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« You Have No Rights, by Matthew Rothschild | Main | Community Organizing & People Power »


Supercapitalism, by Robert Reich

By an everyday book reader
August 1, 2007

From the greatly admired author of The Work of Nations and The Future of Success, one of America's greatest economic and political thinkers as well as a distinguished public servant in three national administrations, a breakthrough book on the clash between capitalism and democracy.

Mid-twentieth-century capitalism has turned into global capitalism, and global capitalism - turbocharged, Web-based, and able to find and make almost anything just about anywhere - has turned into supercapitalism. But as Robert B. Reich makes clear in this eye-opening book, Supercapitalism, while supercapitalism is working wonderfully well to enlarge the economic pie, democracy - charged with caring for all citizens - is becoming less and less effective under its influence.

Reich explains how widening inequalities of income and wealth, heightened job insecurity, and the spreading effects of global warming are the logical outcomes of supercapitalism.

Supercapitalism: The Transformation of Business, Democracy, and Everyday Life
by Robert B. ReichBook Picture

Hardcover: 288 pages
ISBN: 9780307265616, 0307265617
Knopf
September 2007

Reich shows us why companies, fighting harder than ever to maintain their competitive positions, have become even more deeply involved in politics; and how average citizens, seeking great deals and invested in the stock market to an unprecedented degree, are increasingly loath to stand by their values if it means biting the hands that feed them.

He makes clear how the tools traditionally used to temper America's societal problems - fair taxation, well-funded public education, trade unions - have withered as supercapitalism has burgeoned.

"Reich is a big thinker and a great writer." - The Washington Post

In this compelling and important analysis of the triumph of capitalism and the decline of democracy, former labor secretary Reich urges us to rebalance the roles of business and government. Power, he writes, has shifted away from us in our capacities as citizens and toward us as consumers and investors. While praising the spread of global capitalism, he laments that supercapitalism has brought with it alienation from politics and community. The solution: to separate capitalism from democracy, and guard the border between them. Plainspoken and forceful, if somewhat repetitious, the book urges new and strengthened laws and regulations to restore authority to the citizens in us. Reich's proposals are anything but knee-jerk liberal: he calls for abolishing the corporate income tax and labels the corporate social responsibility movement distracting and even counterproductive. - Publishers Weekly

Reich sets out a clear course to a vibrant capitalism and a concurrent, equally vibrant democracy. He argues forcefully that the spheres of business and politics must be kept distinct. He calls for an end to the legal fiction that corporations are citizens, as well as the illusion that corporations can be "socially responsible" until laws define social needs.

Roughly between 1945 and 1975, America struck a remarkable accommodation between capitalism and democracy. It combined a hugely productive economic system with a broadly responsive and widely admired political system. America in those years achieved its highest degree of income equality (since measurements have been available). It generated a larger proportion of good-paying jobs than before or since, and more economic security than ever for more of its people. Perhaps not coincidentally, in those years Americans also expressed high confidence in democracy and trust in government, both of which sharply declined in subsequent years. That singular success and that powerful promise extended the moral authority of the American system throughout the world. In contrast to Soviet communism, America became an exemplar of both political freedom and suburban middle-class affluence.

The economy was based on mass production. Mass production was profitable because a large middle class had enough money to purchase what could be mass-produced. The middle class had the money because the profits from mass production were divided up between the giant corporations and their suppliers, retailers, and employees. The bargaining power of these latter groups was enhanced and enforced by government action. Almost a third of the workforce belonged to a labor union. Economic benefits were also spread across the nation - to farmers, veterans, smaller towns, and small businesses - through regulation (of railroads, telephones, utilities, and energy supplies) and subsidy (price supports, highways, federal loans). Thus did democracy offset the economic power of large-scale production and widely disperse its benefits. - Robert B. Reich, excerpted from Supercapitalism

Reich explains why we must stop treating companies as if they were people - and must therefore abolish the corporate income tax and levy it on shareholders instead, hold individuals rather than corporations guilty of criminal conduct, and not expect companies to be "patriotic."

For, as Reich says, only people can be citizens, and only citizens should be allowed to participate in democratic decision making.

Robert B. Reich is University Professor at Brandeis University and Maurice B. Hexter Professor of Social and Economic Policy at Brandeis's Heller Graduate School. He has served in three national administrations, most recently as Secretary of Labor under President Bill Clinton. He is cofounder and national editor of The American Prospect, and his writings have appeared in The New Yorker, The Atlantic Monthly, the New York Times, the Washington Post, and the Wall Street Journal. This is his ninth book. He lives in Cambridge, Massachusetts, with his wife, Clare Dalton. They have two sons.

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