Book Review: Supercapitalism
Robert Reich has written an unusually insightful book about the co-evolution of US corporations and the American government in the last sixty years. Its subtitle encapsulates this story as “The Transformation of Business, Democracy, and Everyday Life.” His last chapter starts with a reprise of his argument: Supercapitalism has triumphed as power has shifted to consumers and investors. They now have more choice than ever before, and can switch ever more easily to better deals. And competition among companies to lure and keep them continues to intensify. This means better and cheaper products, and higher returns. Yet as supercapitalism has triumphed, its negative social consequences have also loomed larger. These include widening inequality as most gains from economic growth go to the very top, reduced job security, instability of or loss of community, environmental degradation, violations of human rights abroad, and a plethora of products and services pandering to our basest desires. These consequences are larger in the United States than in other advanced economies because Americas has moved deeper into supercapitalism. Other economies, following closely behind, have begun to experience many of the same things.
Democracy is the appropriate vehicle for responding to such social consequences. That’s where citizen values are supposed to be expressed, where choices are supposed to be made between what we want for ourselves as consumers and investors, and what we want to achieve together. But the same competition that has fueled supercapitalism has spilled over into the political process. Large companies have hired platoons of lobbyists, lawyers, experts, and public relations specialists, and devoted more and more money to electoral campaigns. The result has been to drown out voices and values of citizens. As all of this has transpired, the old institutions through which citizen values had been expressed in the Not Quite Golden Past [roughly from 1945 to 1970] –industry-wide labor unions, local citizen-based groups, “corporate statesmen” responding to all stakeholders, and regulatory agencies– have been largely blown away by the gusts of supercapitalism.
Reich argues that the trend toward supercapitalism started with technological changes that lowered the cost of global transportation, such as cargo containers on container ships, super railways and highways, and the cost of global communication, the Internet that connected low-cost computers. The globalization that followed led to hyper-competition within industries and even between them, as industry boundaries fell, products proliferated and the bigger firms reached for international supply chains and worldwide customers. This has been great for the consumer and the investor part of us, but is has not been good for the citizen part of us that wants social justice, quality education, affordable healthcare and clean environments for all. He does not blame corporate leaders for putting enough money into the Washington scene to dominate the political process. They feel forced to do it to maintain their competitive position in a game where, if one is not a big winner, one will be a big loser. In RD terms, this game puts so much pressure on one’s drives to acquire and defend that it overrides one’s drive to bond with the wider community.
Reich has done a better job of describing these events than he has in prescribing cures. He provides a sample of promising reform policies for federal legislation but he despairs of getting them enacted. He wishes there was a way to get corporate money out of Washington but sees only hopelessly weak efforts to date. He seems totally unaware of the method we described in Chapter 11 of Being Human for the public funding of all federal elections to a fully-competitive level, the ‘Just $6’ approach. He does make it very clear, however, what a great blessing some such system would be for the public. It could restore the balance in Washington between all four drives that the founders intended (see Chapter 8 of Being Human). He does see that even corporate leaders could welcome regulations that gave all competitors a level playing field, so they could save all the money they now feel forced to send in Washington’s direction. With ‘Just $6” in place regulators could be expected to establish the general rule the all corporations would be expected, as the economists say, to ‘internalize’ all the costs they generate instead of ‘externalizing’ them, as they do now, to their human and natural environment. Such rules would not need to stop economic progress, but the pace would be moderated to enable comparable progress on our widely-shared goals.
Posted on: Sunday, February 3, 2008 - Tags: Book Review, Drive to Acquire, Drive to Defend.
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Hi, Paul,
When I inquired about your health, Anne told me about your website and that you welcome responses. This time, I’m not respondng to your review of Reich’s book so much as I am simply saying hello. I’ve looked over the information you provide for website visitors but haven’t yet gone to all the possible links. It’s wonderful that you’ve posted so much of your recent work based on the natural sciences. As you know, you and I share many of these same views and want others to adopt them as they analyze business and organizational behavior. As a way of spreading the word, I have been posting announcements on various listservs, such as SBE, SIM, and IABS, when I have posted new reviews to my own website. That gets the attention of lots of people and increases the chances that at least some people will get around to reading the reviews; and I’ve received some thoughtful responses. If you’re not already doing that, you might want to try it as a way of increasing traffic on your website.
Someone else who is writing a book based on evolutionary biology is Paul Herr, whom I told you about earlier. His ideas are closely related to yours; and I believe that he has been in touch with you about his forthcoming book and consultancy work.
I’m pretty busy these days reading manuscripts for journal editors and others whom I have come to know via e-mail.
When you have time, please send me a note, for I would like us to stay in touch.
Best wishes,
Bill
February 7th, 2008 at 3:22 pm