In June of 1970 I attended the General Assembly of the Unitarian Universalist Association in Seattle as the Boeing Company was downsizing. I will never forget the depressing sign at the city limits: "Will the last one to leave Seattle, please turn out the lights?" My B & B host was a downsized engineer who had worked for Boeing company for over 2 decades; he was in a state of shocked depression.
The 1998 General Assembly is coming to Rochester and I have a feeling of foreboding. When Eastman Kodak sneezes, Rochester gets a cold, though no longer pneumonia, because Kodak's influence is steadily diminishing. Nonetheless, Kodak remains the flagship company of the Imaging Centre of the World. There is trouble in the yellow box and in the Flower City. What's happening? More important, what should be happening?
Over the years, I have had an ambivalent relationship with Kodak. A considerable, though shrinking, part of my salary comes from Kodak employees. I own stock in the company. But I have also taken that company to task now and then when I feel it is not living up to the highest ethical standards.
I have spoken at two stockholder meetings urging company withdrawal from then-apartheid South Africa. I was greeted with the moans, groans and angry looks of other stockholders for daring to raise an ethical issue in an annual meeting. It was like tilting at windmills, though Kodak eventually did withdraw - later returning to a free South Africa. I have remained a loyal, but not laconic, stockholder.
I have also had an ambivalent relationship with corporate America. My attitude toward capitalism brings to mind the story of Margaret Fuller, a 19th century Unitarian feminist. While visiting England, she told historian Thomas Carlyle, "I accept the Universe!" His response was, "By God, you'd better." That's the way I feel about capitalism. I have a begrudging respect for its productive power, but less for its distributive capacity. I don't much like the self-interested ethic that undergirds it, but I accept it as a given which needs both moral scrutiny and ethical repair. There ought to be a creative tension between economics and ethics, between capitalism and religion, and I like to be in the middle of it.
My main problem with the free market economy is defined in the image offered by Joseph Campbell, who noted that for centuries the church was the dominant architectural feature of the town; two centuries ago the political structure dominated the skyline. Now business silhouettes tower over the city. Marketplace values have come to dominate both religious and political institutions. Politicians, including the President, are bought by it - and religion is powerless against it. Justice is a word seldom heard.
A few examples: Milton Friedman, Nobel laureate in economics, seems to equate "social responsibility" in business with socialism. For him the sole purpose of business is to make a profit - anything else just gets in the way. My ethics tell me that people are to be treated as ends, not means, in all areas of human life. Friedman would treat profit as an end and people as a mere means.
After all, what is the purpose of a corporation? Profit or something more fundamental? The modern corporation was established in the last century for aggregating financial resources "to serve the public interest and necessity," or as the Supreme Court put it in 1906, "The corporation is a creature of the state. It is presumed to be incorporated for the benefit of the public." As such I believe the corporation is a moral actor with social responsibilities to its workers, its community and its environment, as well as its stockholders.
Sometimes I think the Friedman ideal is a profitable company with one superrich CEO and no other employees - they're such a drag - so economically inefficient. As the great British economist John Maynard Keynes said, "Capitalism is the extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of all."
Accordingly, I nominate as the most arrogant man in America Al "Chainsaw" Dunlop, who appears to take great delight in downsizing companies "to save them." Called "Rambo in pin stripes," he cut 6000 jobs at a Sunbeam plant and received a three-year, $70 million contract. Modestly, he said, "You can't overpay a great executive." Yet on March 20 Sunbeam reported first quarter sales may be less than expected and shares are down 9.4%. When asked what we should do with newly unemployed workers, I heard this arch conservative tell Ted Koppel that the government should hire them in a modern version of the Civilian Conservation Corps. I somehow doubt Al would urge a tax hike to pay for it. Dunlop's persona reminds me that 70% of the American people believe that their financial situation is "at least somewhat" reflective of "God's regard for them."
And then there is Alan Greenspan, Chairman of the Federal Reserve Board, arguably the most powerful person in America. Addressing Jesse Jackson's Rainbow/PUSH Coalition Wall Street Project, which aims to increase minority representation in the financial world, Greenspan said that discrimination "is now increasingly being seen as unprofitable." Right, but might it also be morally wrong? Must we define all our values in terms of the market place? But, he's right, because the market doesn't pay much attention to moral arguments.
And then last week there were rumors of Xerox downsizing, despite a 20% increase in profits for 1997, and an increase in sales of 4.5% with record high share values. And, of course, CEO Paul Allaire, now making a paltry $5 million or so a year, will probably get a pay hike and stock price will go up again once the ax falls.
Have these CEO's no shame? How must it feel to make 10, 20 or 50 times as much as the President of the United States while firing thousands of workers and, according to Business Week, often with little or no relation to the financial success of their company?
Richard Scott of Columbia/Health Maintenance Organization, before his legal troubles, demanded a 20% annual profit, cutting back on services while he made a million dollars a month. He wrote, "Do we have an obligation to provide health care for everybody? Where do we draw the line? Is any fast-food restaurant obligated to feed everyone who shows up?"
Here we have what William James called "the moral flabbiness born of the exclusive worship of the bitch-goddess success."
On the other hand, there are many conscientious capitalists. There is the controversial Aaron Feuerstein of Methuen, Massachusetts, whose fabric factory went up in flames taking 3100 good-paying jobs with it. Instead of using the fire as an excuse to rebuild in Mexico for cheaper labor and larger profits, he vowed on the spot not only to rebuild, but to keep his employees on with full pay and benefits while he did so. Now Malden Mill is fully modernized, 95% of the employees are back on the job, and business had been brisk until recently. Of course, this is a privately held corporation. I suspect Wall Street would never have let him get away with that kind of altruism. It doesn't compute.
But what about Eastman Kodak? Alecia Swasy's fascinating story of "... the Battle to Save a Great American Company," Changing Focus, is a depressing tale of a once-proud company struggling to survive. I was intrigued because I always thought of Kodak executives as somehow infallible. It turns out they are mere men and women who make mistakes - big ones. Kodak corporate cockiness, poor judgment and a rapidly changing global economy have undermined Kodak's hegemony in the marketplace and plunged it into deep trouble.
George Eastman started from scratch and built a world class business, paternalistic in the extreme, but successful. He believed in social responsibility beyond profit, and his legacy lingers, even though the company he built is on the ropes. From George Eastman to George Fisher is a great leap. Fisher is, by all accounts, a "nice guy," but we know where nice guys finish in today's climate.
Even the latest round of job cuts doesn't satisfy Wall Street analysts about whom he once said, "I don't know how many of these people have ever run a company." It doesn't really matter, because they and the investors they advise have the money Kodak needs so desperately. And so, though he had earlier predicted the turnaround would take several years, he underestimated, and the Street is not known for its patience. He is dancing to their tune, but evidently not hard enough.
Noting disappointing earnings last year Fisher said, "We are collectively embarrassed." However, those who were "de-selected" were more than embarrassed - they are out of work. A 30-year Kodak veteran, describing life on the shop floor, said, "It's like they line up 100 of us in front of the firing squad and say, 'Don't worry, folks, we've only got 35 bullets.'"
"Why are we in this situation?" Fisher asked in a recent Democrat and Chronicle Op-Ed piece. "Because we have not delivered enough sales growth to meet Kodak's primary performance objective: average annual growth in earnings per share of at least 10% over time."
Now where did this 10% target come from? The shareholders? The employees? Mr. Fisher? God? Would a growth of 5% not be adequate? Most of us would love to have a 5% increase in income every year. Failure to meet this abstract and perhaps arbitrary goal is undermining the well-being of our community's families. They are paying with their jobs for the blunders past and present, with exit benefit not quite like a golden parachute.
As a company Kodak has a mixed record in social responsibility: it is one of the ten largest corporate polluters in the nation, though it also has the largest manufacturing complex in the Northeast. The company has paid fines for its pollution, and the recent series on the "cancer cluster" near Kodak Park certaintly raises serious questions, though Kodak is making real efforts in this area. Kodak has a decent record of work force diversity and is very progressive, along with Xerox, in implementing a domestic partnership policy in terms of benefits.
But a case study of Eastman Kodak is only indicative of what is happening in many places. It is competition gone out of control. It is profit subsuming all other human goals. It is economic interests trumping all other community values. Corporations now rule the world - and most of us are simply pawns in the process.
As John Steinbeck knew, the bank, symbolic of the invisible and impersonal hand of the market, will not be denied. It is the bank that forecloses, the bank that decides to move companies to cheaper locales, the bank that controls our lives. Except that the bank is human beings - like you and me - there is no mystical force like the bank which crushes us - the bank is people. And as Steinbeck's tenant farmer said, "There's some way to stop this. It's not like lightning or earthquakes. We've got a bad thing made by men, and by God, that's something we can change."
What should we do? To begin with Mr. Fisher and other managers responsible for the corporation's situation might take a voluntary pay cut from their economically redundant salaries - not just give up bonuses. I suspect most of us don't know we taxpayers are subsidizing them - since CEO salaries are corporate tax write-offs. -They might follow the example of the President of Pepsi, who has funded scholarships for his lowest paid workers. To be sure, it would be a mostly symbolic gesture, but it would perhaps help us understand that we are all in this together.
While Kodak was a paternalistic company with great pay and benefits, folks didn't think much about the "U" word, union. They're so - well - un-Rochester. But now that we are in the brutal world of corporate competition, workers are essentially helpless without them. If I worked for Kodak right now, I would seek out the nearest union organizer and sign up. It would be nice to have some say in my economic destiny.
We need to renegotiate the compact between corporations and their communities. I believe corporations have a social responsibility - to make a profit yes, but not at the expense of the environment, or the well-being of employees now so pressured they work more out of fear than faith in the enterprise, or the community which sustains them in so many ways.
Our community must hunker down. We can no longer think of city and suburb, but of one people caught up in powers that threaten to overwhelm us. We must think of ways to more equitably distribute the wealth among us, unless we really want a society of economic apartheid. On a larger scale we must seriously consider a shorter work week to create more jobs with a living wage for all.
Most of all we need a change in spiritual consciousness. We need a protest against the dominance of market values in our lives. We need to distinguish the love of life from making a living at the mercy of the market. We need to rediscover the meaning of local community and commit ourselves to the place where we live.
I know, it is a winsome hope of a naive minister, but I hate to see our culture succumb to the brutality of the global economy. It is fundamentally a spiritual struggle against all odds - which is why I can so strongly identify with St. Jude, the patron saint of lost causes.
But I try to keep up my sagging spirits with a sense of humor. The boy Calvin once said to Hobbes: "The more you know, the harder it is to take decisive action. Once you become informed, you start seeing complexities and shades of gray. You realize that nothing is as clear and simple as it first appears. Ultimately, knowledge is paralyzing. Being a man of action, I can't afford to take that risk." Hobbes: "You're ignorant, but at least you act on it."
Well, perhaps I am, and I do. But I feel something deeply wrong in our nation and the world when we have the means to create a truly just society, but continue our self-destructive ways by deliberately increasing the gap between haves and have-nots. Like the prophets of old I must speak what I believe is truth to power. The invisible hand of the market must be tempered by the caring eye and the generous heart if we are to build the Beloved Community.