Book Review: Saving Capitalism

Saving Capitalism-For the many, not the few

By Robert B. Reich 

Written by former Secretary of Labour (In Bill Clinton's administration) Robert Reich, Saving Capitalism is a highly informative piece of work which lays out in great detail and context, how the American political process has been altered throughout the years in order to be incredibly responsive to the needs of Corporations, wealthy individuals and other special interest groups, and the effect that has on the American middle class, which is the weakening of workers rights, their right to unionize, and that such massive inequality of wealth stacked at the top of society hurts the economy, leading to economic crisis in which the American taxpayers bail out big businesses, with little accountability on their part for the role they played in causing such crisis.

Throughout the entire book, Reich takes a methodical approach to providing a wealth of context for the problems he tackles. The book is divided in 3 parts, the first in which he rigorously debunks the myth of the "free market" which holds that Governments should not regulate intrusively, since the rules of the free market will determine which financial endeavors will succeed, and which will fail, based on consumer choice/opinion and which businesses can outperform the competition. Reich takes a sledgehammer to this notion, and explains that there is no naturally occurring free market, it is always legislation that determines the conditions of the market, and the more pertinent question is who the market is regulated in favor of, which Reich later points out, is toward giant Corporations, and certain monopolies in their respective industry, such as cable companies Time Warner and Comcast. The current conditions of the "free market" heavily favor these monopolies, and perpetuate their continued success, as consumers have the illusion of choice.

In Part Two of Saving Capitalism Reich continues the debunking, this time turning his focus to the myth of work and worth, the idea that you are paid what you are worth, which fails miserably to explain the massive pay inequality between workers and CEO's. Reich explains that CEO's are not worth the work they perform, that it is corporate mechanisms and cronyism that gives them their outrageously high income. Reich also lays out the decline of the American middle class worker, and gives context to the days of FDR and the New Deal which saw American workers at their strongest point in U.S history, which is a stark contrast from todays American workers, where there is now a new class, the working poor, who work full time jobs, even multiple jobs, yet whose wages have not been matching the productivity of the American workers and the inflation rate over the years.

It is in Part Three of the Book that Reich lays out his recommendations as how to save capitalism, by reinforcing the bargaining power of the working class through Unions, and other methods of Countervailing Power by which to force Corporations to negotiate fair wages for their workers, which in turn benefits the economy in the long term, as the middle class have purchasing power by which they further economic growth by spending money on products manufactured by the titans of industry, such as car manufacturers. Reich also brings focus to threats to capitalism from other areas, such as globalization, the prospect of  workers from less economically prosperous nations willing to do the same work for lower wages, and also the growing robotics industry, which could see the replacement of certain jobs with an automated workforce, these make for fascinating topics to find solutions to.

I highly doubt I could do this book justice as to how well it lays out the problems in American politics and economics, and how closely woven they can become, so here is renowned economist Joseph Stiglitz' take of Saving Capitalism.

"Robert Reich has written a riveting guide to how our economic and political system has become so badly flawed, distorted by pervasive rent seeking and monopolies. He explains our rising inequality and our poor economic performance. Wholesale reform is needed- far beyond the usual prescriptions of raising the minimum wage and spending more money on education."

And if that doesn't give you enough of a tease as to the contents of this book, I have a few quotes that Robert cites within the book that sometimes perfectly capture Americas current reality.

"There are two modes of invading private property; the first by which the poor plunder the rich - sudden and violent; the second, by which the rich plunder the poor, slow and legal." - John Taylor: Foreword

"We can have a Democracy or we can have great wealth in the hands of a few, but we cannot have both"- Louis Brandeis

"Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me - and I welcome their hatred." Franklin D. Roosevelt, on attacks against him from Wall Street and other big business.