Post by Wayne Hall on Jan 4, 2024 22:34:44 GMT -5
Introduction
Robert Reich is an American economist, professor, author, and political commentator. Born on June 24, 1946, he served as the 22nd Secretary of Labor under President Bill Clinton from 1993 to 1997. Reich has been a prominent advocate for fair labor practices, raising the minimum wage, and fighting against economic inequality. A member of the Democratic party, he has authored numerous books on politics and economics. He is also a professor at the University of California, Berkeley, where he has continued to educate students on public policy.
Robert Reich
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I'm addressing this individual's ideas only because I've been prompted to offer a rebuttal, particularly after a liberal journalist suggested that his solutions for America are more practical than my own views. Upon examining his proposals, I was underwhelmed by their lack of vigor. Here, I will outline his suggestions and explain why I find them either misguided or insufficiently radical.
Saving Capitalism Is a Scam
In his book Saving Capitalism, Robert Reich draws a comparison between the current state of economic disparity and a rebirth of the "Gilded Age," pointing out the severe inequalities and the misleading belief in constant economic growth. He calls on the technology sector, which is often confident in the ability of technology to solve societal issues, to understand the need for substantial policy shifts and a reevaluation of fundamental economic principles. Reich sees the tech industry as part of an ensemble of influential economic sectors—alongside finance, pharmaceuticals, and agriculture—that he considers the modern equivalents of monopolistic powers. He argues that a meaningful overhaul of our economic practices and the philosophy behind corporate behavior is crucial for capitalism to truly serve the common good.
Reich disputes the simplistic dichotomy between laissez-faire markets and heavy-handed government intervention. He promotes the idea of choosing a market intended for widespread wealth distribution as opposed to one that concentrates riches among a few. He details how the present rules of capitalism are designed to siphon wealth upwards through complex schemes employed by different sectors. The government's role, Reich insists, is not peripheral but integral to the markets, as it defines and upholds the rules that shape property rights, monopolies, contracts, and bankruptcy legislation. The government, according to Reich, should be the creator and caretaker of a fair market system, a role he sees as neglected in the current form of capitalism. He touches on how political financing, weakened corporate oversight, and persistent tax loopholes are skewed to benefit the affluent. Reich advocates for increased marginal tax rates for the wealthy, additional tax brackets, and a capital gains tax rate that matches the income tax rate. He proposes expanding the Earned Income Tax Credit to support the middle class more broadly and suggests a reduction in the workweek to 35 hours to allow for job creation without income loss. He also calls for limiting executive salaries and enhancing workers' shares in corporate profits, particularly through the Employee Free Choice Act.
He challenges the dominant belief that corporations should prioritize shareholder returns above all else, advocating for a business model that also embraces the interests of workers, consumers, and communities—an approach that was once standard in American business. Reich debunks the meritocracy myth, arguing that income is not a true measure of personal value or moral standing, and that low wages often reflect systemic issues rather than individual failings. Utilizing data, Reich illustrates how economic inequality is exacerbated by certain corporate behaviors. He points out, for instance, that the bonus pool for Wall Street executives in a single year could have substantially raised the earnings of all full-time minimum wage workers in the country. He remarks on the growing dominance of a few top websites in internet traffic and criticizes tech behemoths like Google and Apple for spending more on patent litigation than on research and development.
Reich highlights the extreme wealth gap where a tiny fraction of the population holds more resources than the lower half. He notes that public assistance is effectively subsidizing labor costs for certain industries, such as fast food, inflating the profits of large corporations. He insists on the need for universal healthcare through a system like Medicare for all, which would replace the current, inefficient system dominated by private insurance companies. Reich proposes measures like overturning the Citizens United decision, exploring a universal basic income, and revising intellectual property and patent laws to ensure that the proceeds from innovation serve the public good. He calls for a reimagining of the corporate structure to balance profit with broader social and economic well-being. Reich warns against the continuation of a system where the masses struggle while a select few reap disproportionate benefits, a path that threatens the economic and democratic foundations of the United States. He calls for strict regulation of Wall Street, including reinstating the Glass-Steagall Act and breaking up large banks to avoid reckless financial practices.
Reich fails to address actually capitalism, driven by neoliberalism, it has evolved into an extreme form of crony capitalism. Reich's recommendations do not address the fundamental class disparities inherent in capitalism, nor do they tackle the principal injustices of such divisions. While Reich is concerned about growing income inequality and the decline of workers' rights, his reforms do not ensure these issues will be resolved. Reich's stance echoes the ideas of New Deal liberalism, which, in today's political climate, are erroneously viewed as extreme. Reich aims to soften capitalism's more severe impacts for those less fortunate, in pursuit of a fairer society. His analysis implies that meaningful economic mobility remains elusive for many. Today's progressives have much in common with early 20th-century reformers who sought to minimize class strife without drastically altering capitalism. These attempts are essentially conservative, mitigating the harshness of capitalism while maintaining its foundational structure and attempting to preserve democracy by reducing class tensions without abolishing the system that causes them.
The book, while commenting on wealth distribution, misses a deeper exploration into how wealth is fundamentally generated within capitalism, which relies on the exploitation of labor. Workers often produce more value than they receive in compensation, and without the means to own and sell their labor's product, they remain tied to this system. Reich does not examine the constraints faced by factory workers in terms of pay and working conditions, nor their lack of control over their work product. The "free market" often presents them with poor choices, compounded by the threat of joblessness. The inherent lack of choice for most workers is a fundamental aspect of capitalism that prevents it from evolving into a system that truly benefits all, no matter the reforms.
While acknowledging the historical achievements attributable to presidents like Roosevelt and Johnson, the book overlooks the pivotal role that unions and collective activism played in pushing for significant reforms such as Social Security and Medicare. Reich values the role of unions and grassroots activism as counterweights to the dominance of corporations and the elite, but he does not view them as catalysts for radical change. Historical labor movements aimed for lasting and fair societal structures, beyond merely balancing power. History shows that when these movements peaked, they hinted at the possibility of social control over production and wealth distribution. Nonetheless, the inherent conflict between socialism and capitalism often led to the suppression or dismantling of such movements, highlighting the perpetual struggle between capitalist frameworks and the socialist objectives many desire for a just society. When labor movements made significant gains, they sometimes led to substantial shifts, resulting in governments with socialist-leaning policies.
Reich has emphasized that to navigate the disarray of the marketplace, an interventionist industrial policy should aim to consolidate various government initiatives—including procurement, research and development, trade, antitrust measures, tax credits, and subsidies—into a cohesive and strategic framework. Italian corporatism during Mussolini's regime was based on the idea that government intervention in the economy should be deliberate and structured, orchestrated by a central authority rather than being random and piecemeal. Mussolini was critical of what he saw as the disorganized approach of government involvement in the economy and proposed fascism as a system to achieve clearly defined economic objectives through methodical organization. His advisor, Fausto Pitigliani, suggested that corporatist organization would bring a unified direction to the state's economic actions as determined by government planners, suggesting a shift away from a capitalist framework towards a more state-directed, socialist-oriented economy. Reich's tepid plea for a unified industrial strategy reflects an idea originally proposed by Pitigliani over fifty years ago—a concept that has consistently been a central tenet among those advocating for a forward-thinking industrial policy.
The AFL-CIO endorses a "tripartite National Reindustrialization Board," which would include labor, business, and government representatives to devise economic plans. Similarly, Reich supports forming public-private partnerships that encompass government, business, and academia, aimed at establishing national objectives and allowing only those investments deemed "productive" by government to proceed. This idea of planning echoes the economic control seen in Mussolini's Italy, where businesses were corralled into government-mandated syndicates, all under the strict regulation of a network of state planning agencies.
Reich advocates for a synergy between public and private sectors to steer economic success through strategic collaboration. However, his approach is fundamentally different from Mussolini's corporatism; it seeks a tempered balance, engaging in dialogue and negotiation with capitalist entities. It is my assessment that Reich's tendency to label Republicans as fascists stems from a commitment to preserving neoliberal governance rather than advocating for radical free-market changes like his Republican counterparts. From a perspective sympathetic to fascist socialism, Reich's policies could be seen as reinforcing capitalist oligarchy, rather than confronting it.
Reich's viewpoint that widespread disapproval of capitalism is being ignored is just false. The dissatisfaction is indeed acknowledged, but it leads to different interpretations. Donald Trump's rise exemplifies a tactic that offers token acknowledgment to this discontent while actually reinforcing the established order. On the other hand, proposals such as Biden's infrastructure initiatives aim to tweak capitalism by responding to popular complaints, yet they leave the foundational errors intact. The discourse in the United States has now shifted beyond the salvageability of capitalism and the methods to preserve it. The critical issue has become questioning the justification for upholding a system that is inherently averse to fundamental changes, especially in the light of modern political demands and those who wish to reform it.
Reich's concept of refining capitalism takes its cue from the days of Franklin D. Roosevelt and the post-World War II era in the U.S. At that time, a few dominant nations controlled most of the world's wealth and production. The concurrent threats of fascism and communism motivated those in power to grant a larger portion of wealth to the working masses, which informs the current mindset advocating for reform. Advocates for these incremental changes might inadvertently find themselves in agreement with the objectives of the elite, striving to maintain the status quo and prevent profound change. This approach, which favors stability and incrementalism over substantial overhaul, should be perceived as safeguarding the privileged from any significant upheaval. I would argue that this reactionary strategy for reform, one that Reich and others propose, acts more as a barrier to profound systemic change, preserving existing structures instead of instigating radical transformation. Such a method of economic fine-tuning can be compared to historical efforts to curb the natural progression of socialism, including both fascism and communism.