[NOTE: This review has been amended to include a comment I left below because I wanted to amend that comment as well. I have a rich social life and enjoy being outdoors.]
Consider this an adjunct to the Gawrker Literary Corner. I picked up this book because I wanted to see what a very intelligent person, Robert B. Reich (former Secretary of Labor to Bill Clinton), had to say about saving a system I feel very deeply is too intrinsically flawed to be savable.
Reich first notes, quite accurately, that the interminable debate between “free market” (less government) and “regulation” (more government) is nothing but a cheap trick of language. The “free market” folks aren’t arguing for a return to the state of nature. They are arguing for different government that regulates certain aspects of life (contracts, patents, monopolies, the enforcement thereof) differently than a government of “high regulation.” Reich quotes Hobbes to note, accurately, that life without government—truly without government, not “free market” government—would by solitary, poor, nasty, brutish, and short. The Milton Friedman types don’t want no government, they want a government that protects their interests over the interests of the common person. Not that anyone with half a brain cell to fire really thinks people calling for “less government” really want to go back to a Wild West free-for-all.
Reich spends the first 2/3 of the book, roughly 160 pages, speaking intelligently and clearly about the systematic problems of capitalism and capitalism in America. He makes no bones about the fact that these problems are fairly well ingrained in the capitalist model—at least the capitalist model that America has adopted.
He lists as problems that the current system of school funding is wired the reverse that it should be (more money to better students); that the myth of an American meritocracy is a true and utter fiction; and most importantly, that the people rigging the game in their favor—the 1%—have done nothing other than behave in their own rational self interest.
Let me elaborate greater on that last point because it is the key point in why I disagree with Reich that capitalism can be saved. Reich notes that he
[does] not mean to suggest that those at the top who are shaping the rules are intentionally malevolent. They are acting out of the same self-interest that has been thought to guide the theoretical “free market” toward efficient, and therefore publicly beneficial, outcomes.
Here Reich strikes on an important point: the people who make the rules that have destroyed the American middle class—and more—were only doing exactly as they should have to preserve their own interests within the existing system, namely, capitalism.
Reich is clearly familiar with Marx, using Marxist phrases and he’d have to be a lousy economist to at least not be familiar with Marx’s thought. But he has clearly ignored one of the central points of Marxism: that these people—the 1% rigging it for themselves—have to do this. They have no choice. The pressures of competition mean that if they don’t, someone else will. And when someone else does, they’ll go out of business. Profit or die is the core principle of capitalism. Capital is the coyote. Profit is the roadrunner. This is a point Lenin notes repeatedly in his book Imperialism.
And herein lies the problem with Reich’s solution, extensive and wide reaching reforms.
As an aside, let me be perfectly clear. The long list of reforms that Reich proposes are excellent steps in the right direction. They would vastly improve the life of 90-99% of the American public and I think that, in the short term, they should be pursued. I do not think they are permanent solutions.
The problem now with reform is capitalist pressure from foreign countries. The relentless drive for profit ingrained and inseparable from capitalism pushed the big moneyed interests (finance, manufacturing) to seek foreign markets for its product (as Marx noted, 150 years ago, that it would). This desire for foreign markets let to the creation of “free trade” agreements, like NAFTA and the currently much-maligned TPP. These agreements allow the flow of capital to foreign countries (and, importantly, out of foreign countries) where it was previously not possible. These trade agreements are extremely difficult to get out of. The result is that the world is, in effect, irreversibly globalized.
Now the issue is this: these trade agreements work in both directions (I think?). Attempts today to restrict the expansion of large corporations (through tariffs or other efforts to keep capital and jobs in America) will have one result: foreign corporation dominance. These foreign corporations will not be under the same restrictions as American corporations after the proposed reforms. These foreign corporations will be able to dominate American corporations.
In essence, American capital is forced to operate the way it does, at the expense of the 99%, and reforms would only lead inevitably to its destruction. Once again, capital has proved to be its own gravedigger.
Reich proposes a laundry list of reforms, all of which, as noted earlier, would vastly improve the life of the average American. He concludes with a call for a Universal Basic Income. A UBI would be a truly wonderful reform! I wholeheartedly support a UBI. There exists one problem with the UBI. And Reich has already shown the problem.
Reich talks at length about the power that capital has over the political sphere. He describes it as a vicious cycle: capital leads to political power, which leads to changing the rules to create more capital for the already-wealthy, which leads again to more political power yet (which is, as noted above, inseparable from capitalism), and so on ad infinitum.
The Universal Basic Income would not change this dynamic. Reich posits the UBI as a solution for when “the robots [full automation] take over” and the world is separated into two categories: those who own the robots (which do everything for us) and everyone else. But what, exactly, is to stop the owners of these all-doing robots from changing the system? They will undoubtedly view the UBI as a drain on their rightly earned (a point Reich debates briefly but clearly doesn’t want to spend too much time on) income by people who do nothing and add nothing to the economy. Think, if you will, of the average Republican response to the idea of welfare. To think that the response to a UBI will be any different is absurd. And therein lies the problem. The owners of the means of production will yet again want to wrest these reforms away from the underclass. And because they are the controllers of political power, via their control of capital, they will win.
Not to beat a dead horse too hard but I’m surprised Reich doesn’t find anything terribly cruel about his world where the owners of the robot production facilities basically subsidize everyone else. And I don’t mean cruel towards the robo-bourgeoisie (sorry).
The world, in that scenario (Reich’s proposal of a UBI in a world of full automation), would be separated into two classes. Wealthy bourgeois owners of the means of production in the form of the “robots” (an extremely small group) and literally everyone else. The robo-bourgeoisie would be fabulously wealthy and everyone else would do fine enough (assuming the robo-bourgeoisie didn’t try and hack away at the universal basic income). But on what basis would the robo-bourgeoisie be wealthy? At some point the original inventors of these do-everything robots would die and it would just be the heirs of the inventors who couldn’t even stake a claim to having put any work in towards the betterment of society. And yet they would still remain fabulously wealthy by dint of having been born into the right family. Further, as Reich himself notes, to what degree do the rich really deserve their wealth? To what degree have they literally manufactured this wealth for themselves and to what degree have others helped?
Of course there would, at some point, be literally no hope of entrance into the robo-bourgeoisie. Eventually when the last robot is invented, the one that can do everything, nothing is left to invent. The result then is a static class of the fabulously wealthy and, then, the rest of us to just go on existing while we watch the upper class from afar enjoy the spoils of their parents/grandparents/etc. labor. The aforementioned UBI makes that a more tolerable society than what we have now, but how just is it? Not at all.
The short-term solution to the problems with American capitalism are indeed Reich’s reforms. When I say short-term I don’t mean a week or a month or even a year. Enacting these reforms might well create a period of prosperity equal to post-WW2 America for an equal period of time. And perhaps that prosperity would even be shared more equally to include ethnic minorities. But a time would come when some new-age Milton Friedman would get up and proclaim to the world that the economy is not working efficiently and that we need “less government.” And a political party would take up his call and lead the country back again through the slog of free market economics and yet again into a place where the average American loses at the expense of the incomprehensibly wealthy.
The solution, the long-term solution, is not the reforms Reich proposes. The long-term solution is working class control of the means of production and state control of the economy. The long-term solution is governance by workers’ councils. The long-term solution is socialism.