Supercapitalism by Robert B. Reich. Knopf, 2007.
When I was in elementary school I would sometimes "cheat" on books by reading the last chapter first so that I would know how everything turned out. I thought I was being smart by doing this, but I probably ruined the books and spoiled a lot of surprises. I've tried to resist the temptation to cheat since third grade and I've been successful, mostly.
But I couldn't stop myself from cheating on this new book by Robert Reich. I tried to read it the honest way, but I got all bogged down in Reich's pointed re-telling of 20th century American political and economic history. I guess I have just read too darn many books that selectively tell that story in order to lead the reader to a particular (and seeminly inevitable) conclusion. I even did this myself in Mountains of Debt. So I cheated and jumped to the final chapter, "A Citizens Guide to Supercapitalism" and I'm glad I did.
That final chapter really cuts to the case and the points that Reich makes there makes me as glad that he wrote this book as I was sorry about it when I was working my way through the history. Herewith a quick summary.
Capitalism and democracy don't necessarily come together as a package, but they do work effectively together because capitalism allocates power in one way, which can be subject to abuse, and effective democracy creates a countervailing power that can correct or offset capitalism's faults. Capitalism, for example, creates prosperity and inequality. Democracy can (and should according to Reich) act to reduce the inequality and rein in capitalism's abuses generally. You can't expect capitalists to act in the public interest, that's not their role. You need an effective political system to do that.
Capitalism and democracy (which Reich associates with an almost golden mid-century era) has been replaced by hyper-competitive supercapitalism. Corporations are now driven even more intensely to serve the interests of their customers, who want more for less, and their investors, who want more and more. Business can's afford to look after social interests because this increases costs and lowers profits and and neither customers nor investors will tolerate that. One false move and buyers and investors will move on to someone or something else -- and there's always something else in the huge global economy. Reich's corporations are not the masters of their universe but the victims of it.
At this point you expect Reich to condemn capitalism, or at least the capitalists, but he won't do it. He lays the blame at the feet of the politicians who are busy soliciting contributions from these very corporations. They capture the corporate donors or are captured by them. In any case, they don't any longer play the role of balancing the forces of supercapitalism because they are part of it. The real problem with supercapitalism, he argues, is not so much capitalism as democracy -- and his book is really a plea (and a plan) to try to restore democratic institutions so that they can play their critical balancing role in society.
I found much to agree with in Reich's analysis and I recommend this book -- or at least the last chapter!