Read Saving Capitalism: For the Many, Not the Few by Robert B. Reich Online


From the author of Aftershock and The Work of Nations, his most important book to date—a myth-shattering breakdown of how the economic system that helped make America so strong is now failing us, and what it will take to fix it. Perhaps no one is better acquainted with the intersection of economics and politics than Robert B. Reich, and now he reveals how power and influenFrom the author of Aftershock and The Work of Nations, his most important book to date—a myth-shattering breakdown of how the economic system that helped make America so strong is now failing us, and what it will take to fix it. Perhaps no one is better acquainted with the intersection of economics and politics than Robert B. Reich, and now he reveals how power and influence have created a new American oligarchy, a shrinking middle class, and the greatest income inequality and wealth disparity in eighty years. He makes clear how centrally problematic our veneration of the “free market” is, and how it has masked the power of moneyed interests to tilt the market to their benefit. Reich exposes the falsehoods that have been bolstered by the corruption of our democracy by huge corporations and the revolving door between Washington and Wall Street: that all workers are paid what they’re “worth,” that a higher minimum wage equals fewer jobs, and that corporations must serve shareholders before employees. He shows that the critical choices ahead are not about the size of government but about who government is for: that we must choose not between a free market and “big” government but between a market organized for broadly based prosperity and one designed to deliver the most gains to the top. Ever the pragmatist, ever the optimist, Reich sees hope for reversing our slide toward inequality and diminished opportunity when we shore up the countervailing power of everyone else. Passionate yet practical, sweeping yet exactingly argued, Saving Capitalism is a revelatory indictment of our economic status quo and an empowering call to civic action.From the Hardcover edition....

Title : Saving Capitalism: For the Many, Not the Few
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ISBN : 25711240
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Number of Pages : 304 Pages
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Saving Capitalism: For the Many, Not the Few Reviews

  • Hadrian
    2019-03-24 06:04

    Reich links the concentration of wealth at the top to their increasing political power, and therefore it is in their interest to maintain this system of affairs. Borrows heavily from J. K. Galbraith's idea of 'countervailing forces' to maintain a more stable form of democracy and market capitalism, including investment in human capital, unionization, and reform of legal loopholes. Like Atkinson, does not view inequality as the inevitable result of capitalism, but the deliberate result of misguided policy decisions since the 1980s, and a return to a comparative 'golden age' from the 1940s-early 1970s is still possible. A thoughtful and responsible approach to the problems of economic inequality.

  • Mal Warwick
    2019-03-17 07:36

    If you’ve ever been exposed to Robert Reich’s “Wealth and Poverty” course at UC Berkeley, perhaps through the film Inequality for All, or heard him speak in public, you know that there are few people alive today who are his equal in the ability to explain complex economic and social issues so cogently and compellingly. And few indeed are as funny as he is, either: the man could make a go of a career with a standup act.capitalismHowever, there’s not a lot of humor in Saving Capitalism, Reich’s fifteenth book. In this brilliant long essay, the former U.S. Secretary of Labor takes on the economic issues of the day from a perspective that rarely comes to light in public discourse: he rejects the widespread assumption that a “free market” exists independent of government.“A market — any market — requires that government make and enforce the rules of the game,” Reich writes. The size of government, the preoccupation of the American Right for the past four decades, is a distraction from the reality that big corporations and the country’s wealthiest people have steadily rigged the rules that structure the economy — through lobbying, massive political contributions, and the courts. Society’s biggest challenge today, inequality in wealth and income, was the inevitable result of the steady shift of power to the “1%” from the rest of us, as Occupy Wall Street so famously pointed out. “The critical debate for the future is not about the size of government,” Reich adds; “it is about whom government is for.” This is a view of American society from 30,000 feet.Reich cites a study by two scholars who set out to gauge “the relative influence . . . of economic elites, business groups, mass-based interest groups, and average citizens.” The study concluded, “The preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy.” In other words, everything you ever feared about the influence of the 1% is true.As Reich explains in a particularly enlightening chapter, “The Decline of Countervailing Power,” the principal reason why Wall Street, the corporations, and the superrich have managed to enrich themselves at the expense of the middle class and the working poor is that the counterweight to what we call the 1% today has steadily withered away since the 1970s. Reich refers to the “interest groups and membership organizations — clubs, associations, political parties, and trade unions — to which politicians were [once] responsive.”The most potent of these factors was, of course, the labor movement. Following World War II, labor stood toe-to-toe with Big Business when it came to employees’ wages and working conditions and wielded huge influence in Washington. As we’re so painfully aware, that is far from the case today — but the decline of organized labor didn’t happen by accident. It was engineered beginning in the early 1970s by the U.S. Chamber of Commerce, the National Association of Manufacturers, and their Republican allies, working from the top down through the courts, the Congress, and state governments across the country. Reich doesn’t tell this story, perhaps because it’s so well known.Saving Capitalism should be required reading for every American who wishes to understand the way our society works today. Unfortunately, though the book has already begun to climb on the bestseller lists, we can be sure that will never happen in an era when a megalomaniacal reality TV star is topping the polls in the Republican presidential primary competition.Robert B. Reich served three presidents — Gerald Ford, Jimmy Carter, and Bill Clinton — in the course of a long and distinguished career in academia and government. Currently he is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California, Berkeley.

  • Caren
    2019-03-22 08:54

    Reich's key point, and the one on which the rest of the book hangs, is that our political debate over preferring the "free market" on one hand to more government intervention on the other, is misguided: there is no disembodied market without rules made by government, that is, by humans. In our present culture, the rules strongly favor the people at the top---those with the most money---and that money buys power. He points out that this situation is not only not desirable but not sustainable in the long run. Reich is now a professor and the book is explained clearly, just as you'd expect from a good teacher. He says many people have become apathetic about politics, knowing instinctively that the system is rigged, but that political involvement is more important than ever. Here are Reich's words about how to proceed:"The critical debate for the future is not about the size of government; it is about whom government is for. The central choice is not between the "free market" and government; it is between a market organized for broadly based prosperity and one designed to deliver almost all the gains to a few at the top. The pertinent issue is not how much is to be taxed away from the wealthy and redistributed to those who are not; it is how to design the rules of the market so that the economy generates what most people would consider a fair distribution on its own, without necessitating large redistributions after the fact. The vast majority of the nation's citizens do have the power to alter the rules of the market to meet their needs. But to exercise that power, they must understand what is happening and where their interests lie, and they must join together." (page 219)Here is Reich speaking about his book: may also like to visit his website:

  • R.K. Gold
    2019-03-19 05:40

    This is a really quick read for the liberal looking to impress their friends and win a few internet debates about economics. Far from perfect, it substitutes in-depth analysis for readable theory making it the perfect introduction to the material. What makes this book a five-star read is that it's applicable. It uses plenty of real-world examples, explains their faults, then offers theoretical suggestions for improvements. If you need to whip out a quick argument for a certain relative during Thanksgiving, this might be a helpful little book to keep by the dinner table.

  • Bam
    2019-02-23 06:00

    "Those who claim to be on the side of freedom while ignoring the growing imbalance of economic and political power in America and other advanced countries are not in fact on the side of freedom. They are on the side of those with the power."It's no surprise to any American that the rich are getting richer and the poor poorer. Name it and the deck is stacked in their favor: from political campaigns financed by Dark Money, to Wall Street with banks 'too big to fail' rescued by taxpayer money, to lobbyists working in the interests of huge corporations. On and on. It's all so depressing! One countervailing suggestion that Reich makes 'would be to provide all Americans, beginning the month they turn eighteen and continuing each month thereafter, a basic minimum income that enables them to be economically independent and self-sufficient.'Or a return to stakeholder capitalism, with so-called 'benefit corporations, which take into account the interests of workers, the community and the environment, as well as shareholders.' Some examples of such companies are Market Basket, Patagonia and Seventh Generation. Another would be to 'forgive the student debts of graduates who choose social work, child care, elder care, nursing, legal aid, and teaching'--those jobs that so important to our society but so woefully underpaid. Wouldn't that be terrific? I recommend this book to help readers understand what forces have caused this shift in power to the wealthiest 1% of our country and to identify some ways we can try to change things. I think we are in big trouble if we don't. Things will only get worse.I also recommend Robert Reich's Resistance Report which is available on Facebook most weekday evenings. He addresses what he sees as problems with the Trump administration's policies and urges everyone to become politically active--attend town hall meetings, call your senators and representatives, and educate yourself by reading: It Can't Happen Here, THE FUTURE OF DEMOCRACY: Lessons From the Past and Present To Guide us on our Path Forward, The Psychology of Dictatorship, 1984, The Origins of Totalitarianism and Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right to name a few.

  • Emma Sea
    2019-02-24 08:49

    For the first 180 pages on why we're fucked, five stars. For the last 37 pages, which entirely fail to unpick how the hell we stop being fucked, 1 star.

  • Miles
    2019-03-07 05:53

    In 1922, American philosopher John Dewey published Human Nature and Conduct, wherein he elucidated the relationship between freedom and knowledge. “The road to freedom,” he wrote, “may be found in that knowledge of facts which enables us to employ them in connection with desires and aims” (303). Dewey understood that human liberty and progress are always dependent on actionable assessments of present conditions. Without good information, the possibility of freedom evaporates.Nearly a century later, Robert Reich’s Saving Capitalism: For the Many, Not the Few has reformulated Dewey’s observation. “Freedom has little meaning without reference to power,” Reich writes. “Those who claim to be on the side of freedom while ignoring the growing imbalance of economic and political power in America and other advanced economies are not in fact on the side of freedom. They are on the side of those with the power” (15). Seeking to equip readers with the practical knowledge necessary for positive change, Reich brings us a step closer to understanding how the concepts of freedom and power operate in 21st-century America. Saving Capitalism is a rousing and expedient text that diagnoses our economic weaknesses and proposes concrete remedies.Reich’s first priority is to sidestep dichotomies that have muddied the waters of American political rhetoric; framing the argument as a matter of “left vs. right” or “government vs. free market” is antithetical to his goals. Instead, Reich urges us to examine how economic rules are formed, and by whom:"A market––any market––requires that government make and enforce rules of the game…Government doesn’t 'intrude' on the 'free market.' It creates the market. The rules are neither neutral nor universal, and they are not permanent…The rules partly mirror a society’s evolving norms and values but also reflect who in society has the most power to make or influence them. Yet the interminable debate over whether the 'free market' is better than 'government' makes it impossible for us to examine who exercises this power, how they benefit from doing so, and whether such rules need to be altered so that more people benefit from them." (5)The most important sets of rules––Reich’s “Five Building Blocks of Capitalism”––are those governing property, monopoly, contract, bankruptcy, and enforcement (8). Each topic gets a chapter, and Reich explains how, starting in the late 1970s, large corporations and wealthy individuals gained disproportionate influence in designing the economic playing field. This imbalance isn’t unusual from a historical standpoint, but it was a significant shift away from the postwar decades, when the worst excesses of capitalism were checked by the combined influence of labor unions, citizens’ organizations, high wages, and strong government regulation supported by robust and progressive taxation.Contrary to the neoliberal narrative that blames the pressures of globalization and government excess for recent trends, Reich argues that unions, wages, and reasonable regulation have lost sway primarily due to crafty recalibrations of economic rules designed by corporate and financial elites. Consequently, power and wealth have increasingly consolidated at the top, leading to today’s grotesque levels of socioeconomic inequality.Reich’s second goal is to do away with the spurious association between economic rewards and moral worth:"People are 'worth' what they’re paid in the market in the trivial sense that if the market rewards them a certain amount of money they must be. Some confuse this tautology for a moral claim that people deserve what they are paid…But a moment’s thought reveals many factors other than individual merit that play a role in determining earnings––financial inheritance, personal connections, discrimination in favor of or against someone because of how they look, luck, marriage, and perhaps most significantly, the society one inhabits." (91)Reich effectively argues that the “meritocratic myth” is nothing more than a comforting story we tell ourselves to justify the prosperity of some and explain away the poverty of others. This narrative has been a comfort to the wealthy and persuaded many poor people that they deserve their fates. It also veils the plethora of “predistributions” designed to operate “inside the market mechanism itself” (154). These predistributions––tax loopholes, subsidies, structural discrimination, and inheritance laws––tend to favor the wealthy, and are the hallmarks of an economic order that has hollowed out the middle class, increased the number of working poor, and filled out the ranks of the nonworking rich. We will need a new outlook in order to shape an economy that distributes prosperity fairly to all citizens.Finally, Reich predicts that a new “countervailing power” will soon arise to restore balance to the 21st-century American economy. The wishlist of liberal reforms is not unfamiliar: get big money out of politics, provide public funding for elections, ban gerrymandering, restrict the revolving door between public offices and private lobbying firms, and disclose funding sources for “experts” who testify for or against public policies (191-2). And that’s just a start. Eventually, a guaranteed basic income (or some equivalent program) would be implemented to return purchasing power to consumers and counteract the very real problem of technological unemployment. The ultimate goal, as Reich sees it, is to design an economy that “generates what most people would consider a fair distribution [of wealth]” (219).I agree with Reich’s agenda, but it’s worth noting some important factors that are left out. There is no mention of biological and/or cultural proclivities that might hinder or help the transition toward a fairer form of capitalism, nor of the psychological reality that humans are not rational actors in the traditional sense. Reich doesn’t address humanity’s inherent tribalism, which often makes it difficult to sympathize with those perceived to be outside of one’s particular in-group(s). The possible economic consequences of climate change are nowhere to be found. And most glaringly, America’s history of slavery and racial discrimination against African Americans and other minorities is almost completely absent from this text. Given past sins and present tensions, it’s hard to imagine Reich’s reforms having perfectly equitable results for all individuals and communities across America, but he is silent on how we might deal with this problem.I realize that addressing these issues isn’t Reich’s primary goal, and that each is complex enough to fill its own book, but it was hard to finish Saving Capitalism––by no means a cumbersome book––without wondering if it focused overmuch on being strictly economic in a world that is anything but.When it comes to what can be found in Reich’s argument, the rise of his “countervailing power” is the fuzziest element. It’s unclear exactly how we can transition from today’s gridlocked government to a situation where groups of common citizens can wrest power away from those who have so fastidiously amassed it. “No one should expect this to occur smoothly or easily,” Reich admits, but in the same paragraph he also claims that the resurgence of a countervailing power is “inevitable” (191). He appeals to American history, reminding us of the many times that economic influence has been similarly skewed before a combination of government and people power restored balance (The Gilded Age and the New Deal are good examples).There are surely precedents for our current situation, but history is not always an accurate predictor of the future. I don’t think Reich takes seriously enough the possibility that we could be witnessing the end of American democracy and the birth of something else. Never before in history has so much wealth been concentrated in so few hands, and the global elite are not properly restrained by national or international law. Perhaps Reich is correct that “capitalism as we know it will not survive” if current trends go unchallenged, but it’s much less clear whether that outcome would be catastrophic, utopian, or simply different (217). It’s also important to question the notion that the American economy has ever been truly “balanced” in favor of working folks––even in the postwar years for which Reich is so nostalgic.Never once does Reich confront the question rendered inescapable by his book’s title: Is capitalism worth saving? The reader is left wondering whether Reich views capitalism as the final form of human commerce, or if he thinks we will ultimately transition to a different type of distributive system. Should we accept Reich’s assertion that “The essential challenge is political rather than economic,” or is it possible that our problems stem from something rotten in the core of capitalism itself (168)? I’ve neither the expertise nor the wordcount to even begin to answer this question, but I believe it needs to be asked.Despite its limitations, Saving Capitalism is a successful book that provided me with several new framing mechanisms with which to parse economic debates. Such improvements are in keeping with Reich’s mission to help people “understand what is happening and where their interests lie” (219). Like Dewey before him, Reich has surely shown that knowledge is the key to freedom and personal empowerment.This review was originally published on my blog, words&dirt.

  • Alexa
    2019-03-13 08:50

    There is a beautifully clear simplicity to this. Reich’s straightforward analysis is simply a pleasure to read. He simultaneously offers us a chilling look at the market realities in force today and an inspiring view of what we can do to improve things. He is clear-sighted, persuasive, and ultimately inspiring. This is the book that made it clear to me why some people could simultaneously support Donald Trump and Bernie Sanders.His thesis is that “the threat to capitalism is no longer communism or fascism but a steady undermining of the trust modern societies need for growth and stability.” Therefore “the growing insecurities and cumulative frustrations of average people who feel powerless in the face of economies (and market rules) that are not working for them are generating virulent nationalist movements, sometimes harboring racist and anti-immigrant sentiments, as well as political instability.”He goes on to tell us that government doesn’t intrude on the free market, rather it creates the market. The myth of the free market keeps us from examining rule changes and who they benefit. The way government organizes the market determines who will win and who will lose. Economic dominance feeds political power, and political power further enlarges economic dominance – widening inequality is baked in.Here’s a fun fact for you: since charitable deductions are the equivalent of government subsidies, the US government is currently subsidizing Princeton, through tax write-offs, at the rate of $54,000 per student, while public universities, where 70% of US students attend, are subsidized at the rate of $6,000 per student. Or how about this definition: public assistance, a subsidy the rest of American taxpayers pay the fast-food industry for the industry’s failure to pay its workers enough to live on.“When capitalism ceases to deliver economic gains to the majority, it eventually stops delivering them at all.” The rules must be adapted toward creating a more inclusive economy. The critical debate for the future is not about the size of government; it is about whom government is for. Do we want a market organized for broadly based prosperity or one designed to deliver almost all the gains to a few at the top? We need to ask how to design the rules of the market so that the economy generates what most people would consider a fair distribution. And he gives us quite practical sensible suggestions for how that can be done. This is a magnificent work!

  • Matt Messinger
    2019-03-15 02:48

    This is one of those books I read because I enjoy reading authors with whom I agree. That said, I’d be curious to see a data-based refutation of what Reich argues; I think his argument would hold up under objective scrutiny. In short, Reich’s thesis is the “free market” vs. “big government” debate is a distraction. The Invisible Hand of Adam Smith does not exist. In fact humans create the “market” via contracts, laws and policies. Those people with the most money define these components of the market through political influence. This political influence ensures the already-wealthy get more wealthy, facilitating a cycle where more and more wealth concentrates in the hands of fewer and fewer people. As a solution to this Reich recommends instituting “countervailing” powers. These would include:• Reinstituting the Glass-Steagall act which would prohibit banks to co-mingle commercial and investment banking operations. Now, as long as banks meet certain reserve requirements from the FDIC they can use their capital to make risky bets via proprietary trading. If these trading bets go well, the banks get the benefit. If they go poorly, the government bails them out. • Creating a third party to represent the majority for whom capitalism is not working. • Reversing the decisions on the Citizens United (corporations are people to whom the first amendment applies) and McCutcheon (increasing the limits on individual contributions to $1.2 for presidential and $2.4 for the House Speaker). • Public financing of elections. • Limit the revolving door between Government and the private entities they regulate. • Shorten patent and copyright protection periods. • Put more resources in antitrust and securities enforcement. • Prohibit forced arbitration in lieu of class action suits. • Ability to declare bankruptcy on student debt. • Offer wage insurance for the mast majority of workers who live paycheck to paycheck. • Limit the ratio of CEO pay to median-worked pay. The real debate is not free market vs. government or Republican vs. Democratic it is between the haves and the have nots. Everyone deserves a chance to succeed, regardless of the zip code of their birth. Our country is a long way from this vision.

  • Cissa
    2019-02-23 07:40

    This is an important and thorough look at the economic aspect of what is wrong in America today- and since many of our other ills spring from the economics, it speaks to areas not explicitly addressed as well.If you are at all interested in how we got into this mess- and some similar historical situations- read this.In brief: it is not the "free market" vs the "government"; the market would not even exist without the legal enforcement of the government. The problem is that as wealth is accumulated by an ever-shrinking number of people, they are thus able to disproportionately affect the laws that cover the market... and so can rig it so that they keep siphoning off more and more.Now, this is not sustainable in the long run- but they don't care, and the rest of us have little ability to affect these matters.Reich tries to offer some hope...but I don't really see it, at least not until things collapse in a devastating way, which is inevitable unless things change.

  • Kressel Housman
    2019-02-27 08:04

    Regular viewers of Robert Reich’s “Resistance Report” will find the arguments in this book very familiar, but it was written before the 2016 election, which only goes to prove how prescient Robert Reich is. He argues that because of the anti-regulatory business environment that has taken hold since the 1980’s, the influence of money in politics, made all the worse by Citizens United, and the automation and disappearance of more and more of our jobs, the American capitalist system has become so top-heavy that it will collapse if we don’t regulate it to share more of the wealth. Luckily, Reich takes the optimistic point of view, showing times in American history when we chose democracy over runaway capitalism, trimming away at the excesses that concentrate wealth into the hands of the few. If that sounds too socialistic for you, consider some of Reich’s more pessimistic statements: 1) there is no unemployment under slavery and 2) in the medieval era, there was no middle class. The entire economy survived for centuries, benefitting only a small wealthy class. Do you want to go back to slavery or feudalism? A modern version of it may be evolving as the middle class disappears. So to all my libertarian-leaning friends: all this fear of “big government” interfering with the “free market” is unfounded. The people in big business are using government to benefit themselves, and the best thing we can do for democracy is to make government responsive to our needs.

  • Chris
    2019-02-27 04:38

    Reich's book goes a long way in helping to make sense of the current economic state of our country. The wage gap between the lowest earners and highest earners in this country has been increasing over the last few decades and the middle class is slowly shrinking. Reich explains some of the factors that have caused this to occur. In the last 30 years, corporations have gained more and more political influence which, at this stage of the game, is drowning out the voices of individual voters and their concerns. One huge victory for corporations was the 2010 Citizens United Supreme Court case which ruled that it was unconstitutional to prohibit organizations from contributing to political campaigns. This has opened the flood-gates to corporate campaign donations, which in-turn, is causing politicians to be more favorable to pass legislation beneficial to corporations. This is just one example of the current cycle in which corporations and their top executives are accumulating more and more wealth and in-turn, are able to use their wealth to influence politicians. Reich has an informal and very accessible writing style and does an excellent job explaining economic concepts. I would highly recommend this book for those interested understanding the current economic situation our country is in.

  • Book Riot Community
    2019-03-01 04:51

    Reich explains how political changes in the last three decades is accelerating wealth inequality. This is a book that any Bernie Sanders supporter would love. Reich is a great explainer, and entertaining writer. This is not dry economics. Anyone hoping to save the middle class will want to read Reich’s ideas about how to save capitalism.— James Wallace Harrisfrom The Best Books We Read In July 2016:

  • Eli Mandel
    2019-03-02 04:44

    After casting the winning vote for Bush in Ohio (I'm sorry, America) and then voting for McCain (I'm really sorry, America) I started warming up to liberal policies during the Obamacare debate. Sure, I had college debt and I had read Generation Debt (which I had discovered while listening to Brian Lehrer, so I'm not entirely a rube) and I finally had a job that provided health insurance, but even with my wife and I both working full-time we were still struggling. I could never see earning enough to buy a house or have a car with less than 150k miles on it. And really, while it was nice that my employer chose to provide insurance at 75%, I couldn't afford the 25% they didn't cover, not with all the copays, deductibles as well as vision and dental. So I was paying close attention when Obama laid out his plans for single-payer health insurance and national coverage. Then I watched Inequality for All and The High Cost of Low Price. I read The Big Short. I started to understand why I would never have the pension that my older relatives retired on. It's been a few years since I've started leaning solidly left in my politics but I've never taken the time to examine closely some of the fundamental ideas introduced by Big Business and taught as American Gospel about the nature of "free market", "capitalism", "unions", "government intervention". This book was a great primer. This is no dispassionate school textbook. Reich has been in this fight for over twenty years and he's passionate about it. It is also a timely book. Read it and see the current presidential election in light of the ideas presented in it.

  • Hana
    2019-02-23 05:48

    "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, And Inquiry into the Principles and Policy of the Government of the United States (1814)I love the quote with which Reich opens his book!New font is killing my eyes.

  • Jessica
    2019-03-05 03:50

    It's really preaching to the Liberal choir, but this is definitely one I wish more people would read. This book truly puts into clear perspective what is wrong with our political and economic system today, and could inspire revolution if only more of the 99% would tune in.

  • Laura
    2019-03-15 04:56

    This was a fascinating look at the current state of economics in the US. Robert Reich is clearly experience and knowledgable, I'm just not as hopeful as he that we can find the will as a nation to do the right things to save ourselves.

  • Athan Tolis
    2019-03-10 03:38

    Capitalism most definitely is at a crossroads. To claim otherwise is, at best, denial.What’s more worrying is that that there is next to no debate on the relevant issues.I disagree with, dunno, four out of five conclusions Robert Reich draws in “Saving Capitalism,” but it is regardless the best book I’ve read in years because it defines the terms of the debate.You read that right. I consider this left-wing book by a former Clinton (wash my mouth) Labor Secretary one of the best I can remember reading. I’m buying copies for my whole family.The first major issue he tackles is the false debate that pits “free markets” versus “the government,” and this he does straight from the Mancur Olson playbook: spontaneous free markets exist everywhere. A visitor to the former Soviet Union would be confronted with tons of black markets that of necessity sprung up in the absence of official ones, same way a visitor to Marrakesh can walk into the suk where he can find practically anything. (My favorite such market is the former Soviet market for dead lightbulbs you could then bring to work to screw into the fixture left open by the functioning light bulb you’d pilfer from work to bring back to your apartment)But here’s the deal:A bunch of rules must be in place for orderly markets that go beyond the flea market. If you want free markets to thrive, then you need an institution that comes up with and enforces the rules for:1. What am I allowed to own? Can I own other people? Can I own my beachfront? (In Greece, for example, you don’t, the beach is everybody’s). How about ideas? If I can’t own them, will I bother having them? If I own a life-saving idea is it OK for me to own it? Who is allowed to buy me out of a house that’s blocking a new highway and what must he pay?2. If I own something, can I sell it? Where does the statute trump the contract? Californian women can sell their womb, but they can’t sell their blood. Dutch people can own cannabis, but, to quote from Pulp Fiction, to sell it they need a license. And here in the west you can’t sell your children (or yourself) to strangers, period.3. When is it fine to run a monopoly? In pretty much all countries the military is up to the government. The police, not entirely. It is illegal to sell protection, of course, but it is becoming legal to hire security. Most governments are busy giving up the monopoly on mail. Nobody cares that one company in America sells pretty much all chewing gum. Overall, the decision on market power is not trivial.4. What if I can’t pay for something I bought? What recourse should my seller have? Can he seize my property? My family’s property? What am I allowed to contract into offering as security?The institution that (i) decides and (ii) enforces these rules has a name. We call it our government.No government, no market. Just flea markets.The discussion that pits “free markets” versus “government” is dust in our eyes, Robert Reich says and he says so in a non-patronizing, wonderful narrative a kid can follow.He does not stop there. This beautifully penned call to arms breaks the taboos of the unsophisticated, parochial American Left and spares nobody. On page 183, Robert Reich takes aim at the preoccupation of Americans on his “progressive” side of the argument with “noneconomic issues such as same-sex marriage, abortion, guns, race and religion,” and urges them to find common economic cause, because that’s the arena where the politics of the government have true influence first and foremost. Chapeau!What we have here is the bare bones of a ten-star book as far as I’m concerned.I find tons of stars to take off from there, of course, because I disagree with a lot that he has to say.So, for example, I think shareholder capitalism is self-correcting and I genuinely think the stock market is about to punish self-dealing corporates that issued debt to buy their own stock with a massive correction that will bring the practice into disrepute for at least a generation. The government would be hopeless in terms of attempting to adjudicate on who can and who can’t buy his own stock (though I totally agree with Reich that it should not tax-favor such behavior, of course) New competitors, unburdened by silly amounts of debt will spring up and devour the dinosaurs, bet your house on it. (Well you can’t, in this zero rates forever world, they are all privately owned, it drives me crazy)Along the same vein, I think there’s nothing to do about globalization or the progress of science. You just need to give “palliative care” to the victims and assure they can afford to give the necessary education to their children. I don’t think a futures floor trader will ever earn as much money again shouting and gesticulating and I don’t think a petroleum engineer will ever earn as much money again drilling holes and I have zero problem if they join the girl who used to look at me funny from behind the screen and book my airline tickets at STA travel in whatever endeavors she has chosen to pursue. As for the guy who lost his job reading legal documents to some guy in India, he hasn’t really lost all that much: the outsourced job is about to move somewhere to the cloud. Same as all those Chinese manufacturing jobs. At this point, China fires more people from manufacturing jobs every year than we do.Let us not forget that in 1910 some 25% of Americans used to work in Agriculture. That number is now 2% and the US remains the world’s biggest exporter of grain. And fewer than half of those who officially work in Agriculture actually get dirt under their fingers, they mostly work for companies like the Monsantos Robert Reich seems to dislike for monopolizing what is now a tiny (though obviously vital) part of the American economy. My point is that the children of the 23% did not disappear into an abyss, the Great Depression was their parents’ problem and society made sure it wasn’t theirs (chiefly through the GI bill that followed WWII). Our job is not to restore the jobs of the parents. It’s to make sure the kids fit in the new economy. Yes, it’s a massive job, but let’s talk about that, please, let’s not cry about what’s lost and never coming back.And I think he’s barking up the wrong tree with all the campaign finance stuff. The billion dollar charitable foundations set up by the Clintons and Blairs and so on mainly sell exemption from tax. Suppose corporate tax was set to some extremely low number (dunno, 5%) you would not collect a penny less from Amazon, you would help the law-abiding small corporates Reich loves and you would deliver a very targeted punch in the stomach of the gatekeepers of tax exemptions in Congress, the lobbyists, the 10^3 tax accountants GE employs etc. It would not be without its challenges of, course. You’d have to then be draconian about taxing the people who would rush to dress themselves up as companies. All I’m saying is Reich is not at all imaginative when it comes to looking for the right place to strike at the status quo, he’s repeating some of the old solutions and just shouting louder.So when he says we must give power to the unions, he’s ignoring that in the new economy we keep changing jobs all the time. The companies themselves come and go. And he’s ignoring progress. GM had to shut down because it makes cars 8 times more efficiently than it used to. It makes twice as many cars as before, but that means it needs a quarter as many people to make them. Them guys can’t carry four retired people on his back each, all of whom are living longer than it was anticipated they would, incidentally. We cannot “magic” a solution to this problem. The union actually exists, it’s called the UAW and it’s rather powerful, but it cannot work miracles.More generally, unions can either be all-encompassing, like in France, where they cover millions of people across the entire industry, or they can be more industry-specific (example: teachers, autos etc.) or they can even be firm-specific. The all-encompassing union is what we chiefly have in Europe and the results are out: it redistributes to its members from other poor people. Germany’s super successful Hatz reform was all about allowing more specialized unions, in order to reward industries that were performing better AND THUS INCENTIVISE PEOPLE OUT OF INEFFICIENT INDUSTRIES AND INTO MORE EFFICIENT INDUSTRIES whose workers command more power at the negotiating table.In summary, unions of course have a role to play, but they are already playing it and (much as the managers at Walmart are not exactly angels with wings and halos) this role is being diminished by the realities on the ground.And so on. The rant against Steve Cohen, for example, should also have been included in his list of red herrings, along with same-sex marriage, abortion, guns, race and religion. There’s plenty wrong with finance, but the (tens of billions of) profits from insider trading are not on my top-ten list, much as they are distasteful. There are trillions at stake here and if you get the trillions right, the billions will follow. And I get to watch the same movies and same football games as Steve Cohen, it turns out. They don't make different ones for him. I still have (marginally) more hair than him too. I avoid jail by not breaking the law, on the other hand, but I don't find that enormously burdensome and I have bigger cares than cutting him down to size.I also thought the sundry solutions involving a minimum endowment for every citizen were rather off the wall. We need to look at what it is we’re already doing and we need to fix it. There cannot be a deus ex macchina, that’s the wrong place to look.I can go on taking stars off and discussing points where I disagree rather vehemently with Reich.But I can’t get below five stars, because this is a tremendous call to arms for the American Left to come to the table to discuss the real, material issues we all face. I’m not aware of an equivalent book for the Right.

  • Ryan Boissonneault
    2019-03-01 06:04

    This is a critically important book for a few reasons.First, it exposes the meaninglessness of the “free market” vs. government intervention debate by showing that the market cannot exist in the first place without the laws, rules, contracts, and enforcement mechanisms that government creates. The relevant debate, therefore, is not “less government” or “more regulation” but who exactly stands to benefit or lose under the current arrangements.The free market simply doesn’t exist; government and business are locked in a complex relationship full of tradeoffs. But we never get to debate the tradeoffs because anything the market does is seen as fair despite the fact that we decide how the market operates. When capitalism is evaluated in this way, we see that the game is structured to favor the wealthy—leading to a concentration of wealth and political influence at the top. Reich offers a plethora of examples and statistics to demonstrate how our laws, regulations, contracts, and enforcement mechanisms disproportionately favor moneyed interests. This is all supported with statistics that clearly show a widening income gap, greater concentration of wealth in the top 1 percent, and CEO pay that has increased 930 percent since 1978—with some CEOs making 300 times the salary of the average worker. The author presents several additional examples of pre-distributions of wealth from the bottom to the top. For example, the big banks get bailed out but homeowners burdened with mortgages and students loaded with debt cannot similarly utilize bankruptcy protection to offload their own debts. I was also surprised to hear that how low the US ranks among advanced nations in the inequality of educational funding; in other words, rich kids get more money and better education while poor kids get drastically less. This is simply not the case in other parts of the world with different funding mechanisms that ensure a more equal educational experience for kids, irrespective of socioeconomic class, so as not to perpetuate poverty and class divisions. While all of this is quite depressing and often infuriating, this is not a pessimistic book. The author is optimistic about our ability to save capitalism, as he cites several historical examples of how capitalism has been tested in the past and how we were able to implement corrective policies. For example, after the Great Depression, the New Deal established greater rights and protections for workers. So how do we save capitalism from crippling inequality that reduces overall demand and consumer spending? The author mentions several ideas such as overturning the Citizens United decision, getting big money out of politics, universal basic income, maximum wages or limits on CEO pay, and reinventing the corporation as a for-benefit operation rather than as a for-profit (being accountable to all stakeholders, including employees, rather than solely to shareholders). Whether or not we take any of this advice remains to be seen.

  • David Sasaki
    2019-03-03 08:06

    It was doubly frustrating to read a book of such sensible policy analysis during an election season that is practically devoid of any discussion of real policies and their effects on real people. Saving Capitalism -- a dramatic title for a book that otherwise mostly avoids hyperbole -- begins with the premise that we must drop the typical way we frame liberalism and conservatism as big government versus small government. Ostensibly, Reich wants to appeal to both Bernie supporters and the Tea Party disenfranchised, but this is clearly a book by a progressive for progressives. He would rather us think about a government that works on behalf of the 99% -- the middle class and poor -- regardless of whether it is a very large government or a very small government. To create such a government, Reich argues, we need to reform some very basic laws that set the rules of the market -- things like bankruptcy laws, intellectual property, contracts, and financial and anti-trust regulation. Reich calls the effects of these regulations that favor the wealthiest "predistributions" -- a play on "redistributions," borrowing the term from Jacob Hacker's paper, The Institutional Foundations of Middle Class Democracy. Unlike Joseph Stiglitz and Thomas Piketty, who have focused on tax reform as the most effective way to reduce economic inequality, Reich argues that we must first set fair rules of the game that don't discriminate against the non-rich working class. If you'd like a condensed summary, Reich touches on the major points with some illustrative examples in this blog post. Our intellectual property and antitrust policies, he points out, cause Americans to "pay the highest pharmaceutical costs of any advanced nation" and to "pay more for broadband Internet, food, airline tickets, and banking services." (For a maddening overview of the current state of American monopolies, including sunglasses, cat food, plastic hangers, syringes, take a look at this 2015 American Prospect piece by David Dayen.)This is a very different argument from Reich's earlier work, which focused on the need to improve education and skills training for adult workers in order to adapt to technological change. Paul Krugman, comparing Reich's first and latest book, writes: "economists struggling to make sense of economic polarization are, increasingly, talking not about technology but about power."Saving Capitalism is enlightening with its clear re-telling of 20th century US economic history. By looking back in time, the gravity of our current economy comes alive. Sure, life is still good, but we realize that it could be so much better and that our current state will only accelerate with continuing technological displacement of middle class jobs while the wealthiest individuals and companies further their own interests through lobbying, campaign finance and tax evasion. In addition to the benefit of historical comparison, Saving Capitalism helpfully compares how the United States has decided how to regulate its market with other countries. In the US, for example, the wealthiest neighborhoods have the best schools because we mostly finance education through property tax. Other countries invest more money in schools in the poorest neighborhoods. "The bottom line is that the vast majority of O.E.C.D. countries either invest equally into every student or disproportionately more into disadvantaged students," notes Andreas Schleicher. "The U.S. is one of the few countries doing the opposite.”Reich is equally enlightening in his survey of reports from think tanks and journal articles from economists on the expected effects of the policy adjustments he proposes. By comparing our present state with our past, our peers and our potential future, it is clear what must be done.But how to get it done? Only then does the no-nonsense, fiercely intelligent Reich veer off into a fantastical world of political theory that only seems believable at a Berkeley coffee shop or a Bernie Sanders rally. Skimming the surface of John Kenneth Galbraith's notion of countervailing power, Reich proposes with a straight face that the disenfranchised on the far left and far right come together to build institutions that take on the power of the 1%. He's intentionally vague about what these institutions might look like. It could be a new political party, or a reformed party (in the way that Teddy Roosevelt reformed the Republican Party in 1901 or how FDR reformed the Democratic Party in 1933). Or it could be a resurgence of workers' unions. Or it could be some new platform connecting all gig workers to stand up to the dominant power of monopolistic firms like Uber, Task Rabbit and Etsy.Reich's call to arms for a countervailing political force seems so out of touch with the current political reality -- which has divided the country based on fear, identity and personality types -- that it's hard to take seriously. Krugman's review offers an observation that is as fundamental as it is simple and obvious:Anyone hoping for a reversal of the spiral of inequality has to answer two questions. First, what policies do you think would do the trick? Second, how would you get the political power to make those policies happen?Reich has me sold on his answers to question one. But he comes up short in his effort to tackle question two. Given Hillary Clinton's close relationships to Wall Street and the most powerful and influential of our country, I'm doubtful (as is Reich, who served as Secretary of Labor under Bill Clinton and went on a date with Hillary Clinton in college) that she is positioned to "rewrite the rules of the American economy." But a recent New York Times Magazine article highlighting the work of Felicia Wong and the Roosevelt Institute leaves me feeling more hopeful. Regardless, Reich is a model of what we need from our economists: a recognition of the importance of power in shaping policies and a recognition of policies in shaping the market.

  • Mack Hayden
    2019-02-26 05:05

    I'm skeptical of big business, big corporations, big banks *and* big government in about equal measure. Any remedy to the corporate oligarchy in which we find ourselves, in my opinion, has to recognize that ceding corporate power into the hands of an equally powerful state is playing with fire. Reich does a great job of laying out how we can critique and correct capitalism without throwing the baby out with the bath water. He thinks self-interest and innovation drives economies, incentivizing productive behavior is good, etc but also that unfettered capitalism allows the super rich to gain more and more control over the state to the detriment of the people. I went into this book a disgruntled libertarian, a former Ron Paul obsessive whose dedication to Austrian economics was on the wane, and came out further leftward than I anticipated. Reich is a great, reasonable voice for the left because he's a great, reasonable voice in general. His approach here isn't ideological but pragmatic, not based on preconceived notions of *a fair society* but on the alarming economic data and preventable inequities in our own society as they stand. He's clearheaded and fair in his assessments and, thus, just the sort of guy to know what's wrong with capitalism and how to save it.

  • Jim
    2019-03-22 03:50

    Robert Reich concisely summarizes what's been happening with capitalism in the last few decades, showing how special interests have corrupted the system, and suggesting ways to fix it. This is one of those books everyone should read before November 8th. And it's a book that explains why Bernie Sander's campaign has drawn so many supporters. Wall Street, through its influence in Congress, is tweaking the system in their favor, and thus altering the way Americans live. Reich explains why corporations have gone institutions of life-time job security to lovers of automation and haters of people. Corporations use to be about making things, now they're only about meeting shareholder expectations and enriching the elite in management.Many of the long term problems we face, the ones that keep us from creating a sustainable economy/environment, are connected to capitalism. Reich wants us to tinker with capitalism so it inherently works to solve our problems, not create them.

  • Kurtbg
    2019-03-14 05:53

    A must read for anyone interested in what has been happening in the US as the ties of business and politics have been compromised with replacing the individual vote with dollars as the coin of power in a failing democracy.The book provided a good definition of how the economy runs, how markets are created and how rules and regulations purpose is to create a fair but still rewarding system that balances power, security and fairness. When those rules and regulations are compromised and with partisanship it becomes a hot mess which leads to an imbalance of power and an erosion of democracy.He explains when these changes started, the driving forces, and the impact that it has had on the distributions of wealth, incomes, and the overall economy. I'd be happy to read any countering viewpoints suggestions you may have.

  • Joshua
    2019-03-01 03:55

    My positive view of this book is a reflection of how it altered my thinking and made me aware that there are individuals such as Mr. Reich in existence.If you have read Atlas Shrugged, Saving Capitalism will illuminate the frightful realities of "society" as portrayed in Ms. Rand's work

  • Book
    2019-03-23 07:04

    Saving Capitalism: For the Many, Not the Few by Robert B. Reich“Saving Capitalism” is an excellent look at what it will take to save capitalism. Accomplished author current Professor of Public Policy, Robert Reich provides wonderful insights on our economy and how to make it work for the many instead of the few. This outstanding 304-page book includes twenty-four chapters and is broken out by the following three parts: I. The Free Market, II. Work and Worth, and III. Countervailing Power. Positives:1. A well-researched, well-written, accessible book. 2. A very important topic in the hands of a master, saving capitalism. Reich is straightforward and simplifies complex economic topics. 3. Well-structured book. Reich in an excellent introduction prepares the reader on what the main goals of the book are by section. “My conclusion is that the only way to reverse course is for the vast majority who now lack influence over the rules of the game to become organized and unified, in order to re-establish the countervailing power that was the key to widespread prosperity five decades ago.”4. Great use of charts and diagrams that complement the excellent narrative.5. Does a wonderful job of debunking prevailing myths about the economy. “A market—any market—requires that government make and enforce the rules of the game. In most modern democracies, such rules emanate from legislatures, administrative agencies, and courts. Government doesn’t “intrude” on the “free market.” It creates the market.”6. Many words of wisdom throughout the book. “The size of government is not unimportant, but the rules for how the free market functions have far greater impact on an economy and a society.” 7. Explains the five building blocks of capitalism: property, monopoly, contract, bankruptcy and enforcement. “Private property, constraints on monopoly, contract, bankruptcy or other means for coping with default, and enforcement of such rules are essential building blocks of any market. Capitalism and free enterprise require them. But each of them can be tilted to the benefit of a few rather than the many. As noted, every one of these five building blocks depends on a large range of decisions by lawmakers, agency heads, and judges.”8. Puts freedom and power in perspective. “Those who claim to be on the side of freedom while ignoring the growing imbalance of economic and political power in America and other advanced economies are not in fact on the side of freedom. They are on the side of those with the power.”9. The book is loaded with practical examples that resonate. “Drug prices are high in America partly because, while other governments set wholesale drug prices in their countries, the law bars the U.S. government from using its considerable bargaining power to negotiate lower costs. But the bigger reason drug prices are so high in America is that drugs are patented—and those temporary monopolies often last beyond when the patents are supposed to run out (now twenty years).”10. Provides compelling evidence on why the U.S. economy has become less entrepreneurial over time. “Inside the mechanism of the “free market,” the economic and political power of the new monopolies feed off and enlarge each other.”11. The reality behind bankruptcy laws. “Bankruptcy was designed so people could start over. But these days, the only ones starting over with ease are big corporations, wealthy moguls, and Wall Street, who have had enough political clout to shape bankruptcy law to their needs.”12. How companies rig the system to reduce law enforcement. “For example, the West, Texas, chemical and fertilizer plant that exploded in April 2013, killing fourteen and injuring more than two hundred, had not been fully inspected for almost three decades. The Occupational Safety and Health Administration (OSHA) and its state partners had only 2,200 inspectors charged with protecting the safety of 130 million workers in more than eight million workplaces. That came to about one inspector for every 59,000 workers. Over the years, congressional appropriations to OSHA had dropped. The agency had been systematically hollowed out.”13. Debunking the meritocratic myth. “…increasing political and economic power at the top is related to decreasing political and economic power in the middle class.”14. The enraging hidden mechanisms that allow CEOs unfair pay. “Anyone who still believes people are paid what they’re worth is obliged to explain the soaring compensation of CEOs in America’s large corporations over the last three decades, relative to the pay of average workers—from a ratio of 20 to 1 in 1965, to 30 to 1 in 1978, 123 to 1 in 1995, 296 to 1 in 2013, and over 300 to 1 today. Overall, CEO pay climbed 937 percent between 1978 and 2013, while the pay of the typical worker rose just 10.2 percent.” “Between 1934 and 1982, the Securities and Exchange Commission regarded stock buybacks as potential vehicles for stock manipulation and fraud. It required companies to disclose the volume of their buybacks and prohibited companies from repurchasing more than 15 percent of the value of their stock on any given day. But in 1982, John Shad, the new chairman of the SEC, appointed by Ronald Reagan, removed these restrictions. Henceforth, CEOs could use buybacks to manipulate the prices of their companies’ shares. “15. Describes the root of American Inequality. “Since 1979, the nation’s productivity has risen 65 percent, but workers’ median compensation has increased by just 8 percent. Almost all the gains from growth have gone to the top.”16. Brings up important questions that need to be answered. “The question we ought to be asking, according to Harvard economist Greg Mankiw, is “How do we help people at the bottom, rather than thwart people at the top?”17. Important moral issues discussed. “Those who are rich and becoming ever more so are neither smarter nor morally superior to anyone else. They are, however, often luckier, and more privileged and more powerful. As such, their high net worth does not necessarily reflect their worth as human beings.”18. The self-centered influence of big corporations. “The influence of big corporations, Wall Street, and wealthy individuals over all these market-creating and market-enforcing decisions takes many forms: contributions to political campaigns or to groups that mount advertising campaigns for a candidate or against a politician’s opponent; revolving doors between government jobs and lucrative employment in lobbying firms or on Wall Street, or implicit offers of such jobs after government service; “think tanks” of paid experts and public relations campaigns to convince the public that a particular policy is in their interest; and squadrons of highly paid lobbyists and lawyers that engulf legislatures, administrative hearings, and the courts. Not even prosecutors and judges are immune. “19. Does a wonderful job of presenting ideas that may help countervail the forces corrupting our capitalistic economy. “Countervailing power would also seek to end the upward pre-distributions currently embedded in market rules, such as those we have examined. The lengths of patent and copyright protection would be shortened, for example, and pay-for-delay agreements banned, as they are in most other advanced economies. Patents could not be extended by means of small or cosmetic changes in products or processes, and pharmaceutical companies would be prohibited from advertising their prescription brands, as had been the rule in the United States until Big Pharma insisted otherwise. “ “One possibility would be to make corporate tax rates depend on the ratio of CEO pay to the pay of the median worker in the firm. Corporations with low ratios would pay a lower corporate tax rate, and vice versa.”20. So much more!!Negatives:1. A tad repetitive.2. No formal bibliography.In summary, this is an excellent book that covers big picture topics on how to save capitalism and make it work for the many instead of the few. Professor Reich has mastery on the topic and is an even better educator by lucidly making such complex topics accessible to the masses. I highly recommend it! Further recommendations: “Beyond Outrage” by the same author, “Protecting Capitalism Case by Case” by Eliot Spitzer, “The Great Divide” and “The Price of Inequality” by Joseph E. Stiglitz, “Winner-Take-All Politics” by Jacob S. Hacker, “The Price of Inequality” and “Globalization and its Discontents” by Joseph E. Stiglitz, “Affluence and Influence” by Martin Gilens, “Republic, Lost” by Lawrence Lessig, “The New Elite” by Dr. Jim Taylor, “ECONned” by Yves Smith, “The Great Divergence” by Timothy Noah, and “Bailout” by Neil Barofsky.

  • Todd Martin
    2019-03-06 07:05

    “Liberty produces wealth, and wealth destroys liberty.” ― Henry Demarest Lloyd, Wealth Against Commonwealth (1894)A free market is defined as - an economic system in which the prices for goods and services are set freely by consent between vendors and consumers, in which the laws and forces of supply and demand are free from any intervention by a government.Q: What do a free market and the Hansel and Gretel have in common?A: Failures of the free market coupled with a lack of social services left the woodcutter with little choice but to abandon his children in the forest to avoid starvation. Also … they are both fairy tales.There is no such thing as a free market; there never has been, nor can there ever be. It’s a bed-time story that adult Libertarians whisper to their little Libertarian children to distract them from the fact that federal government interference prevents their tiny PJs from bursting into an incendiary fireball should they step too close to the burner of a stove. Consumer protection regulations, which restrict the rights of corporations to sell highly flammable undergarments, have made these little free market fireballs a thing of the past.In fact, regulations are the very things that define a market’s existence. Markets are man-made constructs created to serve the needs of society and to reflect its priorities. We, through our representatives in government, determine what goods and services can be bought and sold, and under what terms and conditions. No one believes that fraud is acceptable, that companies should bear no responsibility for the safety of their products, that monopolies should dictate consumer choices, or that babies should be traded on the open market along with sow bellies. Government regulations and institutions exist to help ensure that these things do not.So what is it precisely that laissez-faire fundamentalists mean when they talk about the ‘free market’? They’ll tell you that their goal is ‘deregulation’, which purportedly involves removing government ‘interference’ in the market so that businesses can thrive unhindered. However, what occurs in practice is not deregulation at all, but ‘re-regulation’… a process in which the rules of the market are re-written to the advantage of one special interest or another. In other words, because markets require rules in order to exist, regulation vs deregulation is a false premise. Instead, an intellectually honest discussion of the issue would involve a debate regarding the types of regulations preferred: Those designed to benefit wealth and capital, or those that benefit the public and common good.This is the subject of Saving Capitalism: The New Rules for Shared Prosperity by Robert Reich, Secretary of Labor under President Bill Clinton and now Chancellor's Professor of Public Policy at the Goldman School of Public Policy at the UCal, Berkeley. Reich argues that the traditional economic arguments that pit free market advocates against those who argue for wealth redistribution (through higher taxes on the rich and additional government services) are missing the point. Instead, the root of the widening gap in income inequality lies within the rules that govern Property, Monopoly, Contracts, and Bankruptcy, as well as how these rules are Enforced. Through small changes in regulation over time big businesses and the donor class have been able to skew the rules that govern our economy in their favor, disproportionately increasing their share of the economic pie.Thus US citizens, who pay more for prescription drugs than those in other parts of the world, cannot purchase identical prescription drugs from Canada despite the fact that they are cheaper.Thus the bankruptcy rules that allow businesses to clear their books of debt, invalidate collective bargaining agreements and cancel employee pension obligations do not apply to students attempting to free themselves from the burden of college loans.Thus a family making $100k per year pays 28% of their gross earnings in income taxes each year while many fortune 500 companies pay no federal taxes whatsoever on their multi-billion dollar earnings.Thus banks who nearly brought down the global economy through the abuse of high risk, complex financial products received government bailouts, while home owners faced with balloon payments on mortgages that are now underwater received eviction notices.It isn’t an accident that incomes of the middle class have stagnated, that the minimum wage is insufficient to raise a person from poverty, that union membership is waning, that we live in a gilded age where the richest 0.1% control as much wealth as the bottom 90%. It’s the inevitable consequence of an economic system whose rules have been systematically rigged to favor the wealthy. And given that wealth begets political influence begets yet more wealth and influence, it’s difficult to see how this vicious cycle can be broken. Particularly given that “The preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy.” [study published by Martin Gilens and Benjamin Page of Northwestern University in 2014].Reich acknowledges that other economic factors are at work here including globalization, which has seen manufacturing jobs shipped overseas where labor is cheaper, and technology, which has automated many jobs that were previously done by humans. But concludes that these factors, while not trivial, are insufficient to explain disparity in wealth (which has not been as wide since the Great Depression).So … what’s the solution? Reich floats several ideas, but I’ll highlight two. First we need to get money out of politics. It is the number one problem facing the country at the moment, because no other problem can be solved until this one is fixed. If you have any doubt that this is the case please watch the following TED talk by Lawrence Lessig:, Reich notes that robots, software and automation will eventually replace much that humans do in the workforce (in case you haven’t noticed, this is already underway). Under the current economic structure, those who own the means of production will own all the wealth, while those whose jobs have been eliminated will own nothing. To resolve this unsustainable situation Reich proposes a universal wage such that all citizens will receive a guaranteed fixed salary for life upon turning 18. The amount would be enough to live off of (though not lavishly) and individuals could get jobs to supplement this income if they wish. It would also provide the freedom to allow people to pursue their passions rather than a paycheck if so inclined, spurring a Renaissance of music, the creative arts, civic engagement and volunteerism. Reich is hopeful that these are problems that humans are capable of solving. However, I am not quite so optimistic. Given the mentality of a large number of citizens in the country who find the bilious blathering of leading republican candidates to be compelling, I predict that things are going to get a lot worse before (or if) they begin to get better.

  • Ryan Taylor
    2019-02-22 01:55

    I don't particularly think that capitalism needs to or should be saved. However, if you truly value capitalism and believe it is the economic vehicle we should all be riding in, please read Robert Reich’s Saving Capitalism: For the Many, Not the Few. His analysis of the current state of capitalism in the United States specifically and the world at large and how we got here is spot on. If you consider yourself a capitalist, you should find little to disagree with Reich on. If you are a capitalist and disagree with Reich, you must be an anarchist or totally self-serving. It’s OK to be either of those types of capitalists; just don’t pretend you are otherwise. If you are neither an anarchist nor a totally self-serving capitalist and still disagree with Reich, I am sorry to say you have been duped and have little understanding of the forces underpinning our lives. If we continue down the current path of economic inequality, the words of JFK will come back to haunt us: “Those who make peaceful revolution impossible will make violent revolution inevitable.”

  • Anita Ashland
    2019-03-05 08:04

    This is an excellent analysis of why the rich get richer and the poor get poorer. This sums it up well:"The critical debate for the future is not about the size of the government; it is about whom government is for. The central choice is not between the "free market" and government; it is between a market organized for broadly based prosperity and on designed to deliver almost all the gains to a few at the top. The pertinent issue is not how much is to be taxed away from the wealthy and redistributed to those who are not; it is how to design the rules of the market so that the economy generates what most people would consider a fair distribution on its own, without necessitating large redistributions after the fact."

  • Nick Traynor
    2019-02-25 07:50

    Well-reasoned and argued, Reich exposes several sophistries of modern political debate, from the so-called free market to size of government and the much-heralded failure of capitalism. Although the text is quite repetitive, I enjoyed Reich’s narrative, which painted a bleak portrait of trends in Western economics. Reich did present possible solutions to our woes, including a stunning smackdown of clickivism/slacktivism, although the deep political divides that must be bridged in order to achieve such countervailing political power is the obvious and daunting barrier to any meaningful progress.

  • Trudy Brasure
    2019-02-27 00:49

    This book should be widely read. The introduction alone has forever changed my perspective of the term "free market."Reich explains with graphs, facts, and figures how our economy has evolved into the current state of gross inequality. The latter part of the book suggests what needs to be done to level the playing field and restore a balance of power to average working Americans.My favorite chapters: -- Chapter 10 on the myth of meritocracy touched on all the factors that tip the pay scale unevenly. -- Chapter 11 on the hidden pay mechanism of CEOs was a shocking look into the immoral power/money game played by an elite minority -- at the expense of the rest of the nation and the world.This book should be read by thinking people across the political and economic spectrum.