Tag Archives: social compact

The CEO Story, from Profitability Crisis to Polycrisis

Michael Roberts’ historical chart of the G20 rate of profit.

I’ve written a little about the the invention of the CEO — the title, the office, and the social position described by that term. This chart from Michael Roberts’ blog showing the declining rate of profit can help reframe that discussion.

In this view, the term “CEO” first comes into use in the midst of the profitability crisis, in the late 60s and 70s, after the postwar Golden Age. The CEO’s heyday runs through the neoliberal recovery. The Fall of the Celebrity CEO (to borrow a term from Edelman) coincides with the start of the Long Depression.

Unfortunately, Roberts’ chart doesn’t run up to the present, which would show the rate of profitability continuing its decline in the face of multiple, entangled, global crises all at once, a polycrisis:

A global polycrisis occurs when crises in multiple global systems become causally entangled in ways that significantly degrade humanity’s prospects. These interacting crises produce harms greater than the sum of those the crises would produce in isolation, were their host systems not so deeply interconnected.

Having helped steer society to this precarious juncture, has the institution of the CEO now run its course? And what would it take to reinvent it, so that the business enterprise can help address the overlapping crises we face, improve humanity’s prospects, and play a constructive role in a new social contract? 

The Last Ask — A Look Back At Obama’s Parting Request, One Year Ago Today

It came as no surprise that an outgoing president would make the obligatory noises about “the peaceful transfer of power from one freely elected president to the next,” as President Obama did in his final speech, delivered in Chicago one year ago today. It was a theme used to quell fears and stifle protest, to give Trump “a chance to govern,” as both President Obama and Vice President Biden put it after the election, and it was offered as the reason former presidents and other politicians would overcome their appreciable dismay at the election’s outcome and attend the inauguration ceremony on the 20th.

Remember? You could not turn on a television, open a newspaper, or click on a mainstream news site in mid-January of 2017 without being told that on inauguration day we were going to witness power’s peaceful transfer. Very few people making these presentations went much further, at least publicly, to distinguish succession from transition, or talk in a serious way about power, how it is peacefully transferred, or to raise the questions of legitimacy and political authority that attend the transfer of power.

Those questions were, however, hanging in the air, like the dark clouds that would gather over the Mall on inauguration day, and over the past year, with the Mueller investigation and the current president’s daily demonstrations of unfitness for office, they have only grown more urgent and important. Considerations of power that were once the preserve of political theorists are now millions of people’s daily, top-of-mind concerns — as they should have been all along.

Obama’s Chicago speech did little to dispel the doubts and fears people had, and still have, about his successor; and it did not directly address the big question on nearly everyone’s mind that day, and every day since the 2016 election: what is to be done? After the abortive and misguided recount effort in November, the shameful but predictable acquiescence of the electoral college in December, and the first signs of trouble on the Russian front, the hope in early January was that the president would say or do something (what?) to change the course events had taken, or he would make some kind — any kind! — of intervention or call to action.

But this is precisely what Obama did not do. He talked about the forces threatening American democracy (income inequality, racial division, political polarization) which had brought us to this ugly juncture. He celebrated “the power of ordinary Americans” to bring about change, “to get involved, get engaged, and come together to demand it,” and the “power” (the word echoes throughout the speech) “our participation, and the choices we make” give to the Constitution. All this talk about the power of the people might have amounted to a kind of preemptive bid, made before the upcoming official ceremony transferred executive power to the loser of the popular vote. But the president never made that bid explicit, and turned deliberately away from asking people to take action.

In fact, when Obama presented the peaceful transfer of power as a “hallmark of our democracy,” and the remark elicited boos and shouts of “No!” — cries of resistance, threats of upheaval — he quieted them (“no, no, no, no, no”). By the fifth refusal, the crowd had backed down. What else could he have done? What would have happened had he assented, publicly, to that No!? Or if he had simply stepped back from the podium and let the tide of emotion roll over the crowd?

Over the past year I have often thought about how much hung in the balance at that moment, and how with a gentle reprimand the president took the crowd right back into the flow of his speech. He stumbled just a little after all those impromptu “nos,” but recovered balance by using his index finger to guide him through the phrase on the prompter: “the peaceful transfer of power.” Regaining his composure, he kept the crowd in check – and they applauded him. (We cannot imagine his successor doing the same, or even trying; it is much easier to imagine him inciting a riot.) He said he was stepping down to rejoin us as a citizen, but he had not yet let go of the reins. By the end of the speech, when the president issued his final charge or made what he called his “final ask,” the audience was roaring:

My fellow Americans, it has been the honor of my life to serve you. I won’t stop. In fact, I will be right there with you, as a citizen, for all my remaining days.
But for now whether you are young or whether you are young at heart, I do have one final ask of you as your president — the same thing I asked when you took a chance on me eight years ago.
I am asking you to believe. Not in my ability to bring about change — but in yours.
I am asking you to hold fast to that faith written into our founding documents; that idea whispered by slaves and abolitionists; that spirit sung by immigrants and homesteaders and those who marched for justice; that creed reaffirmed by those who planted flags from foreign battlefields to the surface of the moon; a creed at the core of every American whose story is not yet written:
Yes, we can.

The delivery was a little flatter than it had been in previous years. But who could not have been impressed, at the very least, by the rhetorical consistency the president had managed to achieve over the course of two terms in office? History rarely allows anyone — let alone a president — this measure of consistency, and the election in November of 2016 had marked nothing less than a violent historical rupture. This final ask didn’t acknowledge the cataclysm. It returned, instead, to familiar themes, central to Obama’s own biography, and situated the eight years of Obama’s presidency on the arc, or what he called “the long sweep,” of history that bends toward justice. This last ask was also a tell — one last public demonstration of President Obama’s leadership style. It took the form of a soft directive.

One year on, however, it’s difficult to say where this parting request, and the end of Obama’s presidency, left us. Was this last ask anything more than a feel-good exhortation? The president asked us not to do something, but simply to believe in our ability to do something. That might have been as far as he could go, there on that public platform, with emotions still raw from the election; and of course there’s a decent argument to be made that taking ourselves seriously as historical actors, people with the “ability” to bring about change, might be essential to disposing us to do anything at all.

At the same time, “Yes, we can” does not necessarily mean we will, or we ought, or even that we are doing what we can. There is a good distance to travel from believing in oneself as a person capable of doing to the doing itself. Setting intentions, planning projects, coordinating with others, anticipating consequences — all that still only takes us to the edge of action, as the Community Organizer in Chief must know. The great risk of political action comes when we apply power, when we move from can to will. Asking people to believe they can act, but not asking them to do anything in particular, might keep them temporarily from incurring that risk and rushing into the breach, but it also makes action seem like a distant possibility, not an urgent necessity.

We should hardly have expected the president to call for resistance, even if he shared the sense that something — but what, exactly? — had to be done. What he promised instead was redemption. The two could not be less different. If redemption assures us that We Shall Overcome, Someday, resistance plants its feet firmly in the present and declares, We Shall Not Be Moved. Resistance is mounted out of necessity. Strikes, sit downs, shutdowns, blockades, riots, raids — these actions were not always or primarily animated by some great faith in just outcomes, though that faith may have arisen in the course of the fight or helped sustain the fighters. People have made many gains by refusing and resisting power’s encroachments, by saying No, You Cannot long before they were able to believe in Yes, We Can. In many cases, things just become so intolerable, the long train of abuses and usurpations, as the Declaration has it, become so unbearable, that ordinary people feel they must stand their ground and resist.

We are living in that kind of moment. The current political crisis demands more than faith. We have to get to work. We should do so with the understanding that resistance, as the very word suggests, will help us push back against the forces intent on destroying the American democratic order, but it is not the extent or end of our power. It is, rather, the limit of theirs. This distinction matters, even though we are still in the thick of the fray. It invites us to think about near- and long-term commitments, and the nature of our power.

Our power is not at all like the power of command that was transferred — I won’t say peacefully, given all the damage that has already been done  — from one office holder to the other last January. It’s another kind of power. It’s the power we confer upon each other, not through official ceremonies but through the rituals of everyday life; it’s power we hold together, not just as individual rights holders with claims and grievances, but in the first person plural, as a “we.”

We realize and renew our power when we gather or assemble publicly. We may not have the power to issue directives or orders, but as the president reminded us, we can make demands – of those who hold political power (by voting, marching, practicing civil disobedience, and so on) and, just as importantly, of each other. We can deliberate what to do, coordinate efforts, and hold each other mutually accountable. There’s power in all of that – some power, maybe not enough all by itself to get us to the other side of this crisis, but some; and we have not done nearly enough to develop it, test its limits or discover its possibilities. (Instead, we have built and continue to prop up organizations and institutions that require its surrender.) Ultimately, it’s the power we need to govern ourselves responsibly and vigilantly, after we have put an end to current abuses and usurpations.

What should we do? This wasn’t the question for the outgoing president to put to us, but one for us to put to ourselves, and in this form: in the first person plural, and with that modal verb should (or ought) to highlight obligations and responsibilities, or right action. There’s not one answer to this question, or an end to its deliberation; nor will there be one solution to the crisis, such as the Mueller investigation, a medical diagnosis, the emoluments clause, the 25th Amendment. None of those things alone will do it, because “it” goes (way) beyond removing an abusive and corrupt authoritarian and his cronies from power. “ It” is up to us, because ultimately it comes down to reclaiming and realizing self-governance.

Every refusal, however small, to yield to authoritarian attention-stealing, rule-breaking and administrative sabotage will help safeguard our authority to govern ourselves, just as every act of decency and respect, no matter how small, will count as a victory against the moral coarsening we have undergone over the past year. Obama himself made this last point a couple of weeks ago in an end-of-year, schmaltzy Twitter thread of “stories that remind us what’s best about America” and demonstrate that “each of us can make a difference, and all of us ought to try.” Yes, we ought.

The CEO and the Social Compact: Conibear Comes to Michigan

I’ve been puzzling over the few public comments Lundin Mining CEO Paul Conibear has made regarding the announcement that his company plans to acquire the Kennecott Eagle Mine from Rio Tinto. Industry analysts studying these same tea leaves at the end of last week seem to have judged the Eagle sale to be auspicious. But I am looking for other signs — evidence of Lundin’s disposition toward the communities around the Eagle Mine and some indication of how Lundin plans to approach and address the social and environmental challenges of the Eagle Mine project.

There are suggestions in Conibear’s resume of some interest in local and global development issues and an appreciation for the environmental and social facets of large scale mining projects. An engineer by training, Conibear made his way as an operations man, parlaying his experience in Latin America, Europe and, above all, at the Tenke Fungurume mine in the African Congo into a leadership position — first at Tenke Mining, where he served as CEO before its merger with Lundin, and then, when Phil Wright resigned in 2011, as CEO of Lundin Mining. During his time in Africa, according to his official corporate biography, Conibear was “active in advancing the group’s corporate social responsibility initiatives”; and he “is one of founding directors of the Lundin for Africa Foundation, a charitable entity established to support sustainable development across Africa”. Here, then, is a CEO with CSR credentials.

It’s too early to tell whether this will matter when it comes to Lundin’s work in the UP. Reports that the company will uphold Rio Tinto’s commitments to the communities around Eagle Mine — and keep the current Kennecott team in place — are still short on specifics. That will probably be the case at least until the transfer of the mining permit is complete and Lundin has had a chance to figure out firsthand what’s working at Eagle and what isn’t. Conibear’s affiliation with Lundin for Africa, and that organization’s focus on social enterprise, may not translate to efforts on the ground in Michigan, for all sorts of reasons; he himself has said nothing so far about how the company will continue, depart from, or improve upon what Rio Tinto has already done. In a press release Lundin issued last week, the CEO is quoted as saying only that the acquisition of the mine in Michigan’s Upper Peninsula

fits ideally within Lundin Mining’s asset base and is the result of the disciplined approach we have been focused on for some time to acquire high quality, advanced stage assets in low risk, mining oriented jurisdictions. The Eagle Mine represents a very unique opportunity to acquire a high-grade project which is under construction and expected to begin generating significant levels of metal production and cash flow prior to the end of next year. Northern Michigan has an outstanding iron ore, gold and base metals mining history and consequently excellent regional power, road and rail infrastructure, with extensive mining expertise within local communities to support and staff Eagle Mine.

I was struck by a couple of things here, but most of all by the invocation of northern Michigan “history” in the last sentence. What makes the history of the Upper Peninsula so “outstanding,” in Conibear’s view? Nothing like what drew Richard White to his classic study of the French and the Algonquins in the pays d’en haut. Not the brutal strikes and hard times Arthur Thurner wrote about in Rebels on the Range; not the complex system of social patronage that obtained between immigrant hard-rock miners and the tight-fisted, iron-willed mining captains, described by historians like Larry Lankton. Not even the attitudes toward history that impressed me most in the interviews I did in connection with 1913 Massacre — the deep and heartfelt emotion many people in the area invest in the past, and the pride they feel in what their ancestors accomplished and endured; the way that shared stories have both concealed past trauma and allowed the region to heal; a resilience that has allowed communities on the Keweenaw to weather boom and bust.

It may not seem reasonable to expect much feeling for the history of the UP in Conibear’s remarks. He’s got a mining company to run and investors and analysts to impress. But it’s worth noting that a more considered view of UP history (and a look at the environmental damage caused by the last round of mining) would not necessarily lead one to characterize a mining venture in the Upper Peninsula as “low risk.” For Conibear, UP history seems to matter to the extent it can be exploited for business advantage. The past has value in the present as a source of “infrastructure” — a reliable power grid, rail and roads — and “expertise.” Widen the lens a bit, however, and that same history becomes a source of uncertainty and obligation as well as strength.

Take roads, for instance. It’s odd that Conibear would single out roads as one of the things that attracted Lundin to northern Michigan and the Eagle Mine. A proposed $80 million project to build a haul road from the Eagle Mine to the Humboldt Mill ended in failure earlier this year, after the Michigan Department of Environmental Quality denied the permit for County Road 595. It was a big setback for Rio Tinto, which had fought for the road for five years. Defeated, the company announced that it would spend $44 million to upgrade existing roads instead, but that plan remains controversial — and now that project and the cost as well as the controversy it entails are Lundin’s to manage.

There’s another, more general observation to be made here as well. History doesn’t just throw all those things — power, roads, expertise — into the Rio Tinto deal. If history, or the experience of the past 150 years of mining, works in favor of companies operating in the UP today, it also marks a good place to start enumerating the responsibilities mining companies have to society. This is a point about the relationship of business to society that Elizabeth Warren made in the run up to last year’s presidential election, and which snowballed into a ridiculous controversy over Obama’s “You Didn’t Build That” remark. It’s worth recalling Warren’s argument in this context. A skilled and educated workforce, reliable infrastructure, the protection of the law, even the free association to do business with whom and where you like, Warren said, are part of an “underlying social contract.” Companies have to honor that contract and “pay it forward” if they hope to continue to benefit from public goods; and society has a responsibility to push hard on companies until they do.

In Michigan, of course, Governor Rick Snyder and his cronies did all they could during last year’s lame duck session to weaken the compact between business and society and to relieve mining companies of the obligation to pay forward anything at all. A bill sponsored by the UP’s outgoing Republican representative Matt Hukki set out to “ease upfront costs for mines” and make the taxes on mineral extraction in Michigan “more simple, fair and efficient,” replacing property tax, corporate income tax, sales tax and use tax with a single “severance tax” of 2.75 percent on the gross value of minerals extracted — once the mine went into production. That works out very nicely for Rio Tinto, which never took Eagle into production; and it would be worth finding out whether the company is now entitled to a tax credit on property taxes paid before the passage of HBs 6007-12. That retroactive credit — the opposite of paying it forward — is one provision of Hukki’s bill.

Tax relief and regulatory easing are no doubt some of the things Conibear had in mind when he described the Upper Peninsula as a “mining-oriented jurisdiction.” It’s a piece of industry jargon that is used to talk about whether conditions are favorable or unfavorable — a way of assessing risk. Among US states, Michigan has never ranked very high in the annual survey of mining jurisdictions by the Fraser Institute [pdf]; but generally, writes Aaron Mintzes, “jurisdictions within the United States rank very well in large measure because we have stable and transparent democratic institutions, courts that enforce contracts and resolve disputes, and generous mining policies (like the 1872 Mining Law)”. This is another unappreciated provision of the social contract: strong public institutions and the rule of law reduce the risks companies take as much as if not more than mine-friendly policies.

You would think that companies, in turn, would be obliged to do everything they can to reduce the risks they pass on to society. That has rarely been the case, and it has not been the case when it comes to the Eagle Mine. Rio Tinto and now Conibear and Lundin are requiring communities around the mine and all around Lake Superior to assume an enormous risk. It goes beyond legitimate fears of environmental damage due to subsidence or acid mine drainage. When Eagle goes into production in 2014, it will signal the start of a new mining boom in the Lake Superior region. Over the next several years, one of the world’s largest mining operations will be staged around one of the world’s largest freshwater lakes. Just look at the map of mines, mineral exploration and mineral leases published by the Great Lakes Indian Fish and Wildlife Commission. It is difficult even to imagine the environmental hazards and the social costs that the mining boom and the inevitable industrialization of Lake Superior will entail. I am still wondering whether Mr. Conibear appreciates that.