Marjorie Kelly’s The Divine Right of Capital is one of those mind-bending books that deserves to be read by a large audience. It tells a behind-the-scenes story of capitalism that we don’t often hear; one that shows how our preoccupation with shareholder “primacy” distorts capitalism in ways that generate serious harm for society and the planet. Kelly shows how our current problems with capitalism are not necessarily intrinsic to market forces or even capitalism itself, but to the particular version of it that we have today.
In this brave book, Kelly highlights the historical roots of our current system and its ties to feudalism, and then lays out a set of prescriptions for rethinking how corporations actually could work.
To help me digest this important book, I summarized each chapter, and in the hope of encouraging readers of this blog to read the book yourselves, I’m sharing these chapter-by-chapter overviews here on my blog – with the permission of the author.
Below are the 12 principles Kelly outlines in the book, with links to detailed summaries of each chapter:
The Principle of Worldview: In the worldview of corporate financial statements, the aim is to pay stockholders as much as possible, and employees as little as possible.
The Principle of Privilege: Stockholders claim wealth they do little to create, much as nobles claimed privilege they did not earn.
The Principle of Property: Like a feudal estate, a corporation is considered a piece of property — not a human community — so it can be owned and sold by the propertied class.
The Principle of Governance: Corporations function with an aristocratic governance structure, where members of the propertied class alone may vote.
The Principle of Liberty: Corporate capitalism embraces a predemocratic concept of liberty reserved for property holders, which thrives by restricting the liberty of employees and the community.
The Principle of Sovereignty: Corporations assert that they are private and the free market will self-regulate, much as feudal barons asserted a sovereignty independent of the Crown.
The Principle of Enlightenment: Because all persons are created equal, the economic rights of employees and the community are equal to those of capital owners.
The Principle of Equality: Under market principles, wealth does not legitimately belong only to stockholders. Corporate wealth belongs to those who create it, and community wealth belongs to all.
The Principle of the Public Good: As semipublic governments, public corporations are more than pieces of property or private contracts. They have a responsibility to the public good.
The Principle of Democracy: The corporation is a human community, and like the larger community of which it is a part, it is best governed democratically.
The Principle of Justice: In keeping with equal treatment of persons before the law, the wealthy may not claim greater rights than others, and corporations may not claim the rights of persons.
The Principle of (r)Evolution: As it is the right of the people to alter or abolish government, it is the right of the people to alter or abolish corporations that now govern the world.