Robert Reich, a political economist and former secretary of labor under Bill Clinton, advocates rescuing capitalism by merely tempering the corporate and financial greed that it inevitably creates. His new book, Saving Capitalism: For the Many, Not the Few offers a genial apology for the system’s gross inequalities.
The book hits on the concerns of U.S. working people who see a disappearing middle class and joblessness as a likely fate. Reich highlights political and legal maneuvers that, we can all agree, rake in massive profits for big businesses but are wretched for us working folk.
Reich calls for “government activism,” regulations to help money trickle down to poor people. But his solutions are no fix for the extreme gap between rich and poor.
What is capitalism? Reich defines capitalism by how it operates, not by what it is. He thinks the economy functions under basic rules — laws surrounding property, monopoly, contracts, bankruptcy and enforcement. He says these rules create the market and regulate the economy.
Focused on how goods are bought and sold (the “market”), Reich doesn’t address how value and profit are actually created. It’s not magic. The labor of workers creates stuff worth more than they are paid. What remains, after covering business expenses, we Marxists call “surplus value” or profit. And it goes into the pockets of private business, not to working people and their communities for housing, healthcare, education and art. The theft of land and natural resources held in common — privatization — made the rise of capitalism possible in the first place.
What’s to save? The first two-thirds of the book expose a system of highly developed exploitation. It has many legit facts about how the rich, CEO’s, and Wall Street legally steal massive wealth. It documents policy changes since the 1970s that fast-tracked the concentration of wealth, highlighting deregulation, growth of monopolies, expansive intellectual property rights, and union busting.
Reich contrasts the dominance of the uber-rich to working people’s stagnating wages and growing destitution. He sees that governments can change laws to favor either the rich or the poor, and he shows how the current regulations look after moneyed interests.
After reading chapters on “The Rise of the Working Poor” and “The Rise of the Non-working Rich,” I was ready for a section titled “Dismantling Capitalism.” Instead, Reich lobbies for tweaking the system.
Reich’s non-solutions. According to Reich, government regulations could stop the bleeding of poor people without thwarting profiteers. He harkens back to a mythical golden era when capitalism benefited ordinary people: “After World War II, under the powerful influence of Keynesian economics, the focus shifted … toward government taxes and transfers as means both in stabilizing the business cycle and helping the poor.”
Reich sees a picture of a time when hard work could secure anyone a good life. Historically, that has never been true under capitalism. And the post WWII decades were not heydays of equality for people of color, women or queers, disabled vets and the many other have-nots. In 1958 women of color earned a measly 23 percent of white men’s wages.
Today Black women earn only 64 cents for every dollar paid to white males. Massive profits continue to be built on the backs of low-paid labor, making systemic racism, sexism and other bigotry fabulous for business.
Reich believes income inequality is not an economic problem, but a political failure of democracy. He thinks apathy of the working class has given money too much power in politics. He calls for the bottom 90 percent of U.S. residents to unite to create a “countervailing power” to the money interests and take control of the government. How? He suggests a number of reforms — raise the minimum wage, create a universal basic income, rein in CEO pay, change the tax structure, fund education, and more.
Essentially, the book is a plea for liberals, activists and radicals to mobilize for capitalism instead of revolution. But capitalism is working as it is supposed to, and that is not for the benefit of the majority. The rich get richer and the poor get poorer. And the capitalist state is doing a fine job of serving the rich.
Necessity breeds revolution. The reality of capitalism in the 21st century is destruction of our planet and our right to live and to advance civilization. But it is not an economy predestined to exist forever. Reich doesn’t see that workers create wealth in our society, and that’s what gives our class incredible power.
We organize for political power … not to save the system, but to replace it.
Norma M. Gallegos, paraprofessional Special Ed high school educator and Bay Area unionist, can be reached at firstname.lastname@example.org.