In response to my post The Right's Attack on Public Pension Funds, University of Minnesota law professor Brett McDonnell (guest blogging at Conglomerate) writes:
I am also interested in a more edgy response that most American corporate law scholars would probably shy away from. As I mentioned in my first post, I am interested in criteria such as redistribution and holding those in power accountable. This suggests something of a civic republican justification for shareholder capitalism: widespread ownership as a way of democratizing ownership of the means of production and of equalizing power within society. More than pure economic interests are at stake in the control of corporations.
Thus, when Phil Angelides or the AFSCME go after powerful, over-paid CEOs, part of their explicit point is a populist attack on privilege. That's cool with me, and I suspect it's cool with a lot of their constituents as well. Of course, taken to the point where it threatens their retirement security, there's a problem. But I think it's rarely if ever taken to that point. Is the loss of a fraction of a percentage point of return tolerable as a cost to holding accountable some of the most influential people and institutions in our society?
The problem I have with Brett's argument is that I don't want Angelides using my money to advance a left-liberal poltical agenda. Unless Brett convinces me that all CalPERS and CalSTRS beneficiaries are left-liberal Democrats, why should Angelides be allowed to use their money to advance his personal political policies and career? Indeed, even if all those beneficiaries are commie pinkos (like Brett?, heh), they still might complain that the CalPERS and CalSTRS boards are largely unaccountable to the beneficiaries. Plan participants get to elect only one-quarter of the board, the rest being hacks appointed by various politicos. As such, my point was not only that CalPERS and CalSTRS have different interests than shareholders at large, my point also was that the people who run those funds have conflicts of interest vis-a-vis their beneficiaries.
It strikes me as odd that Brett would want to achieve corporate accountability via unaccountable hacks. Especially since a lot of those hacks are planning on running for governor and thus are also among what Brett calls "the most influential people ... in our society"?
