Bacon's Rebellion

Democracy Thrives in Sunlight

Does This Go On My Permanent Record?

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by

James A. Bacon
in

Re: Supercapitalism: The Transformation of Business, Democracy and Everyday Life by Robert B. Reich.

Jim Bacon asked his writers to read and report on this book by former Clinton cabinet official, Robert B. Reich. Here is my homework in several installments.

Reich describes the changes in America, and across the world, caused by the transformation from the Industrial Era to the Information Era. And, for the Third World from the Agrarian Era to the Industrial and Information Era at the same time. His findings of economic trends and facts, believe it or not, were the basic same things predicted by the long range study (the last of the Army 21 studies) I lead in 1990-92 for the period 2005-2015.

Interestingly enough, our study said the key to the future, domestically and abroad, was “the political perception of economic change.” And, that a “Gandhi with guns” could articulate the grievances of the Have Nots as a cultural identity issue.

Consequently, I reject Reich’s dichotomy of Democracy vs. Supercapitalism (Reich’s name for the new phase of economics). Every ‘government’ that makes rules, executes rules and adjudicates rules from the tiniest tribe to the greatest civilization – ever – has its hands in the economy.

One of the best courses I took in grad school #1 was “Government and Business in a Mixed Economy” taught by the late Dick Darman and Roger Porter. The course showed how intertwined government and the business are. Was, are, is and will be – forever. So, I reject Reich’s basic assumption. Yet, many of his findings were spot on. Those that weren’t, I’ll just ignore for now.

His findings include the following items I’d agree are valid:
• Widening inequality in incomes
• Reduced job security
• Plethora of products and services appealing to our basest desires
• Large companies spend on lobbyists, lawyers, experts, public relations specialists and donations to ‘drown’ out the voices and values of citizens

The result is “Americans are losing confidence in democracy” (Reich’s word for our government).

Also, the GDP grew threefold (300%) from 1973 to 2006 – adjusted for inflation.

Productivity grew by 80%.

CEO incomes went from 66 times the ‘typical’ worker (1968) to 900 times the ‘typical’ worker (2005).

And, ta da, the gains in real income from 1974 to 2004 are by quintile

Lowest 5th – 2.8%, 2nd lowest – 12.9%, middle – 23.3%, 2nd highest – 34.9%, and highest – 61.6%.

Chew on those finding fellow Virginians. I’ll post in another installment what I think are better answers of “what must be done” than Reich’s. IMHO.

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  1. Anonymous Avatar
    Anonymous

    Dear Mr. Bowden,
    Regarding the Reich book, you write:

    “Consequently, I reject Reich’s dichotomy of Democracy vs. Supercapitalism (Reich’s name for the new phase of economics). Every ‘government’ that makes rules, executes rules and adjudicates rules from the tiniest tribe to the greatest civilization – ever – has its hands in the economy.”

    Can you elaborate a little more, since I don’t think I understand. I thought Reich’s point was that as Supercapitalism emerged, the traditional “governments” abdicated their responsibilities to set economic and social policies. As multi-nationals grew, the point became finding the lowest sales prices, the lowest posible costs of production and greater “efficiencies.” As the firms became more powerful and transational, these goals became more important than other goals, such as those for the nurturing of healthy societies that had been the governmental goals.

    As far as econoimies being mixed, that’s hardly an original thought. Keynes figured it out nearly a century ago. He advocated using government spending to achieve economic goals and a lot of that is going on today.

    Can you explain your reasoning in more detail? I am sure EMR, if not Jim Bacon, would give you an “A”.

    Peter Galuszka

  2. E M Risse Avatar
    E M Risse

    Dear Mr. Bowden:

    First I am pleased that we agree with Reich’s economic sketch of the past 140 years and the current wealth gap.

    Second, as we noted in our review of 6 March (“Why “Supercapitalism” Will Not Be A Popular Book”) you are right that Reich is not long on solutions.

    However, we beleive most trained in the law will agree doing away with the Myth that corporations are “persons” will have tremendous beleficial impact on the conditions upon which he focuses.

    I have a comment on the same paragraph about which Peter Galuszka raised a question:

    “Consequently, I reject Reich’s dichotomy of Democracy vs. Supercapitalism (Reich’s name for the new phase of economics.”

    I believe the problem is in the Vocabulary.

    For Reich “democracy” (small “d”) is not “Government.” He is concerned with democracy in not just Agencies but also in Enterprises and especially in Institutions.

    Sorting out the roles of the major forces shaping civilization is critical. That is why we spent so much time and effort tracing the evolution of Clergy, Nobility, Commoners and No Estate in 1302 to Agencies, Enterprises, Institutions, Individuals / Households / CAGs etc and The Poor / Off-Grid Radicals in 2008 in THE ESTATES MATRIX.

    EMR

  3. James Atticus Bowden Avatar
    James Atticus Bowden

    PG: Perfect description of what happened. Reich set up the compare and contrast with the Almost Golden Age of capitalist democracy and supercapitalism in two early chapters. In the intro paradox chapter, Reich talks about capitalism and democracy separately. He allows “Capitalism is almost a pre-condition for democracy as Milton Friedman argued.” (p. 9)

    Maybe I misread it, but EMR captures the distinctions between capitalism and democracy.

    EMR: I think you are correct like PG. Reich meant more than the government when he discusses ‘democracy.’

    Interesting that you trace the evolution of society from Europe – one would hope from England. I haven’t read your book.

  4. E M Risse Avatar
    E M Risse

    “That is why we spent so
    much time and effort tracing the evolution of Clergy, Nobility, Commoners and No Estate in 1302 to Agencies, Enterprises, Institutions, Individuals / Households / CAGs etc and The Poor / Off-Grid Radicals in 2008 in THE ESTATES MATRIX.”

    It is not a book, it is a Backgrounder in four PARTS (four columns) starting on 9 December 2007.

    As an Anglophile you will be interested in how much the England and the other future nation-states followed the same path from 1302 to 2008.

    EMR

  5. E M Risse Avatar
    E M Risse

    THE ESTATES MATRIX V. 2.0 with nine time frame columns in process.

  6. James Atticus Bowden Avatar
    James Atticus Bowden

    EMR: It isn’t that I’m an Anglophile, but, rather, a historical nerd. England is our Mother Country by every measure – even if you are an American by way of Antarctica.

    The culture that counts the most in shaping our culture – before 1607 was on those islands.

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