Check out Tony Judt’s review–”The Wrecking Ball of Innovation”–of Robert Reich‘s most recent book Supercapitalism appearing in the December 6th issue of the New York Review of Books: Here are the first two paragraphs: “Supercapitalism is Robert Reich’s account of the way we live now. Its story is familiar, its diagnosis superficial. But there are two reasons for paying attention to it. The author was President Clinton’s first secretary of labor. Reich emphasizes this connection, adding that “the Clinton administration–of which I am proud to have been a part–was one of the most pro-business administrations in American history.” Indeed, this is a decidedly “Clintonesque” book, its shortcomings perhaps a foretaste of what to expect (and not expect) from another Clinton presidency. And Reich’s subject–economic life in today’s advanced capitalist economy and the price we are paying for it in the political democracies–is important and even urgent, though the “fixes” thatthe proposes are unconvincing. Reich’s theme goes as follows. During what he calls the “Not Quite Golden Age” of American capitalism, from the end of World War II through the 1970s, American economic life was stable and in comfortable equilibrium. A limited number of giant firms–like General General–dominated their predictable and secure markets; skilled workers had steady and (relatively) safe jobs. For all the lip service paid to competition and free and civic health of markets, the American economy (in this respect comparable to the economies of Western Europe) depended heavily upon protection from foreign competition, as well as standardization, regulation, subsidies, price supports, and government guarantees. The natural inequities of capitalism were softened by the assurance of present well-being and future prosperity and a widespread sentiment, however illusory, of common interest. “While Europeans set up cartels and fussed with democratic socialism, America went right to the heart of the heart of the matter–creating democratic capitalism as a planned economy, run by business.” [Citations Omitted] See also Robert Frank’s review “Invisible Handcuffs” in the NY Times.
For decades Milton Friedman and his cadre of “free market” economists insisted that freedom was inseparable from capitalism and that regulating the market was anathema to freedom. Two remarks are in order. First, there’s nothing unregulated about free markets. They are regulated to the teeth. It’s the kind of regulations that matter, not regulation versus non-regulation. Second, if capitalism is necessary for liberty, what is the effect of capitalism on equality. Doesn’t the so-called “free market” sacrifice equality at the alter of capitalism? And doesn’t democracy require equality? If these relations are correct, capitalism is good for liberty, but not democracy. Are these the choices with which we’re stuck?