Rethinking Capitalism: How Very Enterprising
This week I attended the Washington premiere of Michael Moore's "Capitalism: A Love Story." It was my first trip ever down the red carpet, and I was a bit disappointed that "Entertainment Tonight" wasn't there to comment on my wardrobe (black jacket over open-collared tattersall shirt) or get my reaction to the film ("Entertaining propaganda -- * *.") But, hey, it's not every day you get to watch a documentary about the housing crisis and Wall Street greed while sitting across the aisle from Frank Raines, the ousted chairman of Fannie Mae. Frank didn't stick around for the big after-party. Neither did I.
Moore's "love story" is really an oversimplified political melodrama based on half-truths, innuendo, fuzzy thinking and imagined conspiracies, held together by some genuinely funny gags, such as Moore wrapping a crime-scene tape around the New York Stock Exchange or backing up an armored car to the front door of Goldman Sachs with the intention of retrieving the bailout money it got from the government.
The fundamental fallacy of the film is its assertion that Moore's home town of Flint, Mich., is somehow a metaphor for the rest of the American economy, a middle-class idyll transformed into an industrial wasteland by corporate executives so intent on breaking unions that they deliberately destroyed their own companies. In the World According to Moore, Silicon Valley and Seattle and the middle-class oasis of Orange County, Calif., simply don't exist. He even manages to spin a populist fantasy that last year's financial meltdown was, in fact, a faux-crisis manufactured by Wall Street to railroad Congress into passing a $700 billion bailout and to engineer a financial "coup d'etat."
The curious thing about this movie, however, is that while many of its small points are exaggerated or misinformed, Moore's largest point is essentially correct: that the economic system no longer works for the majority of Americans.
For me, the most powerful moments in the movie weren't the interviews with displaced homeowners, laid-off workers or grieving widows, but those with a trio of Catholic clergymen who minced no words in declaring the moral bankruptcy of modern American capitalism. It was clear they had come to their conclusions not from any radical ideology or deep understanding of economics but from the inequity and insensitivity they observed in their parishes. As it happens, their outrage is shared by their boss, Pope Benedict XVI.
"Profit is useful if it serves as a means toward an end," declared the pope in an encyclical issued by the Vatican this summer. "Once profit becomes the exclusive goal, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and creating poverty." Benedict decried the "speculative use of financial resources that yields to the temptation of seeking only short-term profit, without regard to the long-term sustainability of the enterprise and its benefit to the real economy."
What's going on here is not simply the moralizing of clerics and filmmakers. Nor, I think, is it merely a reflection of the difficult economy. After nearly two decades of booms and busts that have yielded little in the way of economic gain for the typical household, Americans have developed a profound distrust of the markets, financiers, big business and the capitalist ethos.
I got a taste of that last week when I attended a day-long ceremony celebrating the opening of the Center for Social Value Creation at the University of Maryland's business school. The school's dean, Anand Anandalingam, explained that the impetus for the center came not from the administration or even the faculty but from business students who were looking for more meaning and social purpose in their careers than simply making a lot of money for themselves and for shareholders.
The first speaker was Seth Goldman, the founder of Bethesda-based Honest Tea, who was treated as something of a rock star by the students who packed the auditorium. Goldman doesn't apologize for getting rich by selling healthy, organic beverages, or taking on as his partner and largest investor Coca-Cola, a company best known for peddling sugared and caffeinated beverages. As Goldman explained to the audience -- and later in a video interview for The Post's On Leadership Web site -- his aim is to change the culture and values of the beverage industry before they change him.
Alan Webber, the founder of Fast Company magazine, got a round of applause from the Maryland students when he declared that in a knowledge economy, the way companies compete is to attract the best talent -- talent that these days is motivated less by money than the desire to work in a place where they can learn, grow and have an impact on the world.
Also on hand was Rosabeth Moss Kanter, a Harvard Business School professor who has been celebrating the achievements of Corporate America for decades. Kanter is still celebrating, but these days she's cheering for companies that have gone beyond maximizing shareholder value, and even beyond corporate social responsibility, to embrace a more ambitious mission of the world's problems. In a new book, "SuperCorp," she argues that companies that imbue their culture with a social ethic wind up making more money for their shareholders, not only because their employees are more motivated but also because their focus on a transcendent external goal makes them less resistant to internal change.
None of this is meant to suggest that a new form of capitalism is about to take hold. But it is a reminder that the big reason capitalism has proven the least-bad economic system is that it is best at correcting its own excesses. After all, only in a capitalist country can you turn a profit making movies about the evils of capitalism.
Steven Pearlstein can be reached at email@example.com.