C2| Saturday/Sunday, September 7 - 8, 2019 ** THE WALL STREET JOURNAL.**
FROM TOP: UNDERWOOD ARCHIVES/UIG/EVERETT COLLECTION; JEFF KOWALSKY/BLOOMBERG NEWSTop: Workers
in the
cafeteria
of the GM
Assembly
Plant in
Fremont,
Calif., 1961.Above:
Workers
from GM’s
plant in
Lordstown,
Ohio, which
closed this
year, protest
in Detroit
in July.We Need
The Shock
Of Dave
Chappelle’s
Comedy
He uses
his
stand-up
routine
to mock
the
pieties
that
define
our
popular
culture.EDITOR AT
LARGEGERARD
BAKERREVIEW
A Safety Net Undone
By the Rise of Finance
from an executive at General Motors—at that point, the ne plus ultra
of corporations. How would he like to come to Detroit for a couple
of years and find out how GM actually worked? Drucker eagerly ac-
cepted the offer, and in 1946, he published a book about what he had
found, called “Concept of the Corporation.” There he reprised his
theory in much more florid terms. “The large industrial unit has be-
come our representative social actuality,” he declared, “and its social
organization, the large corporation in this country, is our representa-
tive social institution.”
During his research, Drucker became friendly with GM’s president,
Charles E. Wilson. (He’s the man remembered for saying, “For years
I thought what was good for our country was good for General Mo-
tors, and vice versa.”) The two of them, according to Drucker, had
conversations about GM’s social role that helped nudge Wilson to-
ward negotiating, in 1950, the
Treaty of Detroit, a five-year
contract with the United Auto
Workers that established annual
raises, company-provided health
insurance and pensions, and a
measure of job security for
workers as norms of American
corporate life.
It was during this period that
President Harry Truman was
failing to achieve most of his
Fair Deal, a proposed ramping
up of the welfare state that in-
cluded a prototype version of
what liberal politicians would
now call “Medicare for all.” That
failure left government playing
a role inconsistent with Karl Po-
lanyi’s ideas and the corpora-
tion playing a role consistent
with Drucker’s. Corporate employment was an American exceptional-
ist version of the welfare state.
It is stating the obvious to point out that this system no longer ex-
ists. One often hears calls for big corporations to be socially responsi-
ble—last month, the Business Roundtable added its voice in a state-
ment signed by 181 corporate chief executives—but not for them to
serve collectively as the major American social (rather than economic)
institution. For a quarter-century or so during the mid-20th century,
however, this was lived reality for millions of Americans who dutifully
served the corporations where they worked until they retired at 65 on
generous defined-benefit pensions, suppressing whatever independent
or entrepreneurial impulses they may have had in exchange for the
company’s loyalty to them. And a coterie of establishment-oriented lib-
eral intellectuals trumpeted the arrangement as a not-half-bad social
and political order, since a Western European welfare state seemed un-
achievable in the U.S.
So what happened? Besides being vulnerable because it was a prod-
uct more of custom than of law, the corporation-based welfare state,
in retrospect, had two major weaknesses. It mainly excluded large
groups with rising aspirations, like racial and ethnic minorities and
women, so they felt little stake in preserving the system. Even more
consequentially, it depended on the corporation’s economic invulnera-
bility and the quiescence of its shareholders.
Back in the dawning days of the New Deal, when the economic role
of government was dramatically enhanced, Adolf Berle, one of Presi-
dent Franklin Roosevelt’s Brain Trusters, published a book arguing that
the modern corporation represented a historically unprecedented situa-
tion: the separation of ownership from control. That was because, in
his view, stocks and bonds were so widely dispersed among small hold-
ers that corporate management could do whatever it wanted. Whether
or not this was accurate, Roosevelt, Berle and others were able to use
the idea of the all-powerful, unaccountable corporation as justification
to create laws and regulations that imposed many new obligations on
the major institutions of the private economy—everything from Social
Security and modern labor laws to the Securities and Exchange Com-
mission and the Federal Deposit Insurance Corporation.
Until his death in 1971, Berle was proclaiming the success of the new,
corporation-based social order, which depended not just on govern-
ment’s forceful role but also on the continued disempowerment of
shareholders, and of Wall Street generally. Peter Drucker said similar
things in those days. So did Berle’s friend and protégé, and the coun-
try’s best-known liberal economist, John Kenneth Galbraith.
But the connection betweenownership and control was soon re-
established, with enormous effects, economic and otherwise. The key
figure in this shift is Michael C. Jensen, a now-retired Harvard Busi-
Continued from the prior page
ness School professor who in
1976 co-wrote an essay called
“Theory of the Firm.” One of the
most cited academic publica-
tions of all time, it is an attack
on the corporation for failing to
fulfill its obligations—not to so-
ciety but to its shareholders.
Jensen and his co-author, Wil-
liam Meckling, proposed a series
of measures to correct then-pre-
vailing ideas about corporate
governance. They argued that
the owners of stocks and bonds
should push corporate manage-
ment to attend very closely to
the price of their company’s
shares and less closely, if at all,
to the needs of society.
This became the theoretical accompaniment to a
great remaking of the relationship between corpora-
tions and finance, which put finance in a much more
empowered position. Jensen regularly wrote and
testified in Congress in favor of new mechanisms
like leveraged buyouts, large grants of stock options
to chief executives and sweeping mergers and acqui-
sitions, all of which he believed would empower
shareholders. (He has since renounced some of these
views.) Larger developments—like the growth of in-
stitutional investing, the dismantling of the New
Deal’s restrictions on corporations and financial in-
stitutions, and the exposure of American business to
fierce new global competition—were
also strong winds pushing the new
economic arrangements forward.
It’s always tempting to think about
the way things turned out as having
been inevitable—as the only possible
response to vast, irresistible forces—
but history is always contingent.
While the postwar global hegemony
of the American corporation was end-
ing, most obviously because of com-
petition from our vanquished former
enemies, Japan and Germany, those
countries were developing political
economies that combined competi-
tiveness with far more economic
cushioning than the late-20th-century American sys-
tem provided. Both Japan and Germany, and many
other countries in the world, provided much greater
job security to employees of big companies, a much
less disruptive market for corporate control and a
significantly higher level of protection for corporate
managers from the momentary impulses of the fi-
nancial markets.
These were explicit features of their political sys-
tems, in a way they no longer were in the U.S. Our
new system was perhaps the most libertarian in the
world, built around the goal of being able to change
existing economic arrangements very rapidly.
But there was a problem. The shareholder revolu-
tion and the rise of finance made the kind of social
vision that Berle, Drucker and others were promot-ing for post-World War II America
impossible to sustain. People who
were fortunate and adept enough to
readjust their lives in response to the
remaking of the political economy
prospered. At Harvard Business
School, where all incoming students
were once required to read Alfred P.
Sloan’s “My Years With General Mo-
tors,” interest quickly shifted to
courses like Michael Jensen’s on the
market for corporate control and to
careers in finance and consulting
rather than corporate management.
For many more Americans, how-
ever, a few generations’ worth of cer-
tainty—expectations about job secu-
rity, intergenerational progress, the
stability of institutions and communi-
ties—abruptly and mysteriously van-
ished. Some people and some places
seemed to be doing very well indeed,
but many others were falling behind.
There was no more payoff, evidently, to being an ex-
emplar of that venerable type, the Organization
Man. Now the payoff was for the Transaction Man
or Woman, someone who took established economic
institutions apart and reassembled them in a more
strictly market-oriented form. But the world had
room for only a limited number of those.
Just as political systems a century ago had to ad-
just in response to the social dislocations produced
byindustrialcapitalism, today they are adjusting to
the social consequences of the financial revolution
of the late 20th century. Back in the 1960s, the his-
torian Richard Hofstadter published an essay called
“What Happened to the Antitrust Movement?” argu-
ing that what had been an all-consuming issue in
American politics, the central concern of mass
movements and of presidential campaigns, was now
of interest only to experts, not the public.
Today antitrust is back on center stage, with
the big technology companies playing the former
role of the railroads, Standard Oil and the “money
trust.” At least two of the top-tier Democratic
presidential candidates, Elizabeth Warren and Ber-
nie Sanders, have rooted their campaigns in a cri-
tique of the new economy. Donald Trump and Bo-
ris Johnson have become unlikely heads of state
partly by departing from the elite consensus on
trade. Socialism and right-wing nationalism are
popping up all over the world, both motivated by
economic insecurity and discontent.
What’s noteworthy about the new political dis-
pensation is not just its anti-elite emotional charge
but also its focus on direct govern-
ment involvement in the economic af-
fairs of institutions. Even economi-
cally oriented liberals have been
trained for years to regard policies
like managed trade, state-mandated
setting of wages and prices, and
breaking up big companies as fool-
hardy, especially when much more ef-
fective tools for managing the econ-
omy, like setting the overall rates of
taxes, interest and government spend-
ing, were available. The new economic
politics defies this old consensus and
includes a range of proposed interven-
tions to counter insecurity and in-
equality directly: higher minimum wages, tariffs,
price controls (on, for example, college tuition), an-
titrust, enhanced government benefits.
It isn’t at all clear where the new economic poli-
tics will lead—or whether it will wind up as a cause
of the left or the right. We are on unfamiliar terrain,
with each major party accusing the other of being
the pawn of economic elites and big business.
What’s indisputable is that the certainties of the late
20th century about how ordinary people’s lives were
supposed to be organized economically have disap-
peared. No less than when Peter Drucker and his
colleagues were writing their midcentury manifes-
tos, a great reordering of political and economic ar-
rangements is at hand. It is only beginning. It will be
contentious and consequential.For many
Americans,
a few
generations’
worth
of certainty
abruptly
vanished.DAVE CHAPPELLE has become
something of an unlikely hero
to conservative critics of our
tightly constrained and vigi-
lantly policed popular discourse.
His willingness to use his
stand-up comedy routine to
make fun of some of the con-
temporary shibboleths of liberal
orthodoxy—gay and transgen-
der rights, the women’s move-
ment and others—has earned
him predictable opprobrium
from much of the cultural elite.
When he appeared on “Saturday
Night Live” right after the 2016
election and punctured the fu-
nereal mood of the proceedings
by urging the mourning view-
ers—and cast members—to give
Donald Trump “a chance,” it
wasasifhewereinacontest
with Kanye West to audition for
the part of most malevolent
traitor to the black community.
His latest Netflix one-time
stand-up show, “Sticks and
Stones,” recorded earlier thisyear before an audience in At-
lanta, has been greeted with the
usual outcry. But given his repu-
tation as a renegade scourge of
political correctness, I was a lit-
tle surprised and even offended
as I watched the show this week.
It wasn’t the endless repeti-
tion of the F-word or the N-
word, which has become a kind
of mandatory verbal tic for
black performers. Nor was it
the defense of Michael Jackson
against his accusers, which
seemed odd and even a little
contrived—as though a pro-
ducer had urged him to come
up with something really outra-
geous for the pre-broadcast
publicity. I was also unmoved
by his denunciations of “cancel
culture”—whereby the career of
a phenomenally successful en-
tertainer is derailed by the rev-
elation of some improper re-
marks or behavior from years
earlier, which looks a little self-
serving. I’m sure there have
been some injustices, but I have
little space in my limited capac-
ity for human sympathy to
weep for the likes of Louis C.K.
What surprised me was that
much of his material consisted
of cutting, vicious—and yes,
funny—jokes about how terrible
white people are. He makes fun
of the opioid epidemic devastat-
ing so many rural and small-
town white communities, echo-
ing the familiar refrain on thepelle is defined by the material
that gets the politically correct
crowd riled up—and there’s
plenty of that in the show. He
makes jokes about LGBTQ—the
people who’ve taken over “20%
of the letters of the alphabet.”
He makes fun especially of
transgender people, including a
slightly crass comparison of the
identity confusion some trans-
gender people feel with the sug-
gestion that he thinks he may
really be a Chinese man.
He makes a piercing moral-
equivalence joke about abor-
tion, saying he’s fine with a
woman’s choice to get rid of a
pregnancy, but in exchange men
should be allowed to walk away
from responsibility for a child if
the woman goes ahead with the
pregnancy to completion.In short, Mr. Chappelle is not
some crusading right-wing,
countercultural figure, tearing
down the liberal establishment.
He’s an equal-opportunity of-
fender. His routine takes swipes
at everyone—the hypocrisies,
inconsistencies, absurdities and
extremism in our culture.
He is, in that sense, a true
comic—one of extraordinary tal-
ent and sophistication. Maybe
I’m offended by jokes about opi-
oid abuse killing white people.
But I can laugh at them and ac-
knowledge that, yes, he has a
right to make them. Comedy is
vital to the ability of a society to
examine and challenge itself.
The Chappelle flap is further
evidence of how boringly pre-
dictable so much of our modern
popular culture has become. He
shocks because he is the rare
voice willing to question the
vice-like grip of the liberal es-
tablishment on the vocabulary
and syntax of popular discus-
sion. But popular culture was
once defined by its willingness
to challenge. Artists, musicians,
comedians and writers enriched
us by delivering shocking af-
fronts to the sensibilities of the
people who laid down the rules
of our society.
Today’s performers mostly
fall over each other to demon-
strate new establishment bona
fides. They may call themselves
woke. They’re barely breathing. MATHIEU BITTON/SHUTTERSTOCKleft that white people are get-
ting a taste of the crack epi-
demic among mostly blacks in
the 1980s. “Just say no,” he of-
fers. “Now how easy is that?”
He also makes jokes about
the threat posed by young white
male school shooters. Perhaps
the funniest line of the whole
show comes when he urges
black men to go out and buy
guns. “Every able-bodied Afri-
can-American man must register
for a legal firearm. That’s the
only way they will change the
law.” It’s a near-perfect comic
line—funny and yet carrying the
faintest hint of credibility.
But these jokes and others in
a similar vein fall neatly within
the canon of approved liberal
orthodoxy, so they’re not con-
troversial. Instead, Mr. Chap-Dave Chappelle
in performance
in New York,
July 9.