Saving Capitalism

Truth be told, I wrote a number of different reviews for Saving Capitalism. I actually finished the book over a month ago, but I’ve been struggling to contextualize what I want to say about it.

I won’t bore you with the specifics of my prior efforts, but ultimately, I decided I was overcomplicating it. I’m not sure why. It’s fairly straightforward. You either agree with Reich or you don’t, and much of that decision will be based on partisan lines. He’s a liberal democrat and if you’re not, this one probably isn’t your cup of tea. 

I’ll be very open with where I stand. I agree with Robert Reich, but I’ll note that this book and his ideas were not the sole influencers of my opinions. I was well aware of the issues he surfaces in Saving Capitalism before I read it, but the book did help fill in some specific details for me. Specifically, policy decisions that added context to how we arrived at where we are now. And yes, I’ll fully concede that this book is ten years old, but it still has relevance. The gap in Income Inequality has only widened since Saving Capitalism was originally published in 2015. For me, that’s a pretty clear endorsement that Reich’s arguments were, and still are, on point. 

It’s necessary to take this book for what it is. Saving Capitalism is a simplified synopsis of a more complex economic theory. I do not doubt that given the appetite, Reich could delve more deeply into the intricacies of how he arrived at his conclusions, but that would read more like a textbook and likely triple the length. The goal here is to make the content approachable and digestible. I believe Reich accomplished that and those claiming the book lacks specifics are missing the point.

Again, you either agree with him or you don’t, but in a nutshell, Reich claims that Income Inequality in the United States has been caused by a slow manipulation of the government by the top earners in the country. Over time, they have utilized their wealth, influence, and power to create policies that are advantageous to their success, while also using that same influence to deregulate existing restrictions that hamper their ability to generate profit. According to Reich, this effort was not some mass collusion or a conspiracy by the wealthy. It was due largely in part to a paradigm shift in how CEOs approached profit maximization and allocation. That shift has slowly caused the wealth imbalance we currently face and it will not be resolved until we reinstate regulation and enforcement to ensure a more level economic playing field.

I’ll ask for some latitude with the above synopsis. It’s very simplified, but I’ve intentionally kept it short because I don’t think any of us agreeing or not agreeing on the fine details of Reich’s theory is even relevant. Whether you agree with him or not, it doesn’t matter, because, at the end of the day, the numbers don’t lie. The economic imbalance in this country is so lopsided that you can't ignore it. The top 10% of the population cannot own the majority of the wealth. From an economic standpoint, it’s simply not sustainable. 

So, what do we do to correct it? I wish I had a specific answer for that, but I don’t. The recent election makes it even harder for me to think of one. We’ve elected a billionaire as President, so the complaints of impacted people on the left and the right shouting about the ills of “Crony Capitalism” and skyrocketing inflation and cost of living fall pretty deaf on my ears. We’re only exasperating the problem if we elect individuals who clearly benefit from the problem.

What I will say is that I think we have a morality problem more than we have an economic problem. One excerpt from the book stood out to me. On page 150, Reich claims:

“I am not accusing the wealthy of doing anything nefarious or intentionally harmful. There is no reason to suppose that top corporate executives, the successes of Wall Street, and other “high-worth” individuals have conspired to hijack the American economy for themselves. Each has merely behaved rationally in pursuit of his or her own private interests. As their wealth has increased, so has their political power, and they have quite naturally used that power to enlarge and entrench their wealth. We can criticize them for being selfish and greedy, but they are no more selfish or greedy than are most other people. And some have been enormously generous with their wealth.”

Now, I’m not saying I’m perfect. None of us are and I would agree that human nature is often to act in one’s self-interest. We look out for ourselves more often than not, but even so, choosing to serve our own interests does not exempt us from responsibility when our choice causes others to suffer, especially when it is calculated and intentional.

Despite what some at the top want you to believe, Income Inequality is more than a solvable problem. Better pay, better benefits, lower prices, and fair and honest practices are not impossible feats. These are more than achievable, but somewhere along the line, those that would benefit most from their demise deemed those principles inefficient and not cost-effective. That was an immorally rational decision. It was also intentional, and I for one think we as employees and consumers need to consistently remember that fact when we look for work, shop for goods, or step into the voting booth. How we allocate our resources can make a difference and that feels like the most approachable starting point.

And, like it or not, there is a standard cost of living that people need to reach or overcome to be happy and productive in society. It differs depending on where you live based on the costs of goods and services, but regardless, too many Americans are falling well short of that number. Big business has a direct hand in that equation. They set the salaries that are subsequently used to purchase the goods that they produce, and right now, what’s coming into consumers' bank accounts is far less than what it takes to support a healthy economy. 

If you read Saving Capitalism and don’t agree with Reich, or with me, then propose an alternative. I’m all ears.

Until then, remember that more than money is being sucked out of our collective wallets. Empathy, cooperation, kindness, and compassion have taken a hit as well. It’s hard to be tolerant when you feel like your back is against the wall. I get that, but take a second to look at who’s standing against the wall next to you, rather than who’s holding you against it. You have more in common with your neighbor than you think. We can only break free if we collectively push.