Herbert Croly’s One Little Book – Part 1

By May 7th, 2014

Herbert Croly’s One Little Book, The Promise of American Life – Facts of the Day – Increasing Correlation Between CEO Compensation and Corporate Performance – Changes in Corporate Governance Rules

Blog No. 40*

May 6, 2014

*Please Note: At the request of some of my readers and in order to make locating and referencing my prior blogs easier, all blogs post on this site will from now on be both dated and numbered.

by Mack W. Borgen

Author,

The Relevance of Reason– The Hard Facts and Real Data About the State of CurrentAmerica

Book One – Business and Politics(July, 2013) (408 pp)

Awarded First Runner-Up, Best Business Book of the Year- 2014 Los Angeles Book Festival;

Selected As Finalist (Political Science Category) – ForeWord Review’s 2013 National Book Contest

(Winners To Be Announced At American Library Association In Las Vegas, Nevada, June, 2014)

 

The Relevance of Reason– The Hard Facts and Real Data About the State of CurrentAmerica

Book Two – Society and Culture(October, 2013) (438 pp)

Selected As Finalist (Popular Culture Category) – ForeWord Review’s 2013 National Book Contest*

(Winners To Be Announced At American Library Association In Las Vegas, Nevada, June, 2014)

 

Available at Amazon.com, BarnesandNoble.com, SummerlandPublishing.com and some local bookstores.

Bookstores and academic and public libraries can obtain copies through Ingram, Baker & Taylor, Quality Books, or Follett

HERBERT CROLY’S ONE LITTLE BOOK

 Part 1.

 (Author’s Note: Part of this Blog Essay is based upon a Personal Newsletter Article which I wrote about Herbert Croly a number of years ago. The essay has been substantially modified and updated, but almost with some regret Croly’s thought seem to remain stubbornly relevant to the nature, the style, and in many respects even the subjects of our current American conversation).

Herbert Croly to this day remains a complicated fellow. He was born in New York City in 1869. He died in Santa Barbara, California in 1930. Many decades before Bill Gates and Mark Zuckerberg led the way and made it cool to drop out of Harvard and make a few billion dollars in the process, Croly had already himself dropped out of Harvard — and, more interestingly, had been re-admitted to Harvard three times. He never graduated, although he was eventually given an honorary degree a year after the publication of The Promise of American Life.

 For 38 of his 61 years, he was married to Louise Emory Croly. They never had any children. The Promise of American Life is the only book of prominence or significance that he ever wrote — and even it sold only 7,500 copies during his lifetime. Nevertheless, The Promise of American Life, even today, is widely considered to be one of the most influential books ever written on the subject of American political theory – for the breadth and importance of its subjects; for the clarity – if not the correctness – of its arguments; for Croly’s articulated love of this country, and for eloquence of Croly’s commitment to America’s potential greatness.

Croly was, in this writer’s opinion, wrong in some of his conclusions – for example, his too unfettered and uncluttered belief in the importance of a strong federal government as the counter-weight to the private economic forces arising in the industrial age. Relatedly and (mis-)guided by the spirit of his age, Croly adhered to an almost unqualified faith in labor unions as the means for protecting the workers from the press of those economic forces. Nevertheless, Croly’s book remains powerful, and the significance of Croly remains.

 He explained the need of a continuing American conversation. He understood the importance of understanding that America was and would — by its very nature — almost always remain in a period of great transition. By the end of his era in the late 1800s and early 1900s, America had shifted from the Jeffersonian agrarian age to the more prosperous, but more hard-edged, industrial age. Presciently, Croly also understood and warned of the dangers attendant to the “morally and socially undesirable distribution of wealth.” But above all, Croly was passionate about the role of community and the burdens and responsibilities of its citizens. As stated by Croly, the promise of American life cannot merely be an “anticipation,” but instead it literally is a “responsibility” for our citizenry to pursue a “common voice.”

Thus, the very significance of this book — which I refer to as Herbert Croly’s One Little Book, is in part its durability. In this book, published in 1909 — 105 years ago, Croly thoughtfully addressed issues which America is again facing now – the role of the federal government versus the state governments; the relevance of income and wealth disparities; the importance of reason, discussion and debate; the responsibility of citizens; and the importance and role of both forging and protecting our national community.

As every writer – and especially every biographer, knows, it’s always dangerous writing about a man whom the writer never met. This is certainly true with respect to any comments about Croly as well. There are signs that he was not always an easy fellow to get along. He had many close friends such as Justice Learned Hand and Supreme Court Justice Felix Frankfurter, but he also fell out of favor with other former friends such as his New Republic Magazine co-founders Walter Lippmann and Walter Weyl. Similarly, it is possible to over-estimate the impact of his works upon any component of our ongoing national debates. Nevertheless, although in almost certain likelihood Croly was by no means a perfect man — he did write “one little book” which may be as valuable today as it was a century ago.

 Parts of the essay below were written by me a number of years ago. It has been slightly updated with respect to some of the named references, but it is set forth here because it, like Croly’s One Little Book, may have  a sustained relevance today as well. 

 Copyright © M. Borgen, 2014. All Rights Reserved.

 

Facts of the Day

Increasing Correlation between CEO Compensation and Companies’ Financial Results;

Examples of EU and Swiss Changes in Corporate Governance Rules.

 Between 2009 and 2011, “(o)n average, for every additional 1% a company returned to shareholders … the CEO was paid 0.6% more last year,” and there was a parallel and corresponding decrease in CEO compensation with respect to companies which suffered a decline in shareholder returns. Thurm, S., “CEO Pay Moves With Corporate Results,” The Wall Street Journal, May 21, 2012, citing a study by the consulting firm Hay Group. See also, Lublin, J. The Wall Street Journal, February 6, 2013 (A “growing number of U.S. companies… are restricting certain compensation when total shareholder return is negative.”). The most common form of this increasingly common tactic (initiated more often by “board members themselves, and activists”) is “lowering performance shares during down periods – even if a company outperforms rivals.” Steinhauser, G., Fairless, T., MacLucas, N., The Wall Street Journal, February 28, 2013.

The EU and other countries are taking even more aggressive approaches. In an attempt to curb the temptation for the exercise of risky financial behavior, the EU adoption of strict ceiling on bank bonuses so that no bank bonus may exceed a bankers’ fixed salary. A Swiss referendum — “dubbed the ‘rip-off’ initiative — passed overwhelmingly last year by a 67.9% to 32.1% margin. Under this referendum “shareholders (are allowed) to block salaries, ban so-called golden handshake and parachutes … and … greater transparency on loans and pensions to executives and directors (is required).” Examples of such mandated transparency are the now required disclosure of all loans to executives and the requirement that pension funds tell their members how they voted at shareholder meetings.  In addition, although some EU countries such as the Netherlands and Denmark permit shareholder approval of executive compensation, such “say-on-pay” votes remain non-binding in both Great Britain and the United States. Jordans, F., huffingtonpost.com., March 3, 2013.

 Portions of above “Facts of the Day” excerpted from Borgen, M., The Relevance of Reason – The Hard Facts and Real Data About the State of Current America – Business and Politics (2013).

 Copyright © M. Borgen, 2014. All Rights Reserved.

 

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This entry was posted on Wednesday, May 7th, 2014 at 7:38 am and is filed under American condition, American conversation, Corporate Governance, Herbert Croly, Political Cynicism, U.S. business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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