 2015. America continues to engage in a fierce debate over which immigrants to our shores should be granted citizenship, and how noncitizens should be treated.
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Our compact is not just with those who are alive today. It’s also with those who have come before us and those yet to be born. To the founding fathers, the Constitution and our system of government established a moral bond connecting generations. “There seems…to be some foundation in the nature of things, in the relation which one generation bears to another, for the descent of obligations from one to another,” wrote James Madison. “Equity may require it. Mutual good may be promoted by it. And all that seems indispensable in stating the account between the dead and the living is to see that the debts against the latter do not exceed the advances made by the former.” The young Abraham Lincoln understood this moral bond explicitly: “We find ourselves under the government of a system of political institutions, conducting more essentially to the ends of civil and religious liberty, than any of which the history of former times tell us,” he said in his first important public speech, in 1838. “We, when mounting the stage of existence, found ourselves the legal inheritors of these fundamental blessings. We toiled not in the acquirement or establishment of them—they are a legacy bequeathed to us, by a once hardy, brave, and patriotic, but now lamented and departed race of ancestors.” Twenty-three years later, in his first inaugural address, Lincoln referred to it as America’s “mystic chords of memory,” a covenant linking past and future.
It was that covenant—not any particular race, religion, or ethnicity—that gave America its ideals and identity. “The American trick,” political philosopher Benjamin Barber has noted, “was to use the fierce attachments of patriotic sentiment to bond a people to high ideals.” The “tribal” sources from which we derive our sense of national identity, Barber argues, are the documents and statements that enunciate those ideals—the Declaration of Independence, the Constitution and the Bill of Rights, the inaugural addresses of some of our presidents, Lincoln’s Gettysburg Address, and Martin Luther King, Jr.’s, “free at last” sermon at the 1963 March on Washington. These documents and statements themselves don’t bind us; it’s the sentiments behind them that do. They connect us with the ideals and responsibilities espoused by previous generations. They remind us to leave them to future generations.
These generational attachments form the tacit subtext of our daily conversations about American life, permeating both American conservatism and American liberalism, and the essential point is that they are fundamentally noble, essentially life-affirming sentiments. Much is made of the American political distinctiveness of a Constitution inspired by theory rather than by tradition. But there is a subtler yet equally profound cultural distinctiveness as well, a national sense of identity rooted in a history of self-told mythology. Political scientist Carl Friedrich captured the distinction in 1935: “To be an American is an ideal, while to be a Frenchman is a fact.” That idealism led Lincoln to proclaim that America might yet be the “last best hope” for humankind. It prompted Emma Lazarus, some two decades later, to welcome to America the world’s “tired, your poor / Your huddled masses yearning to breathe free.” It inspired Scottish immigrant Frances Wright—feminist, abolitionist, and advocate of free public education—to write, “What is it to be an American? Is it to have drawn the first breath in Maine, in Pennsylvania, in Florida, or in Missouri? Pshaw! Hence with such paltry, pettifogging calculations of nativities! They are Americans who have complied with the constitutional regulations of the United States…wed the principles of America’s declaration to their hearts and render the duties of American citizens practically to their lives.” And it allowed Supreme Court justice Hugo Black to sum up America’s sense of the common good as a “constitutional faith.”
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To summarize, the good we have had in common has been a commitment to respecting the rule of law, including its intent and spirit; to protecting our democratic institutions; to discovering and spreading the truth; to being open to change and tolerant of our differences; to ensuring equal political rights and equal opportunity; to participating in our civic life together, and sacrificing for that life together. Note that these are not the constitutional rights and freedoms we possess as citizens. They are the essential elements of what we owe one another as Americans. We passionately disagree about all manner of things. But we must share these commitments to each other because they are—or have been—what makes us a people. Although we have often fallen short of achieving them, they are ideals that we have strived to realize. They have informed our judgments about right and wrong, decisions we make that could affect others, and our understanding of our obligations as citizens. They have bound us together. They are large and noble obligations.
The central moral question of our age is whether we are still committed to them.
PART II
What Happened to the Common Good?
CHAPTER 4
Exploitation
LET ME PUT IT THIS WAY: The common good is a pool of trust built up over generations, a trust that most other people share the same basic ideals I’ve just discussed. This pool of trust has great value. It makes everyone’s lives simpler and more secure. But precisely because it has so much value and is maintained voluntarily, it has been possible for some individuals to exploit it for their own selfish gain.
In any social system it’s possible to extract benefits by being among the first to break widely accepted unwritten rules. Think about a small town where people don’t lock their doors or windows because of the unwritten rule that no one steals. Under these circumstances, the first thief to commit robberies operates at a huge advantage. He can effortlessly get into anyone’s house. That first-mover advantage disappears as soon as people catch on and start locking their doors and windows.
Modern societies are filled with tacit rules that can be exploited by people who view them as opportunities for selfish gain rather than as social constraints. “I never thought anyone could do that” is the typical response of everyone else—to whom it literally never occurred that someone would take advantage of the unwritten rule. But after the exploitation occurs, the rule inevitably changes to the equivalent of “people do steal, so lock your doors and windows.” Thereafter everyone else has to take steps—often inconvenient, time-consuming, or costly in other ways—to prevent the exploitation from recurring.
Sometimes laws have to become far more detailed and complex. The first high-priced tax attorney to discover an ambiguous provision in the tax code that allows his wealthy client to save a bundle has a first-mover advantage, until the code is amended with a more detailed provision blocking the maneuver. But as a result, everyone thereafter has to grapple with a tax code that�
��s a bit more complicated. Multiply this by every high-priced tax attorney looking for ambiguous provisions and you discover why the tax code has become as complicated as it is.
Trust can disappear altogether. If honest used car dealers can’t differentiate themselves from dishonest ones, they may figure there’s no point in making sure their cars are reliable. Eventually, no one trusts used car dealers. If a few members of Congress retire to become well-paid lobbyists for industries they once oversaw, other members of Congress will have fewer qualms about doing the same. Eventually, so many turn to lobbying that the public stops trusting members of Congress to act in the common good when they’re in office.
If exploitation isn’t contained, competitive forces can erode standards. After one pharmaceutical company jacks up the price of a life-saving drug, CEOs of competing companies with life-saving drugs will be pressured by their investors to do the same. If one corporation awards its CEO an unprecedented large pay package, other companies will be under pressure to match it. Political standards can similarly erode. If a candidate is elected because she broke the unwritten rule not to flood the Internet with fake information about her opponent, future candidates will feel less hesitant to flood the Internet with fake information. If a presidential candidate refuses to release his tax returns and suffers no consequence, future candidates will feel less obliged to release theirs. Once norms are broken without consequence, further breakage ensues.
If there are no consequences, norm-breakers can reap enormous gains while the costs of the norm-breaking are shifted to everyone else—locks that have to be purchased; laws that have to become more detailed; monitors, accountants, and security personnel who must be hired; added red tape that hobbles all transactions; and the enmity and distrust that can begin to envelop an entire economic and political system.
Several years ago political scientist James Q. Wilson noted that a broken window in a poor community, left unattended, signals that no one cares if windows are broken there. Because nobody is concerned enough to enforce the norm against breaking windows, the broken window becomes a kind of invitation to throw more stones and break more windows. As more windows shatter, other aspects of community life also start unraveling. The unspoken norm becomes: Do whatever you want here because everyone else is doing it.
The “broken window” theory has led to such picayune and arbitrary law enforcement that it has failed many poor communities. Meanwhile, law enforcers have often disregarded the largest windows in our society that have been shattered by the most prominent stone throwers. As I shall show, around five decades ago a few people with wealth and power began exploiting social trust in order to gain even more wealth and power. Then, seeing how easily it was done and how richly they were rewarded, others followed. The exploiters said, in effect: “I’m going to amass as much wealth and power as I can, whatever it takes. Being decent and responsible is for losers.” As America produced a wave of Martin Shkrelis, the unwritten rules that once defined and enforced the common good began to erode.
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Here’s a rough timeline of the breakdown since the mid-1960s.*
1964 Gulf of Tonkin. Lyndon Johnson justifies a sharp escalation of the Vietnam War by falsely claiming that North Vietnam launched an “unprovoked attack” against a U.S. destroyer on “routine patrol” in the Gulf of Tonkin, followed by a “deliberate attack” on a pair of U.S. ships.
1971 The Pentagon Papers. A leaked Defense Department report shows that while the Johnson administration promised not to expand the Vietnam War, it secretly did so.
1971 Lewis Powell memo. The future Supreme Court justice summons business leaders to use their economic muscle aggressively to gain political influence.
1972–74 Watergate. The headquarters of the Democratic National Committee at the Watergate complex in Washington, D.C., is broken into by a covert operation set up by Richard Nixon’s White House, followed by cover-ups by Nixon and his top assistants. Nixon also maintains an “enemies” list and uses the FBI to harass those on the list.
1980 The Abscam scandal. After an FBI sting operation, seven members of Congress are convicted of accepting bribes in return for various political favors.
1985 Carl Icahn makes a hostile takeover of TWA. The raider then sells TWA’s assets to repay the debt he used to purchase the company.
1986–95 The Savings and Loan scandals. More than 1,000 out of 3,234 savings and loan banks fail, at a total cost to taxpayers of $132.1 billion. Several politicians are implicated for taking bribes.
1986–87 The Iran-contra scandal. President Ronald Reagan’s national security team conspires to sell American weapons to the Iranian Revolutionary Guard and, after marking up the price fivefold, skims the proceeds of those sales and gives them to the anticommunist contra rebels in Nicaragua. This is a direct violation of federal law cutting off aid to the rebels. Reagan initially denies it occurred. Several years later, President George H. W. Bush pardons the major Iran-contra perpetrators before their criminal trials are scheduled to start.
1987 Robert Bork’s rejection. After a vicious confirmation battle over Republican Bork’s nomination to the Supreme Court, he is defeated by virulent partisan opposition.
1990 Michael Milken conviction. The corporate raider, who headed the junk bond division of the Wall Street investment firm Drexel Burnham Lambert, is convicted following a guilty plea on felony charges for violating U.S. securities laws.
1991 Keating Five scandal. Five senators are found to have obstructed an investigation of the savings and loan industry after they received political contributions from these businesses. (In 1989, Democratic House majority whip Tony Coelho resigned from Congress after revelations of unethical conduct involving the savings and loan industry and junk bonds.)
1992 House banking scandal. House members are found to have benefited from special banking privileges. Four former congressmen are convicted of criminal wrongdoing.
1993–98 Whitewater scandal. Charges of illegal activities involving land deals financed by the Clintons during the 1980s lead to convictions of several Clinton friends, business associates, a municipal judge, and the governor of Arkansas.
1995 Dan Rostenkowski scandal. House Ways and Means Committee chairman Rostenkowski is convicted of embezzlement.
1995 United Way scandal. The charity’s longtime national CEO, William Aramony, and two other top officials are convicted of stealing from it to support lavish lifestyles. Several other local United Way CEOs are subsequently convicted of stealing from the charity.
1995 Government shutdown. A breakdown in negotiations between President Bill Clinton and House Speaker Newt Gingrich over the federal budget causes the first-ever shutdown of the entire federal government.
1997–98 Newt Gingrich reprimand. The House reprimands and fines House Speaker Gingrich for improper financial deals. He subsequently resigns.
1998 The Rampart scandal. Widespread corruption in the Los Angeles Police Department’s antigang unit implicates more than seventy police officers for unprovoked beatings, planting false evidence, unprovoked shootings, stealing and dealing narcotics, bank robbery, perjury, and covering up evidence of these activities.
1998–99 Clinton impeachment. Bill Clinton is impeached for perjury and obstruction of justice for falsely testifying that he did not have sexual relations with a White House intern. Clinton is then acquitted in the Senate trial.
1999 Financial derivatives. The Clinton administration is asked by the chairman of the Commodity Futures Trading Commission to regulate financial “derivatives.” Pressured by Wall Street, the administration refuses.
1999 Repeal of the Glass-Steagall Act. Clinton joins with congressional Republicans in repealing the act, which since the 1930s had separated commercial banking from investment banking.
2000–2007 Wall Street gambles. Taking advan
tage of deregulation, major Wall Street banks underwrite risky mortgages, mix them in with safe securities, and resell the packages to unsuspecting investors. Major credit-rating agencies, eager to maintain their relationships with the banks, give the packages AAA ratings.
2001 The war against terrorism. Five days after the September 11 attacks, Vice President Dick Cheney warns that the White House will need to go over to ‘‘the dark side’’ to fight al Qaeda. Among the dark places the White House goes are a top secret program code-named Stellar Wind, under which the National Security Agency eavesdrops freely in the United States without search warrants, and the use of torture on suspects, in violation of the Geneva Accords.
2001 Red Cross scandal. In the wake of the attacks, the Red Cross raises more than a half billion dollars, promising all donations will go to victims and their families. A congressional investigation reveals that roughly half of the donations are reallocated to other operations of the Red Cross. Red Cross’s head, Bernadine Healy, resigns.
2001–2002 Corporate looting and inside-information scandals. Several major companies including Adelphia, Tyco, WorldCom, and Enron fake profits and hide debt off the books. Former Enron CEO Jeffrey Skilling is sentenced to prison. Businesswoman and TV personality Martha Stewart serves a brief prison sentence for insider trading.
2002 Arthur Andersen scandal. The accounting firm is convicted of obstruction of justice for shredding Enron-related documents. The firm subsequently folds.
2002 Auction house price-fixing scandal. Sotheby’s and Christie’s auction houses, controlling 90 percent of the high-end auction market, are found to have engaged in a price-fixing conspiracy. Sotheby’s chairman, billionaire Alfred Taubman, is fined and jailed.
2003 Dot-com bubble scandals. After the “dot-com bubble” bursts, the SEC finds that every major U.S. investment bank assisted in efforts to defraud investors, such as urging them to buy shares in dot-com companies that the banks’ own analysts were privately describing as junk. All leading public accounting firms admit negligence in executing their duties, and pay fines.