Do I want to save capitalism?

While reading Robert Reich’s SAVING CAPITALISM

Have discovered over recent months and via The Guardian and other publications, one Robert Reich. Reich is ‘an American professor, author, lawyer, and political commentator’ who ‘worked in the administrations of Presidents Gerald Ford and Jimmy Carter, and served as Secretary of Labor from 1993 to 1997 in the cabinet of President Bill Clinton…’ (Good old Wikipedia told me this.)

I agree with many of Reich’s perspectives. In fact, back in 2014 I wrote a book called The Beguiling Sins of Industrial Capitalism that Mr. Reich could well have ghost written. Anyone who might have read my book would see that I like Robert Reich’s take on the world. 10 days ago, or thereabouts – via meandering pathways – I came to purchase Saving Capitalism [subtitled ‘for the many, not the few’]. Now, 5 chapters in, I am wondering if I agree with him that capitalism is worth saving. Saveable, even?

I am not a fan of Marx or Engels (or any of the variations thereof) but it occurs to me that capitalism may well be playing its end game and may not be salvageable. I wonder if Karl Marx is smiling somewhere.

At the end of my text is a copy of my notes on the book so far. Wade through them all if you want to but for now let me just draw attention to one or two.

Highlight – The Prevailing View > Page 5

As the economic historian Karl Polanyi recognized, those who argue for “less government” are really arguing for a different government—often one that favors them or their patrons.

Note – He makes a good point.

Highlight -The Prevailing View > Page 6

The “free market” is a myth that prevents us from examining these rule changes and asking whom they serve. The myth is therefore highly useful to those who do not wish such an examination to be undertaken. It is no accident that those with disproportionate influence over these rules, who are the largest beneficiaries of how the rules have been designed and adapted, are also among the most vehement supporters of the “free market” and the most ardent advocates of the relative superiority of the market over government.

Note – 1. The Prevailing View > Page 6

True.

Highlight (yellow) – 1. The Prevailing View > Page 7

That was before the advent of complex mortgages, consumer agreements, franchise systems, and employment contracts, all of whose terms are now largely dictated by one party.

Note – 1. The Prevailing View > Page 7

As with enterprise agreements with workers – the worker, unless unionised, is essentially impotent in most cases. The party that determines who gets what is big business.

Industrial capitalism’s sins, this text will argue, relate to its excesses of exploitation, resource depletion and environmental degradation; these have threatened and still threaten the world’s security, peace, and long term habitability. The fact that to some, perhaps to many, they are not sins, not indeed failings but strengths, is why industrial capitalism’s sins are so beautifully beguiling.

The Beguiling Sins of Industrial Capitalism [from the blurb]

‘Saving Capitalism: For The Many, Not The Few’

Citation (MLA): Reich, Robert. Saving Capitalism: For The Many, Not The Few. Icon Books, 2016. Kindle file.


Preface to the British edition

Highlight (yellow) – Location 124

Markets do not exist without rules.

Note – Location 124

That’s precisely where the neoliberalists will take umbrage with Reich. They see regulation as anathema because the invisible hand has god like power. Any attempt at ruling the market is counter productive.

Highlight (yellow) – Location 130

Political economies that bestow most gains on small groups at the top are inherently unstable.

Note – Location 131

Just ask the 3rd Reich.

Introduction

Highlight (yellow) – Location 160

My solution— and I’m hardly alone in suggesting this— has been an activist government that raises taxes on the wealthy, invests the proceeds in excellent schools and other means people need to get ahead, and redistributes to the needy. These recommendations have been vigorously opposed by those who believe the economy will function better for everyone if government is smaller and if taxes and redistributions are curtailed.

Note – Location 163

Close to my soluton too.

Highlight (yellow) – Location 170

Many of the most vocal proponents of the “free market”— including executives of large corporations and their ubiquitous lawyers and lobbyists, denizens of Wall Street and their political lackeys, and numerous multimillionaires and billionaires— have for many years been actively reorganizing the market for their own benefit and would prefer these issues not be examined.

Highlight (yellow) – Location 189

The simultaneous rise of both the working poor and non- working rich offers further

Highlight (yellow) – Location 189

evidence that earnings no longer correlate with effort.

Highlight (yellow) – Location 192

As I elaborate in Part III, the solution is not to create more or less government. The problem is not the size of government but whom the government is for.

Note – Location 193

It’s for all, surely.

Highlight (yellow) – Location 193

remedy is for the vast majority to regain influence over how the market is organized.

Highlight (yellow) – Location 208

History provides some direction as well as some comfort,

Highlight (yellow) – Location 222

Time and again we have saved capitalism from its own excesses. I am confident we will do so again. [My bold highlighting]

Note – Location 223

I’m not sure that Reich’s confidence is warranted. I shall read on and wait to be, if not convinced then at least less likely to condemn CAPITALISM for its endless capacity to sin.

Part I: The Free Market

Highlight (yellow) – 1. The Prevailing View > Page 3

Few ideas have more profoundly poisoned the minds of more people than the notion of a “free market” existing somewhere in the universe, into which government

Note – 1. The Prevailing View > Page 3

Oh yes indeed. The poisonous notion of free markets wondrously doing good via the agency of THE INVISIBLE HAND.

Highlight (yellow) – 1. The Prevailing View > Page 4

Although market imperfections such as pollution or unsafe workplaces, or the need for public goods such as basic research or even aid to the poor, may require the government to intervene on occasion, these instances are exceptions to the general rule that the market knows best.

Note – 1. The Prevailing View > Page 4

And boy, wasn’t the rise of SARS Covid 2 a real wake up call re the ultimate futility of ‘the market knows best.’

Highlight (yellow) – 1. The Prevailing View > Page 4

One’s response to it typically depends on which you trust most (or the least): the government or the “free market.”

Note – 1. The Prevailing View > Page 4

True.

Highlight (yellow) – 1. The Prevailing View > Page 4

There can be no “free market” without government.

Note – 1. The Prevailing View > Page 4

A key argument

Highlight (yellow) – 1. The Prevailing View > Page 4

Civilization, by contrast, is defined by rules; rules create markets, and governments generate the rules.

Note – 1. The Prevailing View > Page 4

This is why the market – allegedly free- cannot exist without government.

Highlight (yellow) – 1. The Prevailing View > Page 5

As the economic historian Karl Polanyi recognized, those who argue for “less government” are really arguing for a different government—often one that favors them or their patrons.1

Note – 1. The Prevailing View > Page 5

He makes a good point.

Highlight (yellow) – 1. The Prevailing View > Page 6

The “free market” is a myth that prevents us from examining these rule changes and asking whom they serve. The myth is therefore highly useful to those who do not wish such an examination to be undertaken. It is no accident that those with disproportionate influence over these rules, who are the largest beneficiaries of how the rules have been designed and adapted, are also among the most vehement supporters of the “free market” and the most ardent advocates of the relative superiority of the market over government.

Note – 1. The Prevailing View > Page 6

True.

Highlight (yellow) – 1. The Prevailing View > Page 7

That was before the advent of complex mortgages, consumer agreements, franchise systems, and employment contracts, all of whose terms are now largely dictated by one party.

Note – 1. The Prevailing View > Page 7

As with enterprise agreements with workers – the worker, unless unionised, is essentially impotent in most cases.

Highlight (yellow) – 1. The Prevailing View > Page 7

one based on reciprocity and redistribution to one based on utility and self-interest.

Note – 1. The Prevailing View > Page 7

In short, to one where homo economicus overwhelmed homo sapiens.

Highlight (yellow) – 2. The Five Building Blocks of Capitalism > Page 10

But if a democracy is failing (or never functioned to begin with), the rules might instead enhance the wealth of a comparative few at the top while keeping almost everyone else relatively poor and economically insecure. Those with sufficient power and resources would have enough influence over politicians, regulatory heads, and judges to ensure that the “free market” worked mostly on their behalf.

Note – 2. The Five Building Blocks of Capitalism > Page 10

This sounds like a description of many a modern democracy: the USA,Britain Australia…

Bookmark – 3. Freedom and Power > Page 11

Highlight (yellow) – 3. Freedom and Power > Page 11

The invisible hand of the marketplace is connected to a wealthy and muscular arm.

Note – 3. Freedom and Power > Page 11

Ah, the fraudulent invisible hand gets a mention.

Highlight (yellow) – 3. Freedom and Power > Page 11

They champion “free enterprise” and equate the “free market” with liberty while quietly altering the rules of the game to their own advantage. They extol freedom without acknowledging the growing imbalance of power in our society that’s eroding the freedoms of most people.

Highlight (yellow) – 3. Freedom and Power > Page 12

In Carter v. Carter Coal Company (1936), the court’s majority ruled that collective bargaining was “an intolerable and unconstitutional interference with personal liberty and private property …

Note – 3. Freedom and Power > Page 12

Good lord… this is essentially an outlawing of unions.

Highlight (yellow) – 3. Freedom and Power > Page 12

Carter was subsequently overruled, but the ideology behind it lives on.

Note – 3. Freedom and Power > Page 12

Good… this absurd anti union law was voted down.

Highlight (yellow) – 3. Freedom and Power > Page 13

Under these circumstances, arguments based on the alleged superiority of the “free market,”“free enterprise,”“freedom of contract,”“free trade,” or even “free speech” warrant a degree of skepticism. The pertinent question is: Whose freedom?

Note – 3. Freedom and Power > Page 13

Yes indeed.

Highlight (yellow) – 3. Freedom and Power > Page 13

“Free enterprises” designed to maximize shareholder returns have been known to harm the environment, endanger the health and safety of consumers and others, and defraud investors. Even when such actions are illegal, some corporations have chosen to defy the law when the risks and costs of getting caught are less than the profits to be made. The list of enterprises that in recent years have made such a calculation, wittingly or unwittingly—including BP, Halliburton, Citigroup, and General Motors—makes clear that corporate power will infringe on individual liberties if the potential financial returns are sufficiently high.

Note – 3. Freedom and Power > Page 14

Damning!

Highlight (yellow) – 4. The New Property > Page 16

Private property is the most basic building block of free-market capitalism. In the conventional debate it’s contrasted with government ownership, or socialism. What is left out of that debate are the myriad ways government organizes and enforces property rights and who has the most influence over those decisions.

Note – 4. The New Property > Page 16

Good point, particularly the concluding chapter.

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