Saving Capitalism

Readers of liberal media know the story. Inequality is getting worse, banks, corporations and rich individuals distort ‘the system’ to their own advantage. Communities are being gradually destroyed, as is the ability of the mass of people to support public services. In short, modern capitalism has become unfair and unsustainable. And then on top of that, increasing automation is destroying ever more jobs, just as education is creating ever more people capable of doing them.

saving capitalismRobert Reich is a professor on public policy at Berkeley and well known author. His book ‘Saving Capitalism’ explains it all, particularly in the context of the US. His subtitle ‘For the Many, Not the Few’ expresses well where he is coming from.

Reich points out that typical public debate between right and left between ‘free markets’ and ‘more government’ actually obscures the real issue. Governments are responsible for designing, organising and enforcing markets, and this is where the focus should be. Particularly in the US, moneyed interests have successfully subverted the process in their own favour. The resulting increased inequality is there for all to see.

As Reich explains, this direction has been supported by both Republican and Democratic establishments from the era of Reagan, through Clinton, Bush, Obama. The countervailing powers to the extremes of capitalism have been gradually eroded, organised labour largely destroyed, ever-reduced and ineffective regulation, lack of control on monopolies, lax bankruptcy laws for big companies, shareholders given preference over other stakeholders, legislation influenced ever more by big money, revolving doors between corporations and government, obscene rewards to chief executives… All of course came to a head with the financial crash of 2008, after which banks were deemed ‘too big to fail’, were bailed out and the American people paid the price.

As Reich points out, this sort of thing has all happened in the US before, and the system has eventually righted itself, notably when ‘big oil’ was dismantled, when Franklin Roosevelt’s ‘new deal’ came along, when AT&T was dismantled and so on.

The challenge today is to restore suitable countervailing power to the political-economic system, so that the system can again flourish, and democracy itself be renewed. And this in a climate where technology increasingly means that the old ways of mass employment will no longer work.

The ‘rules of the market’ need to be designed anew, and the corporation ‘reinvented’. Reich is confident that this can be done. But to do it people need to begin to care and maybe re-establish some of the grassroots movements that provide necessary countervailing power. The Bernie Sanders and Jeremy Corbyn movements begin to show that the impetus is there among younger people, in both UK and US. Indeed on the other side of the spectrum the Tea Party showed similar characteristics.

The populism currently sweeping the world is not the answer, rule by over-blown egos is ultimately non-democratic. Reich highlights the problem and the needed direction with a clarity that is commendable. We all need to be listening and using what influence we might have.

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3 thoughts on “Saving Capitalism

  1. Robert Reich is one of my favourite thinkers and authors. I’m glad he still has hope that this depressing state of the western world can be turned around. I don’t think it’s going to be a quick turnaround. I’ll just hope for some kind of turnaround, some how, some time. The successful attacks on unions in the US (meaning lower wages for the workers and more profits for the bosses), not to mention the successful attacks on civil rights and human rights, leave one despairing.

    Liked by 1 person

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