The Common Good

by Robert B. Reich

Americans sharply disagree about exactly what we want for America or for the world. But we must agree on basic principles—such as how we deal with our disagreements, the importance of our democratic institutions, our obligations toward the law, and our respect for the truth—if we’re to participate in the same society. It’s our agreement to these principles that connects us, not agreement about where these principles lead.

The followers of Ayn Rand who glorify the “free market” and denigrate “government” are fooling themselves if they think the “free market” gets them off this Shkreli hook. The market is itself a human creation—a set of laws and rules that define what can be owned and traded, and how. Government doesn’t “intrude” on the “free market.” It creates the market.

Truth itself is a common good. Through history, one of the first things tyrants have done is attack independent truth-tellers—philosophers (Plato), scientists (Galileo), and the free and independent press—thereby confusing the public and substituting their own “facts.” Without a shared truth, democratic deliberation is hobbled. “Alternative facts” are an open invitation to what George Orwell described as “doublethink,” in which the public is so confused it cannot recall the past, assess the present, or contemplate the future.

As Augustine said, “Nothing at all of human society remains safe, if we shall determine to believe nothing, which we cannot grasp by full apprehension.”

If those who feel left behind view the system as rigged against them, they can push open societies into becoming closed and autocratic. Where a sense of common good is lacking, demagogues can use the anger and fear accompanying disruptive change to turn people against one another rather than address the traumas that made them angry in the first place. Societies experiencing economic stresses and widening inequalities are particularly vulnerable to tyrants intent on undermining democratic institutions by lying repeatedly, accusing critics of conspiring against “the people,” fueling racial and ethnic divisions, and inciting rabid nationalism. —

Our core identity—the most precious legacy we have been given by the generations who came before us—is the ideals we share, the good we hold in common. If we are losing our national identity, it is not because we are becoming browner or speak in more languages than we once did. It is because we are losing our sense of the common good.

Early in his administration, Trump’s foreign policy team flatly rejected the idea that the world is a “global community,” in favor of the zero-sum fallacy that the world is “an arena where nations, nongovernmental actors, and businesses engage and compete for advantage.”

A love of country based on the common good entails obligations to other people, not to national symbols. Instead of demanding displays of respect for the flag and the anthem, it requires that all of us take on a fair share of the burdens of keeping the nation going—that we pay taxes in full rather than seek tax loopholes or squirrel away money abroad, that we volunteer time and energy to improving the community and country, serve on school boards and city councils, refrain from political contributions that corrupt our politics, and blow the whistle on abuses of power even at the risk of losing our jobs.

Education is a public good that builds the capacity of a nation to wisely govern itself, and promotes equal opportunity. Democracy depends on citizens who are able to recognize the truth, analyze and weigh alternatives, and civilly debate their future, just as it depends on citizens who have an equal voice and equal stake in it. Without an educated populace, a common good cannot even be discerned. This is fundamental. When education is viewed as a private investment yielding private returns, there is no reason why anyone other than the “investor” should pay for it. But when understood as a public good underlying our democracy, all of us have a responsibility to ensure that it is of high quality, and available to all.

We can’t hate our government, for it is the means by which we can come together to help solve our common problems. We may not like everything the government does, and we justifiably worry when special interests gain too much power over it, but our obligation is to work to improve government, not undermine it.

republic would succumb to authoritarian rule. They didn’t try to create the most efficient system of governance, or one that would generate the most wealth. They wanted a system that would produce the most virtuous people. “Is there no virtue among us?” asked James Madison, rhetorically. “If there be not, no form of government can render us secure.

Almost two centuries later, Martin Luther King, Jr., applied the same logic to the struggle for civil rights in America. “The ultimate tragedy is not the oppression and cruelty by the bad people but the silence over that by the good people.”

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.

During the first two years of his presidency, when Democrats controlled both houses of Congress, Obama was able to enact legislation without any Republican input or cooperation. In 2010 Democrats enacted the Affordable Care Act without a single Republican vote. Not surprisingly, after Republicans assumed control of the House in January 2011 and the Senate in January 2015, they escalated whatever-it-takes partisanship—obstructing nearly everything Obama wanted to do—and sought to repeal the Affordable Care Act.

Starting in the 1980s, though, as a result of the corporate takeovers mounted by raiders such as Michael Milken—who is credited with inventing the use of high risk “junk” bonds for such raids—as well as Ivan Boesky and Carl Icahn, a wholly different understanding about the purpose of the corporation emerged. The raiders targeted companies that could deliver higher returns to their shareholders if they abandoned their other stakeholders—fighting unions, cutting the pay of workers or firing them, automating as many jobs as possible, and abandoning their original communities by shuttering factories and moving jobs to a state with lower labor costs, or moving them abroad. The raiders pushed shareholders to vote out directors who wouldn’t make these sorts of changes and vote in directors who would (or else sell their shares to the raiders, who’d do the dirty work). During the whole of the 1970s there were only 13 hostile takeovers of big companies valued at $1 billion or more. During the 1980s, there were 150. Between 1979 and 1989, financial entrepreneurs mounted more than two thousand leveraged buyouts, in which they bought out shareholders with borrowed money, each buyout exceeding $250 million. As a result, CEOs across America, facing the possibility of being replaced by a CEO who would maximize shareholder value, began to view their responsibilities differently. Few events change minds more profoundly than the imminent possibility of being sacked. As a result, the corporat...

Corporations have used their profits to give shareholders dividends and buy back their shares of stock—thereby reducing the number of shares outstanding and giving stock prices short-term boosts. All of this has meant more money for the top executives of big companies, whose pay began to be linked to share prices. CEO pay soared from an average of 20 times that of the typical worker in the 1960s to almost 300 times by 2017.

The goal of maximizing profits has leached into sectors of the economy that had once been based on the common good, such as health care. A century ago, hospitals and health insurers had palpable public responsibilities. The original purpose of health insurance plans, devised in the 1920s at the Baylor University Medical Center in Dallas, was not to generate profits. It was to cover as many people as possible. The nonprofits Blue Cross and Blue Shield accepted everyone who wanted to become a member, and all members paid the same rate regardless of age or health. By the 1960s, Blue Cross was providing hospital coverage to more than fifty million Americans. In the 1970s and 1980s, though, some entrepreneurs saw ways to make big money by exploiting this common good. They founded for-profit insurance companies like Aetna and Cigna that, unhampered by the Blues’ charitable mission, accepted only younger and healthier patients. This reduced their costs, enabling them to charge lower premiums than the Blues while still pocketing big profits. The Blues couldn’t possibly compete. So in 1994, Blue Cross and Blue Shield succumbed and became for-profits—marking the end of nonprofit health insurance—turning the American health care system into one that eagerly insured healthy people while trying to avoid sick people, or charging people with chronic health problems a fortune for coverage.

When the only purpose of business is to make as much money as possible in the shortest time frame, regardless of how it’s done, the common good is easily sacrificed. In pursuit of high profits, whatever it takes, CEOs and the corporations they run have ignored or circumvented the intent of laws to protect workers, communities, the environment, and consumers. They abandoned the principle of equal economic opportunity that underlay their obligations to all stakeholders, and have too often put themselves first. Despite his avowed goal to rebuild customer confidence in Wells Fargo, John Stumpf didn’t care about his customers; he apparently cared only about himself. Although Martin Shkreli said he was motivated by investors who “expect me to maximize profits…to 100 percent of the profit curve,” it turned out his real motive was Martin Shkreli.

A few states have enacted “noncompete” laws making it impossible for employees to leave their jobs for new ones unless they can show that the move wouldn’t “adversely affect” their current employer—leaving workers and their wages at the mercy of their bosses.

WOW!!!!

three exploitations of trust set off chain reactions that have undermined the common good: Whatever-it-takes-to-win politics disregarded what had been the unwritten rules of good government, based on equal political rights—enabling the most powerful players to extract all political gains. Whatever it takes to maximize profits rejected what had been the unwritten rules of corporate responsibility, based on obligations to all stakeholders—allowing CEOs, Wall Street, and investors to extract all financial gains. Whatever it takes to rig the economy dismissed what had been the unwritten rule that the “free market” should work for everyone—permitting the most powerful economic actors to extract almost all economic gains. As a result, the key political and economic institutions of our society—political parties, corporations, and the free market—have abandoned their commitment to the common good.

As these parents become increasingly efficient at passing their economic status on to their children, they create an ever more rigid class division in America.

Aristotle warned that excessive inequality can bring political instability. You can see and feel the anger even in mundane situations. As first-class sections of airplanes have become more spacious, they seem to be triggering more incidents of air rage among passengers seated in the back. Researchers Katherine DeCelles of the University of Toronto and Michael Norton of Harvard Business School analyzed “disruptive passenger incidents” in an airline’s database of millions of domestic and international airline flights. They found that flights with a first-class section were nearly four times more likely to have incidents of “belligerent behavior” or “emotional outbursts” in their economy class. Such incidents were even more likely when economy passengers had to walk through the first-class section to get to their seats than when they entered through the middle of the plane and bypassed the first-class section.

reversing the whatever-it-takes forces that have eroded the common good during the past half century poses a daunting challenge. They can’t be reversed through better laws or wiser policies, because in order to make such laws and policies there must first be a strong consensus that they’re necessary, as well as the political power to get them enacted and to enforce them in ways they cannot be circumvented. No such consensus exists and no such power is readily available.

Modern America seems to have misplaced honor and shame. We often honor people who haven’t advanced the common good but have merely achieved notoriety or celebrity, or amassed great wealth or power. We shame people not for having exploited the common good for personal gain but for failing to conform to prevailing ideas about fashion or coolness, or for associating with the wrong people.

Curiously, though, little or no attention is given to how these donors obtained their wealth. They may have violated or skirted laws, paid off politicians, engaged in insider trading or price-fixing, defrauded investors, or even brought the world economy to near ruin because of their disregard for the consequences of their schemes. These behaviors, though, are assumed to be irrelevant to the deal at hand: In return for their donation, they are imbued with moral approval. The subtle message is that the common good doesn’t really count. Wealth and power do.

Such public honoring could be a corrective to what we now do—blindly and automatically bestow honors on rich philanthropists because they’re rich, and celebrities because they’re celebrated.

Shame may be in our genes, helping us survive. Charles Darwin, in his book The Expression of the Emotions in Man and Animals, noted that humans around the world express shame in similar ways—blushing, becoming hot, casting their eyes downward, and lowering their heads. Shame may have evolved as a way to maintain social trust necessary for the survival of a group and, therefore, of its members. In a 2012 paper, psychologists Matthew Feinberg and Dacher Keltner and sociologist Robb Willer found evidence that embarrassment—which often accompanies shame—functions socially as a kind of “nonverbal apology” for having done something that violates group norms. A display of embarrassment shows others that the embarrassed person is still aware of the group’s expectations and is still committed to the group’s well-being.

Corporations have become adept at giving their top guns plausible deniability of knowledge in any nefarious scheme (Goldman executives used the abbreviation LDL—“let’s discuss live”—to hide their traces), and prosecutors are routinely outgunned and outmaneuvered by platoons of high-priced corporate attorneys. Young government prosecutors who want lucrative partnerships in prestigious law firms when they leave government often don’t want to jeopardize their career prospects, so they go easy on individual executives. They view the executives as “good people who have done one bad thing,” as one SEC lawyer who was reluctant to bring charges against individual executives explained to Eisinger. It is often more convenient for prosecutors to give government a PR victory by slapping corporations with a fine (ultimately paid for by shareholders) and making them promise to behave better in the future. But individuals, not corporations, must be held accountable for undermining the common good. That is where the shame is. And shame is what is in short supply. —

Maintaining limits is a way of asserting community,” sociologist James Q. Wilson has written. “If the limits are asserted weakly, uncertainly, or apologetically, their effects must certainly be weaker than if they are asserted boldly, confidently, and persuasively.”

America still bestows lots of honors and wields heaps of shame, but they’re too often disconnected from the moral basis of society. If we’re serious about reestablishing the moral foundation of our life together, we must change how and whom we honor or shame, and reconnect these practices to the good we hold in common. And what we do in our own society should be a guide for what we do in the world.

In 2016, one out of every four Americans believed the sun rotates around the earth; a third did not believe in evolution; a third did not accept the reality of global warming, and even among those who did, many did not believe humans are at least partly responsible. Without a shared truth, democratic deliberation is impossible.

FINALLY, AND NOT LEAST, restoring the common good requires a new commitment to civic education—as part of the formal education of children and young people, as well as the ongoing education of us all. Our children need to understand themselves not just as individuals seeking self-expression and lucrative careers but also as citizens responsible for upholding our core common values. They need to learn to respect but also reform the major institutions of our society. They should be equipped to deliberate with others over what is best for our society and the world, and to civilly and respectfully disagree.

Yet if education is simply a private investment yielding private returns, there is no reason why anyone other than the “investor” should pay for it. No wonder increasing numbers of parents resist paying for the education of other children, especially those who are poorer or require extra teacher time and resources. The same attitude extends to legislatures that have been cutting funding for public universities. If a university degree is a private investment offering a good return to the individual, they argue, why should taxpayers bear the cost? It would seem more appropriate for students and their parents to take out loans to cover it, just as people borrow for all sorts of other worthwhile investments, such as a new home or business.

theologian Reinhold Niebuhr once said, “Nothing that is worth doing can be achieved in our lifetime; therefore we must be saved by hope. Nothing which is true or beautiful or good makes complete sense in any immediate context of history.”