Robert Reich is sometimes categorized as a standard liberal idealogue. This book should put that characture to rest. Reich sees himself as pro-capitalism. The market is needed, Reich argues (echoing Milton Friedman) because dissent is undermined if one cannot dissent and also buy bread without government funds. There is, however, a difference between democratic capitalism and supercaptilism. And we have gone from one to the other, with terrible results.
Simply put, Reich's thesis is that following the great depression and the second world war a set of regulations and the existence of strong unions kept capitalism democratic. Wages were good, the economy prospered, and the gap between rich and poor was small. What happened, as everyone knows, is that all this was undone. Since the 1970s unions have been crippled, corporate lobbyists have bought off most of washington, and the gap between rich and poor has grown beyond anyone's wildest imagination. why this has happened, however, is something Reich thinks has not been fully understood.
The Standard liberal critique is that Ronald Reagan and the Neo-cons reversed and destroyed the new deal, corporations sacrificied social responsibility to seek profit alone, and cogressmen were bought off by their corporate masters. There is truth in these claims, but they are not, Reich argues the root of the problem.
Democratic capitalism was transformed to supercapitalism because the consumer and investor in us has won out over the citizen. This is Reich's cetral claim. We pay lower prices for our goods. This satisfies the consumer and reaps profits for the investor. But how can companies charge such lower prices? By pushng the costs onto employees, who recieve fewer and fewer benefits and lower and lower wages.
We attempt to fix this problem, Reich argues, in a very poor way. We appeal to personal responbility alone. We think it's all a matter of individuals "behaving decently" We wag our fingers at corrupt CEOs and demand corporations "act responsibly." But this is not what corporations do. They exist to make profits. We should not simply protest and scold, we must change the system.
Reich argues that the only way to fix our system is to regulate it. Corporations will not serve the public good; they are not desinged to. Nor should they be. A corporation exists to make money. Money is often made by harming the environment, hurting employees, and deceiving the consumer. It's only simple pragmatism to realize this. Therefore, Reich concludes, the time has come to subject the system to a radical revision. We must regulate our corporations, and find ways to keep corporate money out of washington pockets (perhaps by insisting on public campaign financing).
This is really an original an intersting book. Filled with pertinent sources ad arguments, this book forces us to consider what we must do to make capitalist serve democracy, rather than - as is our present system - make the people serve capitalism.
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