Many writers have thrown their hat in the ring in the past few years to give capitalism's future a prognosis, with titles such as The Future of Capitalism Paul Collier, Can American Capitalism Survive? by Steven Perlstein, The Corruption of Capitalism by Guy Standing, The Myth of Capitalism by Jonathan Tepper, How Will Capitalism End by Wolfgang Streeck, Four Futures: Life After Capitalism by Peter Frase, and Saving Capitalism by Robert Reich.
It's interesting and a definitional issue that so many big thinkers seem to need to ponder the question of capitalism's longevity.
It also illuminates that, in its current form (or under its current definition), some find capitalism conceptually compromised to the point of crisis.
Former Labor Secretary Robert Reich has notes on this. "The central political debate in American politics (and in much of the rest of the capitalist world) has been over the choice between the 'free market' and 'government.' Those on the political right have argued for more market and less government, which normally means lower taxes and less public spending. Those on the political left have wanted more government and less market, which typically has meant higher taxes (at least on the wealthy) and more public services. This debate hides a larger reality: the necessary role of government in designing, organizing, and enforcing the market to begin with. "
If anything threatens to constrain free-market capitalism, the right argues that it is socialism. They've argued it so loudly, and so frequently, that every year the number of youth having a positive view of socialism and a less favorable view of capitalism grows. This false dichotomy between unfettered capitalism and socialism ignores both history and basic term definitions, but is framing the debate nonetheless.
Reich notes that the false debate between government and free market "obscures the myriad choices facing legislators, administrators, and judges in carrying out this basic task," of market determination.
He continues, "by ignoring these underlying choices, the old debate over ‘free market’ versus 'government' diverts attention from how these decisions are made and hides the growing influence of large corporations, Wall Street, and wealthy individuals over them."
In other words, this false dichotomy is a convenient tactic. By limiting the conversation to free market vs government, and ignoring the choices which shape the contours of the market, talking heads distract people from the fact that decision makers and the power elite are the ones determining the rules and functioning of the economy, and this repetition "conveniently remove(s)" these influencers from the equation.
The underlying message? Ask not to whom the invisible hand belongs, it belongs to no-one, certainly not to me.
Reich explores five key areas in which policy decisions about the market have created explosive wealth inequality in America: property law, anti-trust law, contract law, bankruptcy law, and the methods of enforcement (or non-enforcement) against those who break the rules.
He is also interested in disappearance of the middle class and the rise of a permanent oligarchy, and the other supporting factors which make it all possible: the myth of the meritocracy, the decline of bargaining power in employment for the middle class, the exorbitant wages for CEOs and Wall Street, and the concurrent rise of the nonworking rich and the working poor.
He also explores the decline of "countervailing power" – as he calls the organizations he believes kept the political system balanced against corporations and the monied elite. America was once a nation of "joiners" that belonged to civic and community organizations, neighborhood improvement groups, political clubs, Farm Bureaus and chambers of commerce; but somewhere along the way we stopped being so. (Wokefully he notes that as wages have shrunk many people have had to work more to make ends meet, with less time for community involvement.) These groups exerted soft-power over elected officials, and in their absence, the vacuum has been filled by those using money to gain influence.
He warns there is no way we can maintain American democracy while the vast majority of voices continue to be ignored, prophesying that a political reorganization may well occur around establishment vs. anti-establishment economic policy.
Yet, he is hopeful about the future of capitalism, arguing like Winston Churchill that you can always trust America to do the right thing -- after it's tried and failed at everything else. He believes that historically Americans choose pragmatism over ideology, and that in times of crisis caused by capitalism, we have rolled up our sleeves and fixed it, rather than fall to fascism or communism.
He writes, "the larger cause for optimism is that we need not be victims of impersonal ‘market forces' over which we have no control. The market is a human creation. It is based on rules that human beings devise. The central question is who shapes those rules and for what purpose."
In a political environment where conversation is rather surface, Saving Capitalism is relevant as ever in looking at the actual policies that are distributing gains upward and where we can address the making of a more fair society.