SuperCapitalism – A Liberal View of the 20th Century

Posted: April 3rd, 2008 by: h2

The Transformation of Business, Democracy, and Everyday Life
Author: Robert B. Reich
Publisher: Alfred A. Knopf, 2007

It was hard to not pick this book up, it’s by the former secretary of labor Robert Reich. I like seeing how people in the system think about things, although I have to admit I’ve been avoiding the more classical liberal material, since there’s so much stuff that’s even more critical of the current system coming from what used to be called the ‘right’, but which now is starting to sound almost sane. Books like Conservatives Without Conscience, by John Dean, come to mind, for example.

Although the preface almost made my put the book down since it wasn’t very promising, with some pretty serious distortions of our currrent realities, like pretending that our media isn’t dominated by 5 large conglomerates, once the book actually started, it got increasingly more interesting, although sadly it also becomes increasingly more obvious why the Democratic party has so little of substance to say. Reich, as a party insider, shows us just what the Democratic party is missing today: a sense of outrage, coupled with a willingness to fundamentally question the status quo.

Some of the real eye openers were the degree to which the pre 1970s system managed to reasonably distribute the wealth, pointing out that for instance, under Eisenhower, the top tax rates were 91%, and under JF Kennedy, still up at 78%, and that the top 1% of income earners took only 7% of total income in 1950, compared to 19% in 1928 (pg. 37).

Hopefully you may have noticed that the percentages were higher right before the Great Depression hit, just like it is now. And that’s not a coincidence, when you don’t distribute the wealth, but hoard it, and become increasingly greedy, there is less flowing out into the system.

I won’t give a statistic by statistic breakdown of all the numbers, but as I work my way through the book, I’ll try to point out the more salient points.

Another things that immediately struck me was Reich’s immediate rejection of the notion that the so called Free Market had anything at all to do with the prosperity the USA enjoyed post WWII. Rather, he shows quite clearly that was existed was a fairly tightly controlled system of oligarchical industrial production, where a few corporations more or less completely dominated each major sector of the economy, working hand in hand with large unions and the government.

This is very important to understand, since the free market is one of the most abiding myths of the United States, and it certainly has almost no foundation in reality. Even today, if you look at some more modern versions of industrial enterprise, say computer operating systems or search engines, again, you find a small handful of companies completely dominating the market, with the bar to entry raised increasingly high to anyone who would like to compete in an actually free market.

No, the free market remains a myth, followed mostly by people who haven’t ever studied the real market, or who actually believe that the legal fiction of corporate person-hood is real, thus imputing the concept of free agents acting in a free market when discussing say General Motors competing with Toyota or Hyundai, as if these three megacorporations have anything to do with open and free competition between free individuals. In fact, the failure to grasp the problems with allowing legal fictions the same rights as physical, real people, is one of the core points of this book.

Long ago, in college, I had a political science teacher who pushed this point over and over. I didn’t really register why he thought this was so important, but as I see how entities that are essentially non-existent except for some legal paperwork then hide behind laws that were explicitly created to protect real people, who could be jailed, or even killed, if their violation were serious enough, I begin to understand just what a serious mistake allowing corporations to assume the protections due to living people while avoiding the consequences living people have to also accept when they mess up too badly.

The attempt to use legal person-hood to excuse bribery (aka ‘campaign contributions’), massive theft (for example Enron recently, although currently the number of corporations engaged in this type of cynical manipulation of their sphere of interest is growing disturbingly large), is just one clear example of just why this legal status has to be removed as soon as possible if human society is going to make it past the peaks we are fast coming up on, or have already passed by as I write now.

I had the great good fortune to live in Spain for a while, where I got to see what an actually free market looks like, in the form of the many public food markets they have there. The people who own the food stalls are not trying to take control over the entire market, they have small stalls, and might, if they are particularly good, or popular, expand to a few stalls over time. But that’s about it. And price, from what I found, was not the primary concern of either shopkeepers or shop visitors, it was a wide range of things, from quality, liking the shopkeepers, tradition (your mother shopped there), and so on. Seeing a real free market, where I was, as a consumer, free to buy VERY high quality foods and very good prices, and fresh, real foods, not processed junk, food which often was being sold directly from producer, or farmer, to the shop.

Such a genuine free market offered everyone quality, and a way to have a good life, with position and status, from the smallest grower/producer, to tiny little shops selling say only eggs, or pre cooked beans, for example, to fairly large, well stocked stalls.

You can find such genuine free markets anywhere in the world where corporations have not yet managed to destroy them, and the difference is striking, mainly because you are dealing with truly free producers, consumers, and shopkeepers, not fake legal fictions of paper corporate persons. Such truly free markets also have a minimum of large scale middlemen to get in the way. So all the money stays local, stays in people’s hands. Like our farmer’s markets here, only a bit more natural.

Comments are closed.