Private Sector Civics
We teach students the basics of government. Why not the basics of the market?
This summer, I've been working part-time at a Home Depot in a small city plotted in the vast prairie wastes of rural Oklahoma. I've been working this job for over a year, and I enjoy the work. Even if it sometimes requires that I wake up ungodly early in the morning, it's flexible, satisfying, and it pays damn well: $16 an hour at an entry-level retail position. The one thing that I lament about my job is the always-on in-store radio, so one can imagine my jubilation when, last month, I walked into the store at 4:57 AM a few weeks ago and heard nothing. The radio had gone dead silent. Something went bust in the store's intercom, and the whole system went down. After working for a few days in zen-like silence, I began listening to podcasts as I worked, and wishing to avoid listening to the contentious discussions of political podcasts in a public setting, I eventually opted to listen to podcasts about corporate governance. As a public administration major by passion rather than by ambition, corporate governance is one of those fields that has piqued my interest for some years, but these past few weeks have given me a renewed perspective on corporate governance and its essential importance in our society.
Prior to the recent mercy of the Home Depot radio, I had only taken a passing interest in the dynamics of business administration. I had watched the occasional YouTube video about the decline of this corporation or the other, and I had watched through Modern MBA's channel catalog, but I hadn't gone into the weeds. I hadn't thought about a given company for more than twenty minutes. It was only when I discovered the brilliant business podcast Acquired that I became even a candle's bit enlightened to the vast importance of corporate governance and became convinced of the need to spread this knowledge.
Through episodes of this podcast, I learned about the ruthlessness of wolves like Bernard Arnault, who broke friendships and divided families in his conquest of Europe’s historic luxury fashion brands. I learned about the Visa federation and how a defiant college drop-out managed to convince American Express to dissolve their vast credit card empire in favor of a global network, bound by words inscribed on a pair of golden cufflinks: Studium Ad Prosperadum, Voluntas In Conveniendum.1 I learned about House of Hermés and how the descendants of a lowly saddle maker could become the royals they once served through an unwavering commitment to quality, art, and craft. I learned about how Sol Price's upbringing in a left-wing radical neighborhood in the Bronx would later inspire him as he laid the groundwork for the retail juggernaut Costco. I learned about the cutting edge and the gambles that ambitious founders make to become the last men standing in industries worth trillions.
While I've listened to episode after episode of stories about money, power, and ideology, my co-workers, merchandisers with high school diplomas from rural Oklahoma, have not tuned out my racket, but laughed, gasped, and asked questions about what they had missed. One man, after a few minutes of listening to the episode on LVMH, started talking about how the French billionaire Bernard Arnault seemed like a model in moral complexity, a perfect inspiration for a D&D character that he was creating. While I listened to these stories, I was learning about pharmaceutical regulations that ensure new medicines are safe for the general public, the rationale and consequences of stock buybacks, and the reason why we can take out microloans to pay for our Big Macs. I was learning about how our world’s largest, most entrenched companies govern our world and why.
All along, in listening, thinking, and talking about corporate governance, I couldn't help but wonder why I hadn't learned any of this before. This was not historical revisionism, but a whole dimension of the history of our civilization that I had scarcely considered and that I had scarcely been taught to consider. According to the Oklahoma State Department of Education, one is required to spend at least one semester in high school learning about federal government. While I have severe doubts that a mere semester's worth of education on government is sufficient given the complexity and importance of our constitutional order, this is also my bias as a political science student who has dedicated a portion of his life to the study of that order. Regardless, a course in federal government presents an exceedingly narrow view of what governance in America is.
According to the US Department of Commerce, government is the third largest industry in the United States behind professional services and finance. While nearly 47% of Americans particpated in our important 2022 midterm elections, 63% of Americans own stock in a corporation, whether via a mutual fund, a retirement account, or individual ownership. Accessible stock trading applications tailored for individual trading, including Robinhood and E-Trade, have made it easier than ever for more Americans to become voting shareholders in a corporation, voicing their opinion on all manner of issues from executive compensation to green energy initiatives for the world's largest corporations. Long before I cast my first public ballot last year, I had been voting in board elections for a bank in which my grandparents gifted me a small, dividend-paying share as a child.
In this regard, I am lucky to have been exposed to stock ownership from such a young age. As a people that has constructed our entire civilization on institutions built by private enterprise, the general public’s understanding of how those enterprises basically work is astonishingly low. We all know people who have fallen victim to their ignorance of this field. Few among us have not been exposed to aunties selling vitamins and supplements from the bottom of a pyramid scheme or heard stories of young men gambling their savings away on terrible investment advice, whether on cryptocurrency or WallStreetBets fads.
Just last summer, a co-worker asked me what the most commonly bought item is. She was disappointed when I responded petroleum, and she went on to explain that she planned on creating a drop-shipping business on the advice of someone that she had met at a bar the other evening. It fell on me to explain that drop-shipping is a scam business in a majority of cases and that, if she was planning on setting aside money to create such an enterprise, she might be far better served opening a high interest savings account or investing with her bank. For someone who isn’t naturally interested in the function of American capitalism, the arguments of hucksters and scammers sound compelling. A lay-person has no reasonable response to nonsense arguments that Amazon engages in a form of drop-shipping or that Herbalife is organized like Disney. A layperson knows little, if anything, about economies of scale, the structure of corporate boards, or where Jeff Bezos keeps his money. Without a knowledge of how legitimate businesses operate, there is nothing to protect consumers from illegitimate ones.
This subject goes beyond the scope of civics, and it goes beyond the scope of personal financial literacy. A basic understanding of corporate governance is empowering for anyone who exists in a capitalist system, whether as a blue-collar worker who is subject to corporate hierarchies, a shareholder who makes decisions about which companies deserve investment, or an entrepreneur who seeks to build their own duchy. There is no reason why a subject so essential should remain so obscure.
If we are committed to teaching our students how they engage as citizens in a liberal society, we must teach high school students the whole story of how power is exercised in this country. We should not limit our students' knowledge of our society to the mere 11% that the government controls. I propose that our state should be the first in the country to require that schools offer a semester-long course on corporate governance. If we as a society desire educated citizens who know the value of enterprise, competition, and failure, who are not tempted by popular hyperbole surrounding corporate greed, and who understand the value of their checks, we should undertake to expand education on business administration from the stone pillars of academia, Wall Street, and Silicon Valley to the tile floors of our public schools.
Latin for “The will to succeed, the grace to compromise”