Wednesday, September 19, 2007


Here's a subject that almost got me "flunked out" and kicked out of my Sophomore Year Macro Economics class....primarily because I said the same things that Robert Reich is now saying.

There's a great synopsis of his new book, Supercapitalism, over at KOS this morning and I think it's a book I'm going to are some snippets and some commentary will follow afterwards.
In Supercapitalism: The Transformation of Business, Democracy, and Everyday Life, Robert Reich agrees that global capitalism had made goods both cheaper and more plentiful. However, the price tag at the store doesn't represent the full price we pay for this consumer bounty. In creating not just a market, but an international culture, driven almost entirely by price, we've sacrificed much of our ability to control the actions of corporations or even the quality of our own lives.


In the end what Reich has to say is that both left and right are wrong in their view of capitalism. Corporations are not people. They're not moral or immoral. They just are. And if that sounds too corporate friendly, Reich makes a terrific case for why corporations should not be given the political clout and legal protections of human citizens. In his view, a corporation should have both the responsibilities and rights of a table lamp.
The right is at least as wrong in viewing the market as some kind of self-correcting "natural" system that always tends to produce an overall benefit. There's no evidence of this now, or ever. In fact, history shows that the market needs constant adjustment and correction -- often involving huge amounts of government support that the "free market" advocates are quick to forget when the numbers are going up.

It's that area I highlighted in red that almost got me kicked out of class by the very, very, very conservative Econ Professor. Arguing that there is no such thing as a "free market" or that there are no "natural market forces at work" is quite likely to enrage any self-respecting conservative businessman and subsequently get you labeled as a "communist" (because in the mind of a conservative, there are ONLY capitalists and communists, so if you aren't one then you are by elimination, obviously the other)but it has been a long-held belief of mine which I have never had the time or (quite honestly ) the motivation to research at the depth that Reich does here...or for that matter...the depth that any serious economist would do......The argument I made then is similar to what Reich is saying now, in that I posited that problem with capitalism as we were then (and even moreso now) were practicing it, was that it required continued growth of markets and profits which were not, in my opinion, infinite. They were and are quite finite...we cannot exploit cheap labor forever because it will eventually reach the proverbial "race to the bottom". We were then, and are now, expecting to make more profits with less cost over and over again...or, put another way, we are expecting to manufacutre more and more for less and less until, ultimately, we expect to build EVERYTHING FOR NOTHING.

That's the fools dream of Supercapitalism. And that is the disaster waiting to happen.

I've admired Reich since the late 1980's because he has taken a "view from 30,000 feet" (as the new pseudo-MBAs like to say) of the American economy and how our culture is shaping that economy.
Even if you don't like studying economics....and let's face it, who'll still like Reich's work. It's unlike most essays on economics in that it's....READABLE.

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