Supercapitalism: The Transformation of Business, Democracy, and Everyday Life

Robert Reich, President Bill Clinton's secretary of labor and one of the most provocative public intellectuals in the U.S., unflinchingly explores the transformation of American democratic capitalism into a system of "supercapitalism," in which corporations and the market exercise apparently unbridled power. Reich considers and then discards most, if not all, of the standard leftist explanations for this development. Instead, in a logically coherent analysis, he arrives at some startling but convincing conclusions. For example, arguing that the government should never treat corporations like people, Reich advocates eliminating the corporate income tax. getAbstract recommends this book to anyone who wants to understand today's economics, politics or fiscal events. Although recent legislation attempts to address some of the issues Reich raises, such as the flow of corporate money into political campaigns, his analysis is still relevant.

Robert Reich's Supercapitalism is the best big-picture book I've read in years. Dispassionately, it cuts through partisan noise and pinpoints the competitive pressures that have driven global business to serve us all supremely well in our capacities as consumers and investors -- while simultaneously eroding democracy and community. Reich locates a technological tipping point in the mid-to-late 70s that destroyed big businesses' insulation from global competition and made managers answerable to institutional investors ever-ready to move capital to any competitor who maximizes profitability. These pressures produce great products, low prices, and high-return investment vehicles in which the majority of Americans have some share. The same forces also produce constant downsizing and outsourcing, relentless downward pressure on wages, culturally corrosive media and entertainment, and denuded downtowns. Even more dangerously, supercapitalism drives a lobbying arms race, in which each company and industry strives for competitive advantage on the legislative front (as in every other arena). Companies lobby not because they're conspiring to squeeze out the public interest, but to fend off rivals' attempts to gain advantageous legislation. The result is near-complete corruption of the legislative process as companies compete to buy legislation. Reich's argument is compelling in large part because he convincingly debunks the vilification of individual actors -- Wal-Mart, lobbying corporations, corrupt politicians, right wing ideologues. The fault, such as it is, lies with all of us. Insofar as we seek the highest quality goods at the cheapest price and highest possible returns on our investment, we are all cracking the whip that keeps wages low, insecurity high, compensation for those who deliver the goods astronomical, and money flooding our political system. Reich's account of a 'supercapitalism' that is eroding democracy constitutes a compelling challenge to the neo-Hegelian thesis of Francis Fukuyama's The End of History and the Last Man, which suggests that after the collapse of communism, human society worldwide has nowhere to go (or grow) but into democratic capitalism. These days, as we obsess with the Islamic backlash against globalism, it's fashionable to laugh at what's perceived as Fukuyama's triumphalism in that 1992 look forward. But Fukuyama's detractors are laughing at a caricature of his work. Fukuyama never suggested that the path to worldwide democracy would be smooth or swift or that it could not be derailed by irrational forces. Like Reich's, Fukuyama's argument is essentially Darwinian: he sees sheer competitive pressure driving underdeveloped societies, first toward capitalism, and then, as economic growth creates a middle class, toward democracy As wealth accumulates in an authoritarian free market country, Fukuyama suggests, a critical mass of people acquire both the means and the motivation to ensure that they can't be robbed

My friend Joanie's father was uneducated and had a very poor work ethic. Yet he worked for a union for 30 years, retired in his 50's and collected health care and pension benefits for 30 more years. His wife did not work, they lived in a nice home in the suburbs and he put three kids through college. He was fortunate enough to have been born in the right place at the right time (as well as being of the preferred race and sex). His grandson, Jared, Joanie's son, is 25, has three years of college education, works very hard (about 60 hours per week), lives with his mother and will probably never be able to afford the home and lifestyle experienced by his grandfather. While the US GDP has grown rapidly, the benefits of the process are not readily visible to Jared - or millions of other young people like him. Supercapitalism does an excellent job of explaining what has happened to the US economy - and why Jared is having a harder time than his grandfather. While the term 'fair and balanced' is overused by parts of the media, this book is actually 'fair and balanced'! Rather than bashing corporations - and corporate executives - Reich points out that they should be expected to do what they do - provide the best products at the lowest prices for consumers and provide a competitive return for stockholders. He also says that we, as citizens, should become more actively involved in making decisions that are in the best interest of our country. Reich discusses a major roadblock for citizens to overcome when he notes, "But the largest impediment to reform is one brazen fact: Many politicians and lobbyists want to continue to extort money from the private sector. That's how politicians keep their hold on power and lobbyists keep their hold on money." Supercapitalism presents a clear analysis of why we are where we are - and a call to action for citizens to become more involved in promoting the common good.

According to Robert Reich, former Secretary of Labor in the Clinton administration, there was a time when capitalism and democracy where almost perfectly balanced. This was the period of 1945 to 1975, which he calls the "Not Quite Golden Age." During this period there was a three-way social contract among big business, big labor, and big government. Each made sure that they as well as the other two received a fair share of the pie. Unions recieved their wages and benefits, business their profits, and regulatory agencies had their power. It was also a time when the gap between the rich and the poor was the narrowest in our history. It was not quite the golden age because women and minorities were still second class citizens, but at least there was hope. Fast forward to 2007, capitalism is thriving and democracy is sputtering. Why has capitlism become supercapitalism and democracy become enfeebled? Reich explains that it was a combination of things: deregulation, globe spanning computer networks, better transportation, etc. The changes were mainly a result of technological breakthroughs; unlike many leftists, he is not conspiratorial thinker. The winner of this great transformation was the consumer/investor and the loser was the citizen/wage earner. The consumer has more choices than ever before and at reasonable prices. The investor has unprecedented opportunities to make profits. The citzen, however, is not doing well. The average citizen does not have much voice - other than voting - in the body politic. And on the wage earner has been stagnating for many years. The most salient illustration of this trend is Walmart. Walmart delivers the goods at low prices, but the trade-off is low wages for their employees. We justify this dilemma, as Reich nicely puts it, because "The awkward truth is that most of us are of two minds." As a left-leaning author, Reich makes some startling pronouncements. One, stop treating corporations as human beings. They are neither moral or immoral, they are merely "bundles of contracts." I couldn't agree more. Stop expecting corporations to be socially responsible, see them for what they are: profit-seeking organizations. Any socially responsible action is a ruse to bolster the bottom line anyway. Don't even encourage them to be socially responsible because it will wrongly lead us to believe that they are solving problems when they are not. Corporations play by the rules that they are given and it is up to citizens and their elected representatives to change the rules. This is no easy task in the age of supercapitalism. There are currently 38,000 registered lobbyists in Washington DC in a virtual arms race of spending with each other to buy favors from our so-called representatives. The only way citizens can compete with this is not by hiring more lobbyists but advocating through new media outlets such as the internet and cable tv. This, according to Reich, is currently to most effective wa