WHAT’S FAIRNESS GOT TO DO WITH IT?

Another Moral Economy Column
By Christopher Lind
May 7, 2009

The French working class really has style. You have to hand them that. When 20 angry workers at the 3M plant in Pithiviers, south of Paris, told Director Luc Rousselet he couldn’t leave until he improved the severance packages for 110 laid off workers, they fed him mussels and fries for dinner. What a way to get noticed.

It sure beats the leaden style of the European ruling class. The French energy giant Total, announced the biggest annual profit in French corporate history and less than a month later announced the elimination of 550 jobs. French President Nicolas Sarkozy provided 12 billion Euros to the automotive sector and the German tire maker Continental, responded by eliminating 1210 jobs in Clairoix, north of Paris. No moules et frites for this CEO, they threw eggs at him. In the ultimate French insult, the eggs weren’t even cooked!

Scottish pensioners took a more pedestrian route when they picketed the home of former Royal Bank of Scotland CEO Sir Fred Goodwin. How could he have been rewarded by having his pension doubled to over Cdn $1 million when he led the bank into bankruptcy and their savings into ruin? In Connecticut, activists organized a bus tour to homes of AIG executives who received $220 million in retention payments after the US federal government invested $182.5 billion to prevent total collapse.

Canadians are so much more restrained. Where were the pensioners of the Toronto Star when CEO Rob Pritchard resigned after 8 years on the job and received an $11 million cushion for his fall? Does it make a difference that the Toronto Star is not bankrupt yet? They only lost $180 million last year, the stock price fell 70% and they laid off 500 people.

On what basis would we say that people are justified in their outrage? Pritchard’s settlement was approved by the board. The German tire company broke no laws when it laid off 1210 workers.

The common complaint is that these payments are not fair. Why should the bosses get a fat severance check while the workers lose their pensions and get a pink slip? What’s fairness got to do with it, you ask?

Well, contrary to certain ideological claims that economics is a value-free science, all economies are embedded in a set of moral assumptions about how our common life should be organized. When we limit the discipline of economics to matters of scientific technique, we render the moral foundation of our economy invisible.

Communities can tolerate a lot of variation in economic practice but when the variations become both extreme and common, then people react. In times of crisis, ordinary people rise up and insist on a renewal of the moral foundations of our economic life. They insist on fairness rather than bias. They insist on subsistence for all rather than affluence for a few. They insist on compassion for the vulnerable rather than indifference from the elite.

These are the characteristics of a moral economy and they become visible in times of crisis – just like these.

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