I’ve long been a fan of Robert Reich. But I thought he went a little off the playing field yesterday, What Happened to the Moral Center of American Capitalism? The article is in two parts. I’ll discuss them both, but note that I don’t actually disagree with the second half.
Like a lot of liberals, Reich pines for the days after World War II when CEO salaries were reasonable and social norms dictated that workers took part in increased productivity. But part of this is what I just wrote about this morning regarding Nicole Aschoff’s The New Prophets of Capital. As long as everything was fine and the US companies totally dominated the world, then sure: the capitalists were willing to spread a few crumbs around.
But even at that time, they weren’t happy about it. Remember: the Taft–Hartley Act was passed in 1947. That is probably the single most devastating law constraining union power. The reason that the business community hates unions is not about money. They can manage the money side of things. It is all about power. When they are feeling beneficent, they don’t mind giving out some raises or (Even better!) bonuses. What they don’t want is for workers to have any power — any say in the company. They don’t want them to be stakeholders.
So yes, the 1970s and 1980s, things got much worse. First with Carter and deregulation and then with Reagan and his tax cuts and declaring open season on unions. But that didn’t just happen. There was part of a long continuum. And it didn’t start in 1947 either. Throughout the Great Depression, the capitalist class did little but bitch and complain. You know how today conservatives are always on about how people don’t have jobs because they are lazy — that if they were just more “go-getters” then jobs would suddenly appear? Well, the same thing was going on during the depths of the Great Depression, even though today everyone thinks people were more understanding. Well the rich weren’t, because they never are.
So Reich is wrong to romanticize the post-war period. But he is right in the second part of his article where he talks about solutions. Because unlike Whole Foods’ John Mackey, Reich doesn’t think that companies are going to spontaneously become good guys through “conscious capitalism.” The truth is that our economy is a totally made up concept. It exists because the government exists. And if we want to do something about the extreme levels of income inequality in this country, it is going to be done through laws.
Here he lays out some concrete ideas that while unimaginable now, are great and necessary:
Then he goes on to talk about campaign finance reform. I’m all for that, but I think there is a bit of a chicken and egg problem here. The truth is that we wouldn’t need campaign finance law if we had relative economic equality. If the richest person in the world had a total net worth of $10 million, then she simply couldn’t distort the political system that much. (There are rumors that Donald Trump may only be worth about a quarter billion dollars, which means he is in no position to finance his own campaign.) So ultimately, we don’t need a constitutional amendment. We need people to show up to vote for candidates that are going do tangible good regarding inequality. And those policies are listed above in the bit of Reich’s article that I quoted.