ideas inspiration reading

Current Reading: Saving Capitalism

Book: Saving Capitalism: For the Many, Not the Few by Robert Reich.
Book: Saving Capitalism: For the Many, Not the Few by Robert Reich.

I follow economist Robert Reich on Facebook and appreciate the way he explains complicated financial topics. When he announced that his new book, “Saving Capitalism: For the Many, Not the Few”, was due to be released, I pre-ordered it from the library. When it arrived, I gobbled it up because Reich once again delivered complex subjects in his easy-to-understand style. The overall premise of the book, which should be obvious to anyone paying attention, is the growing gap between the poor and the rich. He focuses on the problem in the United States, but says it is being seen worldwide as well.

Perhaps the most important point Reich makes comes at the very beginning of the book. In Chapter 1, he discusses what he sees as a false dichotomy being perpetuated in society … that of the “free market” being at odds with government. In the popular view, either you are for the free market or you are for the government. Those who are for the free market think that government is out to squash the market. Those who look askance at the free market hope that the government will rein it in.

Reich says, “But the prevailing view, as well as the debate it has spawned, is utterly false. There can be no “free market” without government. The “free market” does not exist in the wilds beyond the reach of civilization. Competition in the wild is a contest for survival in which the largest and strongest typically win. Civilization, by contrast, is defined by rules; rules create markets, and governments generate rules.” (pg. 4, Saving Capitalism)

In discussing this point with my husband Erik, he said that if people want a truly free market, there would be only two rules: 1. Buyer beware; and 2. Seller beware.

A market that is truly free would allow sellers to sell whatever they want with no protections for the buyers whatsoever. Want toys that are lead-free for your children? Tough luck! Safe food? Nope! Some guarantee that chemicals won’t be dumped next to your house? Ha! Nuts to you!

Sellers would have no protections from larger companies intent on crushing the competition or from customers making spurious claims. They would also have no rights related to patenting or copyrighting their intellectual property.

Forget any kind of rights for workers, too. Companies could pay as little as they wanted and keep people in servitude and there wouldn’t be a darn thing you could say because, hey, it’s the free market, baby! Let’s live on the wild side and hang out with anarchy! What’s anarchy without violence? You want a free market with no government, just think about all those apocalyptic movies with their dystopian futures. There’s your wish, writ large on a big screen.

After Reich makes his point that government is what creates the market, he uses the rest of the book to explain how the American government has shifted over time to benefit the wealthy few over the many, the rights of corporations over individuals. Things have become so skewed that our government, and hence our market, no longer is run for the benefit of the majority of citizens. Instead, it serves the interests of the few, those who have accumulated money and power through shifts in how the market rules have been written.

Reich also provides ideas for how to move the government back to serving the majority, so the book ends on an upbeat note. (The quick answer is that we need to create a countervailing power (like unions used to provide) to fight for the rights of the middle and lower-classes so we don’t get steam-rolled by the wealthy.)

I highly recommend this book (in case you hadn’t noticed!).