Book Review: 'Supercapitalism: The Transformation of Business, Democracy, and Everyday Life' by Robert Reich
Review by Don Mikulecky
As a systems scientist, I find Robert Reich's book Supercapitalism: The transformation of Business, Democracy, and Everyday Life very interesting. Even if you disagree with the details of his analysis, the underlying, almost invisible thread is the systems nature of country's problems. Systems are the antithesis of the mechanistic models used in so many fields today including science. What Reich does in his book is to pin down the cause of the problems we are facing in America as an overpowering of democracy by a systematic preoccupation of government with the demands of the new supercapitalism that has arisen since the early 1970s. Where did this systematic change come from? Who instigated it? Come look below the fold and see what Reich has to say and why I see it as a classical problem in systems theory.
As in any systems model, the causes of what happened are not simple, direct causes but are complex, interacting networks that do follow some clearly identifiable principles. What are these principles? According to Reich:
Supercapitalism has triumphed as power has shifted to consumers and investors. They now have more choice than ever before , and can switch ever more easily to better deals. And compettition among companies to lure and keep them continues to intensify. This means better and cheaper products and higher returns. Yet as supercapitalism has triumphed, its negative social consequences have also loomed larger. These include widening inequality as most gains from economic growth go to the very top, reduced job security, instability of or loss of community, environmental degradation, violations of human rights abroad, and a plethora of products and services pandering to our basest desires. These consequences are larger in the United States than in other advanced economies, because America has moved deeper into supercapitalism. Other economies, followingclosely behind, have begun to experience many of the same things.
So two desirable outcomes, better deals for consumers and better return for investors have resulted in a spectrum of negative, generally unintended, consequences. How does that work? Reich gives many examples of attempts to curtail some of these negative consequence by players in the markets involved. The result inevitably is a loss in market share or a fall in return on investments. Who is responsible for this phenomenon? Everyone and no one. The high level of competition for consumers' and investors' money always insures that these folk have somewhere else to go when a given company tries to spend some of its income or profits on good social causes. It is not that these expenditures on social good don't happen, but when they do it is in a circumstance where the expenditure can be justified by some return such as an increse in the desireabilty of the consumer product or the stock. Hence, the ultimate driver for such changes is not the good achieved by the expenditure but its visibility as a promoter of the company for attracting consumers and investors.
So how does that impinge on our democratic processes?
Democracy is the appropriate vehicle for responding to such social consequences. That's where citizen values are supposed to be expressed, where choices are supposed to be made between what we want for ourselves as consumers and investors, and what we want to achieve together. But the same competition that has fueled supercapitalism has spilled over into the political process. large companies have platoons of lobbyists, lawyers, experts, and public relations specialists, and devoted more and more money to electoral campaigns. The result has been to drown out voices and values of citizens. As all this has transpired, the old institutions through which citizens values have been expressed in the [past] - industry-wide labor unions, local citizen based groups, "corporate statesmen" responding to all stakeholders, and regulatory agencies - have all been blown away by the gusts of supercapitalism.
Reich points out that there are plenty of policy ideas for coping with the problem. He claims that they are not being seriously considered because public policy has become less and less relevant to politics.
Singling out particular companies like Wal-Mart, for example, is not the way to approach the problem. The system has inbuilt resiliance to these attacks. It can adjust as consumers and investors simply find other places to get what they see as best serving their needs.
Without a democracy that will impliment them, policy ideas about "what should be done" are beside the point. A more fundamental question, therefore, is how to make democracy work better.
He then goes on to name some things that have been proposed, recognizing them as potentially helpful, but then goes on to warn:
But the question of how to enact and impliment them only leads to a deeper dilemma. Political reforms cannot be achieved as long as public officials and legislators are dependent on the very corporations whose influence is to be limited. The system can not repair itself from inside. [my emphasis]
There is the punchline. There is where Reich's identification of this as a systems problem is so important. There is also where my own political bias kicks in so strongly on top of my scientific bias. Democratic Capitalism won an ideological battle with Democratic Socialism some time ago. The Irony is that the aspects of Democratic Capitalism that made it more popular are now all but gone! Supercapitalism has drowned them out. Here's where I think the spectrum of possible solutions has to be widened once again. Maybe the root of all this lies in the willingness to put profit ahead of everything else. Maybe the system needs to be converted to one driven by human values. Is it worth dreaming of such things?
Editor's note: This review was originally published at the Daily Kos, which notes that its "content may be used for any purpose without explicit permission unless otherwise specified." The original page can be found here.Like what you read? Subscribe to the SFRB's free daily email notice so you can be up-to-date on our latest articles. Scroll up this page to the sign-up field on your right.