In light of the recent news that 10% (0r $70 billion) of the bailout’s $700 billion is going directly to bonuses for the criminals that got us into this financial quagmire, I thought it appropriate to offer this quick assessment and summary of the situation from Hervé Kempf, author of How the Rich are Destroying the Earth.
The following has been adapted for the web from How the Rich are Destroying the Earth:
The dictionary defines oligarchy as “1: government by the few 2: a government in which a small group exercises control, esp. for corrupt and selfish purposes; also: a group exercising such control.”
Today, the planet is ruled by an oligarchy that accumulates income, assets, and power with a zeal for greed not seen since the U.S. “robber barons” at the end of the nineteenth century.
In 2005, according to a Standard and Poor’s study, the average remuneration for the CEOs of the 500 largest companies in the United States rose to 430 times that of the average worker—ten times more than in 1980. The Sunoco boss, John Drosdick, received $23 million a year; the AT&T boss, Edward Whitacre, $17 million; U.S. Steel’s John Surma, $6.7 million; Alcoa’s Alain Belda, $7.5 million. Leaving these companies is an opportunity to cart off a bundle. In December 2005, Lee Raymond, CEO for Exxon, the world’s biggest oil company, was able to salve the sorrow of his departure with a $400 million package. The Occidental petroleum boss settled for $135 million over three years. Richard Fairbank, Capital One Financial CEO, outperformed him at $249 million when he exercised his stock options in 2004.
In 1989, Peugeot CEO Jacques Calvet created a scandal when he treated himself to a 46 percent salary increase over two years—at $480,000 he earned more than 30 times the salary of an employee in his company. Today, his CAC 40 colleagues earn more than 100 times more than a minimum-wage employee. In 2000, Le Monde reported, the “management guru Peter Drucker” warned: “Thirty years ago, the highest multiplier between a company’s average salary and its highest salary was 20. Now, we are closing in on 200. It’s extremely pernicious. The banker J. P. Morgan, whom we know liked money very much, had a fixed rule that top management should not have a salary exceeding twenty times the average. That rule was very wise. Today, there’s an inordinate attention paid to income and wealth. That totally destroys the spirit of teamwork.” Mr. Drucker may be a “guru,” but the executives did not listen to him.
The most startling thing in this “bacchanalia,” to use Forbes’s expression, is that it’s not the employees or the Left hotly protesting this organized hold-up, but the shareholders and investors who recognize that this upward distribution of corporate revenues is occurring at their expense.
A Blind Oligarchy
That a caste of oligarchs, a layer of the hyper-rich, exists is not in itself, seen from Sirius, a problem. It was frequently observed in the past that possession of power went hand in hand with the appropriation of great wealth. History is, in part, the tale of the ascension and then inevitable fall of such groups.
However, we are not on Sirius but on planet Earth. And we are at a specific moment in history, the twenty-first century, which poses a radically new challenge for the human species: for the first time since the beginning of its expansion more than a million years ago, it is running up against the biospheric limits of its prodigious dynamism. To truly live at this time means we must collectively find the paths to reorient this energy in other directions. It’s a magnificent—but difficult—challenge.
But this predatory and rapacious ruling class, wasting its substance, misusing power, stands immobilized as an obstacle in those paths. It bears no plan, is animated by no ideal, delivers no promise. The aristocracy of the Middle Ages was not an exploitative caste only; it dreamed of building a transcendent order, dreams to which Gothic cathedrals splendidly bear witness. The nineteenth-century bourgeoisie that Karl Marx described as a revolutionary class exploited the proletariat but also felt it was propagating progress and humanist ideals. The ruling classes of the Cold War were borne along by the will to defend democratic freedoms in the face of a totalitarian counterexample.
But today, after triumphing over Sovietism, capitalism doesn’t know how to do anything but celebrate itself. All spheres of power and influence have been swallowed by capitalism’s pseudo-realism that asserts that any alternative is impossible and that the only end to pursue in order to soften the inevitability of injustice is to eke out ever more wealth.
This would-be realism is not only ominous; it is blind. Blind to the explosive power of manifest injustice. And blind to the poisoning of the biosphere that the increase in material wealth produces, poisoning that means deterioration in the conditions for human life and the squandering of the chances of generations to come.