Supercapitalism

I didn't agree with some of his "solutions" to modern economic problems, yet I found his arguments sound. That is a great compliment. Is great to read a book that does a good job separating out the well thought-out reasoning from the highly-opinionated analysis.

In this book, Reich argues that capitalism has gone amuck and overpowered democracy. However, we should not blame corporations for this. They are doing what they are supposed to do - maximize shareholder value. They do this by seeking to implement rules and regulations that are favorable for their business, while fighting against those that are unfavorable. They devote resources to things that help them earn money, especially if they can get others to carry the cost.

He further argues that the "anthropomorphism" of corporations exacerbates this problem. The current legal system treats corporations on the same ground as individuals. They are taxed, they can fight court cases and they can contribute to political campaigns. Since they are much larger and focused on singular issues that impact them, they have a greater ability to influence public policy. However, they are not responsible for the negative impacts. A corporation does not have to breathe polluted air or live with poor bus service. It is also not strictly held responsible for its actions. (And when it is, it is often misguided. The criminal indictment of Author Anderson is used as an example - it ended up hurting a lot of innocent people and destroying a corporation, yet those high up in the current leadership were the most likely to land well afterwards.

He argues that corporations should be treated as a strict legal entity, without the ability to be considered as a "person". Even corporate income tax should be abolished, with all earnings taxed directly as individual earnings. Democratic institutions should rein in the power of corporations. Encouraging internal fixes to companies (corporate governance, philanthropy, and environmental activities) are mere window-washing that keep us away from true fixes. Regulations is also a strong negative - it is often twisted in to a vehicle that merely favors the incumbents. Even forcing companies to provide health insurance is a negative - it simply encourages more dependence on the broken corporate model.

He also argues for further strengthening of unions as a means to reform the capitalist system. This, however, seems to merely create another oligarch in the system. Luckily he makes this clear it is only his opinion and separates it out from the other well thought-out conclusions. Overall he provides a convincing argument against both Republican laissez-faire and Democractic regulation in favor of a true democratic reform of capitalism.