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Can Democracy Survive Global Capitalism?
In the past few decades, the wages of most workers have stagnated, even as productivity increased. Social supports have been cut, while corporations have achieved record profits. Downward mobility has produced political backlash.
What is going on? Can Democracy Survive Global Capitalism? argues that neither trade nor immigration nor technological change is responsible for the harm to workers’ prospects. According to Robert Kuttner, global capitalism is to blame. By limiting workers’ rights, liberating bankers, allowing corporations to evade taxation, and preventing nations from assuring economic security, raw capitalism strikes at the very foundation of a healthy democracy.
The resurgence of predatory capitalism was not inevitable. After the Great Depression, the U.S. government harnessed capitalism to democracy. Under Roosevelt’s New Deal, labor unions were legalized, and capital regulated. Well into the 1950s and ’60s, the Western world combined a thriving economy with a secure and growing middle class.
Beginning in the 1970s, as deregulated capitalism regained the upper hand, elites began to dominate politics once again; policy reversals followed. The inequality and instability that ensued would eventually, in 2016, cause disillusioned voters to support far-right faux populism. Is today’s poisonous alliance of reckless finance and ultranationalism inevitable? Or can we find the political will to make capitalism serve democracy, and not the other way around? Charting a plan for bold action based on political precedent, Can Democracy Survive Global Capitalism? is essential reading for anyone eager to reverse the decline of democracy in the West.
What is going on? Can Democracy Survive Global Capitalism? argues that neither trade nor immigration nor technological change is responsible for the harm to workers’ prospects. According to Robert Kuttner, global capitalism is to blame. By limiting workers’ rights, liberating bankers, allowing corporations to evade taxation, and preventing nations from assuring economic security, raw capitalism strikes at the very foundation of a healthy democracy.
The resurgence of predatory capitalism was not inevitable. After the Great Depression, the U.S. government harnessed capitalism to democracy. Under Roosevelt’s New Deal, labor unions were legalized, and capital regulated. Well into the 1950s and ’60s, the Western world combined a thriving economy with a secure and growing middle class.
Beginning in the 1970s, as deregulated capitalism regained the upper hand, elites began to dominate politics once again; policy reversals followed. The inequality and instability that ensued would eventually, in 2016, cause disillusioned voters to support far-right faux populism. Is today’s poisonous alliance of reckless finance and ultranationalism inevitable? Or can we find the political will to make capitalism serve democracy, and not the other way around? Charting a plan for bold action based on political precedent, Can Democracy Survive Global Capitalism? is essential reading for anyone eager to reverse the decline of democracy in the West.
384 pages, Hardcover
First published April 10, 2018
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April 12, 2018
In what is the most non-partisan, insightful, and exhaustive analysis of our current global economic, political, and social malaise of the last three decades, economist Robert Kuttner explains that the problem is neither globalization nor technology. The problem is laissez-faire capitalism and the asymmetric power it allocates to bankers, investors, and speculators.
While Kuttner doesn’t cover the first one in much detail, there have been three periods of aggressive financial deregulation in the industrial era. And each was ultimately empowered, indirectly, by the need to finance war debt. The first was the war debt of the Civil War, which was ultimately financed by crushing debtors and rewarding creditors, an asymmetric victory that gave rise to both the gilded age and the cooperative movement, ultimately called the populist movement, of the late 19th Century. The second occurred between the world wars and ultimately gave rise to the Fascists, Hitler and Mussolini.
The third was different and followed World War II. It was different because the US and European powers, for reasons Kuttner explains in detail, decided to regulate their financial markets. What followed was a period of unprecedented economic growth and income equality.
There are two primary constituents of all modern economic activity. One is labor, which I broadly define to include everyone who actually contributes directly to the manufacture of products or the provision of services. The second are the capitalists themselves—the bankers, investors, and speculators that trade in the capital that every business needs to operate and expand.
Kuttner’s ultimate message, I believe, is that the interests of these two groups is in natural conflict. But when their interests are balanced, as they were following World War II, growth and prosperity is optimized. When one or the other group is favored, growth is compromised, inequality is accelerated, and ultimately, heated divisions boil to the surface. Left unaddressed, totalitarianism steps in to fill the void.
We are currently in a period of unfettered capitalism in which banks, investors, and speculators are both operating with no oversight and no regulatory controls and reaping an increasing percent of economic growth and wealth. For the US it is a process that began in the 1970s (For Kuttner, 1973 was the watershed year.) and has accelerated ever since.
Aggravating the excesses, the CEO suites of our corporations today (I once counted myself among them.) are no longer occupied by businesspeople. They are occupied by capitalists, who through their actions, value their shareholders far more than their employees and the communities in which they operate. That, of course, is what we incentivize them to do, but it is the reality nonetheless. And it is a big change from the corporate world I entered in the 1970s.
Kuttner correctly points out that technology is not the culprit. I believe, however, that technology has empowered the excesses of laissez-faire capitalism for a couple of reasons. The first is a by-product of technology that is often over-looked: Among the great powers of technology is its ability to dumb itself down. In my four decades in international business I was involved with building overseas plants from the 1970s on. Early in that period, while it is always dangerous to generalize, it often took decades to bring a greenfield plant up to the efficiency levels of established plants in the US. One plant I was involved with in Mexico in the 80s never actually got there in my time with the company. Another plant I helped to open in China in the 00s, on the other hand, got there in just a few years. And the difference had nothing to do with the laborers themselves. The difference was the technology of production. (Obviously differences in the complexity of the production process plays a role, but the two plants I reference were very comparable on that front.)
The second impact of technology has to do with its impact on overall health and longevity. People are living longer, by a lot. And that’s a very good thing, indeed, but we have not adapted our social and economic expectations (when to retire, on the one hand, and business’ infatuation with youth, on the other) to that new reality.
The point is not to reject technology. That is not a practical choice anyway. Technology will flourish whether we want it to or not. (And we should want it to.) The only choice we have is whether to manage it or not and, to date, the libertarians of Silicon Valley and their allies in the venture capital world have convinced us not to.
In the end, capitalism comes in a variety of shades and flavors. At the moment it would be hard to find a way to favor the bankers, investors, and speculators any more than we are, both here in the US and in Europe. And we’re paying the price in terms of extreme exclusion, income inequality, stagnant economic growth, and social injustice.
And, of course, those developments have put democracy itself at risk. As Kuttner points out, Donald Trump is a byproduct of the factors that put democracy at risk, not the spark. And removing him will change nothing if we don’t, at the same time, put the bridle back on our capitalism. Government regulators are not the enemy if, and it’s a big if, we put the right people in that role.
Contrary to myth, the US has never been a free market economy when it comes to capital. Jefferson himself warned us about the tyranny of the corporation unhinged from society and the real economy. The bankers, however, won on three occasions: the first led to the market crash of 1929, the second led to the Great Depression, and we are living in the third. In each case, the rich did fine; they got richer. It is we, the rest of us, who suffered.
Kuttner sums it up best: “Democracy is more fragile than we would like it to be. It is particularly vulnerable when the economy deserts the common people.” He cautions, moreover, that liberalism is not, by itself, enough. “…liberalism and democracy do not necessarily go together. It is possible to be nondemocratic, but relatively liberal in accepting core values of the rule of law and respect for the individual.” Meaning, of course, we should evaluate other nations not by the extent to which their political system mirrors our own, which our foreign policy makers often do, but on the democratic outcome achieved.
The problem is not political party affiliation. The challenge facing every form of government is its ability to accommodate and integrate large minorities of marginalized people, either economically or politically. Both political parties in the US have failed different groups of marginalized people, but they have failed nonetheless.
In different senses, both the Republicans and the Democrats are right and wrong. “This will require much stronger democratic institutions and a radical transformation of capitalism into a far more social economy.” We don’t just need to “drain the swamp” in Washington. We need to fundamentally transform the status quo on Wall Street and in Silicon Valley, too.
In the end, Kuttner is guardedly optimistic: “This is no basis for complacency, but reason to resist despair.”
I can’t recommend this book strongly enough. Thank you, Mr. Kuttner.
While Kuttner doesn’t cover the first one in much detail, there have been three periods of aggressive financial deregulation in the industrial era. And each was ultimately empowered, indirectly, by the need to finance war debt. The first was the war debt of the Civil War, which was ultimately financed by crushing debtors and rewarding creditors, an asymmetric victory that gave rise to both the gilded age and the cooperative movement, ultimately called the populist movement, of the late 19th Century. The second occurred between the world wars and ultimately gave rise to the Fascists, Hitler and Mussolini.
The third was different and followed World War II. It was different because the US and European powers, for reasons Kuttner explains in detail, decided to regulate their financial markets. What followed was a period of unprecedented economic growth and income equality.
There are two primary constituents of all modern economic activity. One is labor, which I broadly define to include everyone who actually contributes directly to the manufacture of products or the provision of services. The second are the capitalists themselves—the bankers, investors, and speculators that trade in the capital that every business needs to operate and expand.
Kuttner’s ultimate message, I believe, is that the interests of these two groups is in natural conflict. But when their interests are balanced, as they were following World War II, growth and prosperity is optimized. When one or the other group is favored, growth is compromised, inequality is accelerated, and ultimately, heated divisions boil to the surface. Left unaddressed, totalitarianism steps in to fill the void.
We are currently in a period of unfettered capitalism in which banks, investors, and speculators are both operating with no oversight and no regulatory controls and reaping an increasing percent of economic growth and wealth. For the US it is a process that began in the 1970s (For Kuttner, 1973 was the watershed year.) and has accelerated ever since.
Aggravating the excesses, the CEO suites of our corporations today (I once counted myself among them.) are no longer occupied by businesspeople. They are occupied by capitalists, who through their actions, value their shareholders far more than their employees and the communities in which they operate. That, of course, is what we incentivize them to do, but it is the reality nonetheless. And it is a big change from the corporate world I entered in the 1970s.
Kuttner correctly points out that technology is not the culprit. I believe, however, that technology has empowered the excesses of laissez-faire capitalism for a couple of reasons. The first is a by-product of technology that is often over-looked: Among the great powers of technology is its ability to dumb itself down. In my four decades in international business I was involved with building overseas plants from the 1970s on. Early in that period, while it is always dangerous to generalize, it often took decades to bring a greenfield plant up to the efficiency levels of established plants in the US. One plant I was involved with in Mexico in the 80s never actually got there in my time with the company. Another plant I helped to open in China in the 00s, on the other hand, got there in just a few years. And the difference had nothing to do with the laborers themselves. The difference was the technology of production. (Obviously differences in the complexity of the production process plays a role, but the two plants I reference were very comparable on that front.)
The second impact of technology has to do with its impact on overall health and longevity. People are living longer, by a lot. And that’s a very good thing, indeed, but we have not adapted our social and economic expectations (when to retire, on the one hand, and business’ infatuation with youth, on the other) to that new reality.
The point is not to reject technology. That is not a practical choice anyway. Technology will flourish whether we want it to or not. (And we should want it to.) The only choice we have is whether to manage it or not and, to date, the libertarians of Silicon Valley and their allies in the venture capital world have convinced us not to.
In the end, capitalism comes in a variety of shades and flavors. At the moment it would be hard to find a way to favor the bankers, investors, and speculators any more than we are, both here in the US and in Europe. And we’re paying the price in terms of extreme exclusion, income inequality, stagnant economic growth, and social injustice.
And, of course, those developments have put democracy itself at risk. As Kuttner points out, Donald Trump is a byproduct of the factors that put democracy at risk, not the spark. And removing him will change nothing if we don’t, at the same time, put the bridle back on our capitalism. Government regulators are not the enemy if, and it’s a big if, we put the right people in that role.
Contrary to myth, the US has never been a free market economy when it comes to capital. Jefferson himself warned us about the tyranny of the corporation unhinged from society and the real economy. The bankers, however, won on three occasions: the first led to the market crash of 1929, the second led to the Great Depression, and we are living in the third. In each case, the rich did fine; they got richer. It is we, the rest of us, who suffered.
Kuttner sums it up best: “Democracy is more fragile than we would like it to be. It is particularly vulnerable when the economy deserts the common people.” He cautions, moreover, that liberalism is not, by itself, enough. “…liberalism and democracy do not necessarily go together. It is possible to be nondemocratic, but relatively liberal in accepting core values of the rule of law and respect for the individual.” Meaning, of course, we should evaluate other nations not by the extent to which their political system mirrors our own, which our foreign policy makers often do, but on the democratic outcome achieved.
The problem is not political party affiliation. The challenge facing every form of government is its ability to accommodate and integrate large minorities of marginalized people, either economically or politically. Both political parties in the US have failed different groups of marginalized people, but they have failed nonetheless.
In different senses, both the Republicans and the Democrats are right and wrong. “This will require much stronger democratic institutions and a radical transformation of capitalism into a far more social economy.” We don’t just need to “drain the swamp” in Washington. We need to fundamentally transform the status quo on Wall Street and in Silicon Valley, too.
In the end, Kuttner is guardedly optimistic: “This is no basis for complacency, but reason to resist despair.”
I can’t recommend this book strongly enough. Thank you, Mr. Kuttner.
July 21, 2018
Um passeio pela história européia e americana mostrando como democracia e capitalismo não necessariamente andam juntos. Estou bastante acostumado com o discurso de que a automação tira trabalhos, máquinas estão fazendo os salários continuarem baixos, de livros como Segunda Era das Máquinas. Mas Kuttner dá um outro ponto: isso pode ser fruto de poder econômico corroendo o poder político.
Em outros momentos da história ou em países como a Alemanha recentemente, medidas ativas ajudaram a manter operários capacitados e atualizados o suficiente para migrarem para novos empregos e continuarem melhorando o salário que ganham. Enquanto em outros, como os EUA, segundo Kuttner o financiamento de campanha crescente levou os Democratas a apoiarem cada vez menos medidas mais sociais e se aproximarem cada vez mais dos Republicanos. E aí vão fazer pior o que republicanos já fazem bem.
O livro casa bem com a discussão de Throwing Rocks at Google Bus e poucos outros livros que li, que discutem como a concentração de capital na mão de cada vez menos pessoas aumenta muito a capacidade que têm de interferir em grande escala na política. E como medidas muito liberalistas acabam sendo imparciais e favorecendo mais alguns do que outros e tornando o mercado menos livre do que era antes. E quanto mais corroída a confiança na democracia, no Estado e em entidades, maior a dependência das pessoas em empresas e quem justamente tem justamente um interesse contrário ao delas.
Em outros momentos da história ou em países como a Alemanha recentemente, medidas ativas ajudaram a manter operários capacitados e atualizados o suficiente para migrarem para novos empregos e continuarem melhorando o salário que ganham. Enquanto em outros, como os EUA, segundo Kuttner o financiamento de campanha crescente levou os Democratas a apoiarem cada vez menos medidas mais sociais e se aproximarem cada vez mais dos Republicanos. E aí vão fazer pior o que republicanos já fazem bem.
O livro casa bem com a discussão de Throwing Rocks at Google Bus e poucos outros livros que li, que discutem como a concentração de capital na mão de cada vez menos pessoas aumenta muito a capacidade que têm de interferir em grande escala na política. E como medidas muito liberalistas acabam sendo imparciais e favorecendo mais alguns do que outros e tornando o mercado menos livre do que era antes. E quanto mais corroída a confiança na democracia, no Estado e em entidades, maior a dependência das pessoas em empresas e quem justamente tem justamente um interesse contrário ao delas.
May 29, 2018
While I agree with the thesis of this book, it was so hard to get through because there was so much repetition and just recitation of all the facts that we already know by following recent news and economic data. I think Kuttner is absolutely right that the globalization has had a detrimental effect on democracy. He's also right that it's benefited the wealthy at the expense of the poor in each country. But I don't agree that we need to double down on economic nationalism. I much prefer Dani Rodrick's book on globalization, which was much more sober, readable and right.
Read
May 6, 2021This is a great book which manages to synthesize a lot of notions I’ve had about the direction we ought to be headed in the next few years. Not only that, Kuttner’s book is a great history lesson. In reading this book, we become acquainted with more than just the short comings of our society—we can actually understand what mistakes were made.
Before getting into the details, I simply love that Kuttner is making Polanyi’s thought accessible and available to the 21st century reader. Reading ‘The Great Transformation’ was a big moment for me. If Kuttner’s book results in more people reaching for Polanyi, this alone is a tremendous public service.
Anyway, there are some interesting points in CDSGC which go against conventional wisdom, particularly the “wisdom” which sought to remedy the stagflation of the 1970s. Broadly speaking, this is none other than the infamous economic philosophy that the most important issues to establish sound economies are balanced budgets and slowing inflation to a crawl.
Rather than a result of “uncompetitive” wages due to labor power, the problems of the 1970s were the result of changes in the global economy. Asian exports were subsidized, while Asian markets were closed to U.S. exports. European leaders, meanwhile, had their own protections on their internal market. This system did much to integrate Asian and European economies into the global capitalist system… yet, for all intents and purposes, this resulted in a landslide power shift from labor to capital. Now, my more cynical side thinks that this was a deliberate act by a class of people to wrest power from the working majority. Yet, perhaps it was more of a diplomatic act than an act of class warfare (though I’m sure this was always a nice “perk” for the capitalist class!). After all, in a world split between capitalist and communism hemispheres, America did all it could to make capitalism an attractive system to other nations so that they could resist the temptation of communism… whatever the major driving factor, in this process America betrayed its constituency.
And it was not just capital which betrayed labor, but *labor* which betrayed workers. Despite the high levels of union membership, labor militancy had been sapped in the post-war era… not, at first, by an outright attack on unions, but by their initial *institutionalization* through the Taft-Hartley Act which undermined the ability of unions to act as a counterweight to the excesses of capital. Unions would no longer be agitators, but partners in the corporate structure, nominally representing labor, yet not causing too much of a fuss so long as their members were taken care of within their respective corporate structures. By the time outright attacks on labor would occur in the 70s and beyond, unions had lost their sway as an actual social *movement* and were thus crippled in their ability to fight back cuts in staff, wages, and amenities. This is an interesting point that I don’t hear being argued enough.
In any case, these subtleties which arose in the 70s were not recognized by the Carter administration, which drank the supply-side kool-aide and cut capital gains taxes almost in half! This was the beginning of the end of creative, democratic solutions to economic problems. We know the story from here—austerity, balanced budgets, more austerity, more balanced budgets, &c… the result being a decaying public infrastructure. Not even Social Security could be saved. The irony of SS was that Reagan intended to fund the program on payroll taxes, a calculation which predicted increases in wages… yet the increases in wages never came (as we know) and we are woefully short in providing benefits to retiring boomers as a result.
After decades of supply-side nonsense, we’re still acting the classic madman who thinks that if we just do the same thing *this* time, maybe it’ll turn out differently.. maybe *this* time, if we rectify deficits, confidence will return to the market in such a way that wealth is spread to all sectors of society… yet we never see this in a manner that can be sustained longer than boom/bust cycles. Problems such as flat wages and indebted households, for instance, remain. Only public investment to stimulate social income (after FDR) can overcome problems like these. The alternative is growing inequality, a growing sense of unfairness, more outrage, more anger, and more of the sort of thing that got Trump elected. And no amount of corporate responsibility or NGO programs will solve this. Political questions need political answers. Kuttner says that,
“[…] these are non-state, market-driven strategies that rely entirely on market forces to achieve social goals. This is quite the opposite of Polanyi’s sensibility, since it acknowledges and even reinforces the hegemony of markets as the mechanism for making decisions required by systematic market failures.”
Above all, these market “solutions” involve a picture of the constituent as a consumer rather than a citizen. The difference is that only the *citizen* elects a government… the only polity able to challenge sociopathic corporate behavior. The sort of normative pressure that consumers place on corporate behavior is simply not enough.
Kuttner is under no illusions that we have an easy task before us—a strict policy program which seeks to change society on the national level will inevitably come up agains the powerful interests of global capital. Yet, Kuttner believes that (unlike other primarily economic bodies like the European Union) the United States is in a unique position to lead the way in changing the face of how we manage to govern in a global world. Much of this is because the U.S. itself is responsible for instituting a global economic program, integrating nations into the global economy since the post-war period through initiatives like the Marshall Plan. Like no other nation we are poised to instigate changes in global governance via national programs which require economic decision making to be responsible to the social arena rather than beholden to growth and profit targets.
In short, America, like no other nation, has the power to make a choice of international consequence. Will it meet economic grievances through a caricaturesque reassertion of the social by way of fascism? Will it continue to mirror plutocratic states like China and Russian? Or will democracy be strengthened by subsuming the economy beneath healthy social principles which require an interested, voting public? The choice is ours (I hope), and a populist, progressive agenda embodied by an attendant movement is required to realize it.
Before getting into the details, I simply love that Kuttner is making Polanyi’s thought accessible and available to the 21st century reader. Reading ‘The Great Transformation’ was a big moment for me. If Kuttner’s book results in more people reaching for Polanyi, this alone is a tremendous public service.
Anyway, there are some interesting points in CDSGC which go against conventional wisdom, particularly the “wisdom” which sought to remedy the stagflation of the 1970s. Broadly speaking, this is none other than the infamous economic philosophy that the most important issues to establish sound economies are balanced budgets and slowing inflation to a crawl.
Rather than a result of “uncompetitive” wages due to labor power, the problems of the 1970s were the result of changes in the global economy. Asian exports were subsidized, while Asian markets were closed to U.S. exports. European leaders, meanwhile, had their own protections on their internal market. This system did much to integrate Asian and European economies into the global capitalist system… yet, for all intents and purposes, this resulted in a landslide power shift from labor to capital. Now, my more cynical side thinks that this was a deliberate act by a class of people to wrest power from the working majority. Yet, perhaps it was more of a diplomatic act than an act of class warfare (though I’m sure this was always a nice “perk” for the capitalist class!). After all, in a world split between capitalist and communism hemispheres, America did all it could to make capitalism an attractive system to other nations so that they could resist the temptation of communism… whatever the major driving factor, in this process America betrayed its constituency.
And it was not just capital which betrayed labor, but *labor* which betrayed workers. Despite the high levels of union membership, labor militancy had been sapped in the post-war era… not, at first, by an outright attack on unions, but by their initial *institutionalization* through the Taft-Hartley Act which undermined the ability of unions to act as a counterweight to the excesses of capital. Unions would no longer be agitators, but partners in the corporate structure, nominally representing labor, yet not causing too much of a fuss so long as their members were taken care of within their respective corporate structures. By the time outright attacks on labor would occur in the 70s and beyond, unions had lost their sway as an actual social *movement* and were thus crippled in their ability to fight back cuts in staff, wages, and amenities. This is an interesting point that I don’t hear being argued enough.
In any case, these subtleties which arose in the 70s were not recognized by the Carter administration, which drank the supply-side kool-aide and cut capital gains taxes almost in half! This was the beginning of the end of creative, democratic solutions to economic problems. We know the story from here—austerity, balanced budgets, more austerity, more balanced budgets, &c… the result being a decaying public infrastructure. Not even Social Security could be saved. The irony of SS was that Reagan intended to fund the program on payroll taxes, a calculation which predicted increases in wages… yet the increases in wages never came (as we know) and we are woefully short in providing benefits to retiring boomers as a result.
After decades of supply-side nonsense, we’re still acting the classic madman who thinks that if we just do the same thing *this* time, maybe it’ll turn out differently.. maybe *this* time, if we rectify deficits, confidence will return to the market in such a way that wealth is spread to all sectors of society… yet we never see this in a manner that can be sustained longer than boom/bust cycles. Problems such as flat wages and indebted households, for instance, remain. Only public investment to stimulate social income (after FDR) can overcome problems like these. The alternative is growing inequality, a growing sense of unfairness, more outrage, more anger, and more of the sort of thing that got Trump elected. And no amount of corporate responsibility or NGO programs will solve this. Political questions need political answers. Kuttner says that,
“[…] these are non-state, market-driven strategies that rely entirely on market forces to achieve social goals. This is quite the opposite of Polanyi’s sensibility, since it acknowledges and even reinforces the hegemony of markets as the mechanism for making decisions required by systematic market failures.”
Above all, these market “solutions” involve a picture of the constituent as a consumer rather than a citizen. The difference is that only the *citizen* elects a government… the only polity able to challenge sociopathic corporate behavior. The sort of normative pressure that consumers place on corporate behavior is simply not enough.
Kuttner is under no illusions that we have an easy task before us—a strict policy program which seeks to change society on the national level will inevitably come up agains the powerful interests of global capital. Yet, Kuttner believes that (unlike other primarily economic bodies like the European Union) the United States is in a unique position to lead the way in changing the face of how we manage to govern in a global world. Much of this is because the U.S. itself is responsible for instituting a global economic program, integrating nations into the global economy since the post-war period through initiatives like the Marshall Plan. Like no other nation we are poised to instigate changes in global governance via national programs which require economic decision making to be responsible to the social arena rather than beholden to growth and profit targets.
In short, America, like no other nation, has the power to make a choice of international consequence. Will it meet economic grievances through a caricaturesque reassertion of the social by way of fascism? Will it continue to mirror plutocratic states like China and Russian? Or will democracy be strengthened by subsuming the economy beneath healthy social principles which require an interested, voting public? The choice is ours (I hope), and a populist, progressive agenda embodied by an attendant movement is required to realize it.
March 11, 2020
Finished this a while ago and thought I'd reviewed it already. Oh, well.
There's a lot of good information in here. Especially if you need an intro-going-on-intermediate guide to the inherent problems of capitalism. Great analysis and history. A little complex but not too complex. Not full of fun or engaging examples but very informative, precise, does not mince words. I feel like portions of it should be required reading.
I do not recommend the audiobook narrated by Mike Chamberlain. It's read without emotion and he seems to be yelling the whole book into the microphone. Read the text instead.
There's a lot of good information in here. Especially if you need an intro-going-on-intermediate guide to the inherent problems of capitalism. Great analysis and history. A little complex but not too complex. Not full of fun or engaging examples but very informative, precise, does not mince words. I feel like portions of it should be required reading.
I do not recommend the audiobook narrated by Mike Chamberlain. It's read without emotion and he seems to be yelling the whole book into the microphone. Read the text instead.
Read
May 16, 2018 This is an incredible book that takes the reader through various administrations in the U.S. and Europe and tells how they handled the various threats to society that Global Capitalism (or Unregulated Capitalism) has always presented.
The Roosevelt administration (FDR) is the gold standard for how Capitalism can be regulated to serve the public good. (What current Democratic leader could say as FDR did about Banksters - "I welcome their hatred.") Because of FDR's strong leadership and the passing of his economic philosophy on to Truman, Eisenhower, Kennedy and to a point Johnson, the U.S. and Europe experienced an unprecedented era of economic success for all strata of society. This was managed because FDR and his successors had kept the reckless Financial sector of the economy in check. The Glass-Steagall Banking Bill helped keep the Financial adventurers from sabotaging the economy as they did in the 1920's and in 2008.. It was this bill that was chipped away in the Clinton Administration, by a President who no longer respected FDR's successful policies.
The FDR legacy began to come apart in the 1970's through two things that were unrelated to FDR's policies or the Keynesian philosophy that they were based on: The Arab Oil shocks and the policies of Nixon's Treasury Secretary Burns. Nixon's policies crashed the Bretton-Woods International agreements that had laid the foundation of cooperation in U.S. - Europe economic relationship.
With the election of Reagan, any demons that were still left in Pandora's Box were let out. The reckless Financial wrecking crew were again in the drivers seat. Bush senior put the pedal to the medal. When a Democrat was eventually elected, Bill Clinton, he decided that he would mimic the Republican Financial model. He choose Robert Rubin, one of the main villains of this book, as his treasury secretary. Obama would later choose Rubin protegees for his Treasury Secretary. Hilary Clinton, if she had been elected, would no doubt have gone with a Wall Street friendly Treasury secretary also.
The election of Trump can only lead back to a 'wild west' scenario, where all regulations on the Financial sector will be undone.
The author predicts that a return to the FDR model could be possible if a Progressive Democrat would win in 2020. I am less hopeful. I believe that going forward, Democrats need to be mindful of the unsustainability of our current debt. Progressives need to introduce legislation that can be funded without more deficit spending. I'm not certain the Democratic party is up to the task, but, sadly, there are no realistic alternatives.
The Roosevelt administration (FDR) is the gold standard for how Capitalism can be regulated to serve the public good. (What current Democratic leader could say as FDR did about Banksters - "I welcome their hatred.") Because of FDR's strong leadership and the passing of his economic philosophy on to Truman, Eisenhower, Kennedy and to a point Johnson, the U.S. and Europe experienced an unprecedented era of economic success for all strata of society. This was managed because FDR and his successors had kept the reckless Financial sector of the economy in check. The Glass-Steagall Banking Bill helped keep the Financial adventurers from sabotaging the economy as they did in the 1920's and in 2008.. It was this bill that was chipped away in the Clinton Administration, by a President who no longer respected FDR's successful policies.
The FDR legacy began to come apart in the 1970's through two things that were unrelated to FDR's policies or the Keynesian philosophy that they were based on: The Arab Oil shocks and the policies of Nixon's Treasury Secretary Burns. Nixon's policies crashed the Bretton-Woods International agreements that had laid the foundation of cooperation in U.S. - Europe economic relationship.
With the election of Reagan, any demons that were still left in Pandora's Box were let out. The reckless Financial wrecking crew were again in the drivers seat. Bush senior put the pedal to the medal. When a Democrat was eventually elected, Bill Clinton, he decided that he would mimic the Republican Financial model. He choose Robert Rubin, one of the main villains of this book, as his treasury secretary. Obama would later choose Rubin protegees for his Treasury Secretary. Hilary Clinton, if she had been elected, would no doubt have gone with a Wall Street friendly Treasury secretary also.
The election of Trump can only lead back to a 'wild west' scenario, where all regulations on the Financial sector will be undone.
The author predicts that a return to the FDR model could be possible if a Progressive Democrat would win in 2020. I am less hopeful. I believe that going forward, Democrats need to be mindful of the unsustainability of our current debt. Progressives need to introduce legislation that can be funded without more deficit spending. I'm not certain the Democratic party is up to the task, but, sadly, there are no realistic alternatives.
October 16, 2019
An interesting if difficult reading. Without a background in economics, I cannot adequately comment on Kuttner's arguments. Furthermore, Kuttner is writing an economics book that is accessible to the masses. It is an attempt to dumb down a complicated interchange of subjects. Lastly, in contrast to what other reviewers have said, he has a clear bias in his book. I agree with his bias and that further compromises my ability to offer an objective review.
The book begins with a muddle of chapters that overwhelm readers in the first three chapters with a random assortment of arguments and facts. Kuttner leaps through time and space in a seemingly incoherent narrative that tries to introduce the topics of Democracy, economics-globalization, geo-political environments since the American Civil War, and more. If readers can trudge through those chapters the rest of the book is easier to digest.
The bulk of the book is divided by topic, things like labor in Europe; labor in America, social contract in Europe, etc. It helps that Kuttner generally maintains focus in these chapters and follows events chronologically - two qualities that are not readily apparent in the introduction. In each chapter he comes back to the basic conclusion that capitalism (globalization) is not the inherent threat to democracy. The inherent threat is a lack of regulating capitalism.
I firmly believe there are valid argument for and against regulation. Kuttner takes a hardline approach in support of regulation. The result of his stance is that much of the book attacks Republicans while criticizing Democrats. By his own admission, this book focuses on 2007-2016. The GOP has no platform or ideology. Again, I am receptive to this strain in his book. I strongly support many of his proposed remedies such as regulating finance, enforcing antitrust legislation, diplomatically neutralizing tax shelters, and blocking business from tax haven shopping. Broader wish list items like building manufacturing to 25% of the economy and imposing social tariffs on imports from totalitarian regimes also sound like great ideas if pipe dreams.
Overall, it is an interesting research project. I am not convinced that he has established the connection between democracy and globalization, even if I am receptive to his arguments. Although he tries to simplify complicated concepts, he may have dumbed them down too much. I am left with a sense that I agree with Kuttner; but I cannot explain why. I can only cherry pick certain facts and general threads. When combined with an obvious bias, I have some skepticism towards the book as a whole.
The book begins with a muddle of chapters that overwhelm readers in the first three chapters with a random assortment of arguments and facts. Kuttner leaps through time and space in a seemingly incoherent narrative that tries to introduce the topics of Democracy, economics-globalization, geo-political environments since the American Civil War, and more. If readers can trudge through those chapters the rest of the book is easier to digest.
The bulk of the book is divided by topic, things like labor in Europe; labor in America, social contract in Europe, etc. It helps that Kuttner generally maintains focus in these chapters and follows events chronologically - two qualities that are not readily apparent in the introduction. In each chapter he comes back to the basic conclusion that capitalism (globalization) is not the inherent threat to democracy. The inherent threat is a lack of regulating capitalism.
I firmly believe there are valid argument for and against regulation. Kuttner takes a hardline approach in support of regulation. The result of his stance is that much of the book attacks Republicans while criticizing Democrats. By his own admission, this book focuses on 2007-2016. The GOP has no platform or ideology. Again, I am receptive to this strain in his book. I strongly support many of his proposed remedies such as regulating finance, enforcing antitrust legislation, diplomatically neutralizing tax shelters, and blocking business from tax haven shopping. Broader wish list items like building manufacturing to 25% of the economy and imposing social tariffs on imports from totalitarian regimes also sound like great ideas if pipe dreams.
Overall, it is an interesting research project. I am not convinced that he has established the connection between democracy and globalization, even if I am receptive to his arguments. Although he tries to simplify complicated concepts, he may have dumbed them down too much. I am left with a sense that I agree with Kuttner; but I cannot explain why. I can only cherry pick certain facts and general threads. When combined with an obvious bias, I have some skepticism towards the book as a whole.
September 6, 2020
One of the most important and cogently written works addressing the world-wide crises of democratic states, Robert Kuttner directly ties unregulated global capitalism to the economic inequality and social discord so prevalent today. He does a wonderful job summarizing his findings in his Preface. The words below are taken directly from his book.
Highly recommended if you wish to better understand how we got to today's present mess.
The Preface
“A quarter century ago in the glow of post communist triumphalism, many were predicting that globalization would link democracy with capitalism in a splendid convergence. Instead, we are witnessing a primitive backlash against both the global market and liberal democracy.
“…Democracy itself is under siege.
“…Autocrats are using the forms of democracy to destroy the substance.
“…This ultranationalist reaction is compounded by resentment of immigrants and refugees, as well as resurgent racism. But the fundamental driver of these trends is the resurrection of heedless, globalized capitalism that serves the few, damages the many, and breeds antisystem politics.
“The Argument of This Book
“My purpose in writing this book is to connect the dots between the rise of right-wing populism and the fall of a social contract that once served the broad citizenry in Western democracies. The story has five key elements.
“First, the postwar era was exceptional in the history of capitalism. It was the result of a fortuitous convergence of events that constrained finance and shifted power to organized workers and democratic governments….
“The postwar social contract, with national variations, demonstrated that a social form of contained capitalism could be successful economics… But that era has given way to one alarmingly like the 1920s, and with similar repercussions. A decent political economy is still possible, but it will again require an exceptional politics.
“Second, …nothing in the structure of the late-twentieth-century economy compelled a reversion to an unregulated nineteenth-century market. This was a political shift….
“Third, the dominant role of the US during and after World War II is central both to the creation and the destruction of a decent economy. In the early 1940s, America was in a a rare progressive mood… When American government turned back into an ally of finance beginning in the 1970s and continuing emphatically in the 1980s, its goals for the global system also reversed.
“Fourth, today’s version of globalization is profoundly antidemocratic. On one flank, the popular revulsion against the results of globalization is elevating antidemocratic leaders, parties, and ultranationalist sentiments….
“The fifth and final observation concerns the collapse of the democratic left…. Social democratic parties across Europe have lost support as much of their working-class base has defected to the far right….
“All of this muddled politics. Today, large numbers of citizens throughout the West are angry that the good life is being stolen from them. They are not quite sure whom to be angry at — immigrants, corporations, the government, politically correct liberals, the rich, the poor? The anger is both unfocused and inchoate, but increasingly articulated by a neofascist right….
“But recent events signal something worse. The threat to democracy is increasingly within the West.
“The Dance of Democracy and the Market
“Our deeper story is about the fraught relationship between socially bearable capitalism and robust democracy. When the system is in balance, strong democracy tempers market forces for the general good, in turn reinforcing democratic legitimacy…
“…To the extent that democracy requires taming of the market, globalization weakens that endeavor. Today’s globalization undermines national regulatory authority…Quasi-governmental global organizations, like the International Monetary Fund and the World Trade Organization, are far less transparent and less accountable than their domestic public counterparts, and easier for corporate elites to capture and dominate. Globalization tends to alter the political distribution of power domestically, and to increase the influence of elites who favor more laissez-fairy and more globalization, so the process feeds on itself.
“A key aspect of the postwar system was the very tight regulation of finance, which remained mostly private but was turned into something close to a public utility…
“…Globalization was a key vector in the transmission of neoliberal policies and values. New global rules not only restored the ability of finance to operate speculated across national borders, but undermined the capacity of national governments to regulate it. Globalization helped to restore the temporarily suppressed political power of corporate and financial elites, as well as their wealth….
“The fact that the far-right backlash is occurring in nearly all Western nations at the same time is no coincidence, nor is it accidental contagion. It is a common reaction against the impact of globalization on the livelihoods of ordinary people. The resulting sentiments produce a politics that is sullen, resentful, and perverse, further undermining democracy. Elites have won the policy debates but have lost the citizenry.
“Far-right sentiments are always lurking around the fringes of society, but when democracy does a good job of managing capitalism, they remain at the fringe. When capitalism overwhelms democracy, we get the al-right with a friend in the White House….
“Globalization also accelerates cross-border movements of people… Migrants, often poor and often scorned, are outside national social contracts; they are nonparticipants in national democratic deliberation, and vulnerable to both exploitation and retribution….
“In the democracies government and politics are hobbled by a seemingly opposite but complementary problem — paralysis in the face of escalating problems…. This blockage, also reminiscent of the 1920s, discredits government and invites Caesarism….
“…In some idealized world, capitalism may enhance democracy, but in the history of the West, democracy has expanded by limiting the power of capitalists. When that project fails, dark forces are often unleashed….
“…When push comes to shove, the story that capitalism and democracy are natural complements is a myth. Corporations are happy to make a separate peace with dictators — and short of that, to narrow the domain of civic deliberation even in democracies.
“A Polanyi Moment
“The great prophet of how market forces taken to an extreme destroy both democracy and a functioning economy was less Karl Marx than Karl Polanyi. As Polanyi demonstrated in his 1944 masterwork, The Great Transformation, the disembedding of markets from their societies and resulting in attention to social consequences inevitably triggered a reaction. The reaction is more often chaotic and fascistic than politely democratic….
“…Polanyi, like his great contemporary John Maynard Keynes…was an optimist. With the right politics and the right mobilization of democracy, both men believed markets could be harnessed for the common good….
“…Marx [on the other hand] got several big things wrong…. [He] left out nationalism. He left out the fact that the reaction against a predatory capitalism that annihilates social instructions more typically ended in fascism.
Highly recommended if you wish to better understand how we got to today's present mess.
The Preface
“A quarter century ago in the glow of post communist triumphalism, many were predicting that globalization would link democracy with capitalism in a splendid convergence. Instead, we are witnessing a primitive backlash against both the global market and liberal democracy.
“…Democracy itself is under siege.
“…Autocrats are using the forms of democracy to destroy the substance.
“…This ultranationalist reaction is compounded by resentment of immigrants and refugees, as well as resurgent racism. But the fundamental driver of these trends is the resurrection of heedless, globalized capitalism that serves the few, damages the many, and breeds antisystem politics.
“The Argument of This Book
“My purpose in writing this book is to connect the dots between the rise of right-wing populism and the fall of a social contract that once served the broad citizenry in Western democracies. The story has five key elements.
“First, the postwar era was exceptional in the history of capitalism. It was the result of a fortuitous convergence of events that constrained finance and shifted power to organized workers and democratic governments….
“The postwar social contract, with national variations, demonstrated that a social form of contained capitalism could be successful economics… But that era has given way to one alarmingly like the 1920s, and with similar repercussions. A decent political economy is still possible, but it will again require an exceptional politics.
“Second, …nothing in the structure of the late-twentieth-century economy compelled a reversion to an unregulated nineteenth-century market. This was a political shift….
“Third, the dominant role of the US during and after World War II is central both to the creation and the destruction of a decent economy. In the early 1940s, America was in a a rare progressive mood… When American government turned back into an ally of finance beginning in the 1970s and continuing emphatically in the 1980s, its goals for the global system also reversed.
“Fourth, today’s version of globalization is profoundly antidemocratic. On one flank, the popular revulsion against the results of globalization is elevating antidemocratic leaders, parties, and ultranationalist sentiments….
“The fifth and final observation concerns the collapse of the democratic left…. Social democratic parties across Europe have lost support as much of their working-class base has defected to the far right….
“All of this muddled politics. Today, large numbers of citizens throughout the West are angry that the good life is being stolen from them. They are not quite sure whom to be angry at — immigrants, corporations, the government, politically correct liberals, the rich, the poor? The anger is both unfocused and inchoate, but increasingly articulated by a neofascist right….
“But recent events signal something worse. The threat to democracy is increasingly within the West.
“The Dance of Democracy and the Market
“Our deeper story is about the fraught relationship between socially bearable capitalism and robust democracy. When the system is in balance, strong democracy tempers market forces for the general good, in turn reinforcing democratic legitimacy…
“…To the extent that democracy requires taming of the market, globalization weakens that endeavor. Today’s globalization undermines national regulatory authority…Quasi-governmental global organizations, like the International Monetary Fund and the World Trade Organization, are far less transparent and less accountable than their domestic public counterparts, and easier for corporate elites to capture and dominate. Globalization tends to alter the political distribution of power domestically, and to increase the influence of elites who favor more laissez-fairy and more globalization, so the process feeds on itself.
“A key aspect of the postwar system was the very tight regulation of finance, which remained mostly private but was turned into something close to a public utility…
“…Globalization was a key vector in the transmission of neoliberal policies and values. New global rules not only restored the ability of finance to operate speculated across national borders, but undermined the capacity of national governments to regulate it. Globalization helped to restore the temporarily suppressed political power of corporate and financial elites, as well as their wealth….
“The fact that the far-right backlash is occurring in nearly all Western nations at the same time is no coincidence, nor is it accidental contagion. It is a common reaction against the impact of globalization on the livelihoods of ordinary people. The resulting sentiments produce a politics that is sullen, resentful, and perverse, further undermining democracy. Elites have won the policy debates but have lost the citizenry.
“Far-right sentiments are always lurking around the fringes of society, but when democracy does a good job of managing capitalism, they remain at the fringe. When capitalism overwhelms democracy, we get the al-right with a friend in the White House….
“Globalization also accelerates cross-border movements of people… Migrants, often poor and often scorned, are outside national social contracts; they are nonparticipants in national democratic deliberation, and vulnerable to both exploitation and retribution….
“In the democracies government and politics are hobbled by a seemingly opposite but complementary problem — paralysis in the face of escalating problems…. This blockage, also reminiscent of the 1920s, discredits government and invites Caesarism….
“…In some idealized world, capitalism may enhance democracy, but in the history of the West, democracy has expanded by limiting the power of capitalists. When that project fails, dark forces are often unleashed….
“…When push comes to shove, the story that capitalism and democracy are natural complements is a myth. Corporations are happy to make a separate peace with dictators — and short of that, to narrow the domain of civic deliberation even in democracies.
“A Polanyi Moment
“The great prophet of how market forces taken to an extreme destroy both democracy and a functioning economy was less Karl Marx than Karl Polanyi. As Polanyi demonstrated in his 1944 masterwork, The Great Transformation, the disembedding of markets from their societies and resulting in attention to social consequences inevitably triggered a reaction. The reaction is more often chaotic and fascistic than politely democratic….
“…Polanyi, like his great contemporary John Maynard Keynes…was an optimist. With the right politics and the right mobilization of democracy, both men believed markets could be harnessed for the common good….
“…Marx [on the other hand] got several big things wrong…. [He] left out nationalism. He left out the fact that the reaction against a predatory capitalism that annihilates social instructions more typically ended in fascism.
May 30, 2018
An excellent insight into a complex topic. Very well researched and presented in clear, accessible language. .
Kuttner offers details about historical movements I had never heard before. He also lays out very specific suggestions for moving forward
Kuttner offers details about historical movements I had never heard before. He also lays out very specific suggestions for moving forward
May 30, 2018
I've long agreed with almost all of the points made by Kuttner in this book, but I've never had a systematic framework in which to logically relate them. In this book, Kuttner provides that framework. He outlines a history of postwar economics that is both coherent and compelling and draws on Polanyi and Keynes to make sense of why things happened the way they did. His policy recommendations in the last chapter are rational and necessary. The only thing I don't share with Kuttner, however, is his optimism that because they are necessary, they will happen.
December 2, 2018
Everyone ought to read this book.
August 9, 2020
I read the first two chapters of this for the critical theory reading group. The below is assuming Kuttner doesn’t change track in the rest of the book.
The book taught me new historical facts and context but did not teach me new theory. Kuttner is a class reductionist and glorifies the New Deal era. At points he openly disparages various minorities - e.g. for “arguing about toilets”. He fails to account for how social hierarchies cut across capitalism, and how those two systems are intertwined. He fails to acknowledge that the New Deal was built on the (very low paid) back of people of colour, on the unpaid reproductive labour of women and relied on exploitative industries which contributed to our current climate crisis. He fails to acknowledge how growth assumptions embedded in capitalism will constantly work to erode state institutions, meaning any decent level of market regulation and control will always be temporary. How can we possibly maintain a New Deal system without the impetus of war? How can capitalism ever be ‘managed’ when it will always strive to wrest back market ‘freedom’?
A good system shouldn’t be a constant struggle for power reliant on a fragile global convergence of interests. A good system should be self-reinforcing and provide for the needs of people and harmonious environment. Kuttner does not provide a design for this system.
Quotes:
“There is no global lender of last resort, no global financial supervisor, no global antitrust authority, no global tax collector, no global labor relations board, no global entity to enforce democratic rights or broker social contracts”
“International Monetary Fund and the World Trade Organization, are far less transparent and less accountable than their domestic public counterparts, and easier for corporate elites to capture and dominate”
“history doesn’t repeat, but sometimes it rhymes”
“In countries where rulers invoked his name, there was no “dictatorship of the proletariat,” just plain totalitarianism. Most important for our purposes, Marx—in his conjuring of a global proletariat—left out nationalism. He left out the fact that the reaction against a predatory capitalism that annihilates social institutions more typically ended in fascism”
“The institutions often turn out to be more fragile than they first appear, and they require continual renewal”
“On pocketbook issues, wealthy donors, in effect, pay Democrats to abandon their normal instincts to defend workaday voters—to become less like Democrats. For Republicans, reliance on big money reinforces a natural affinity of conservatives, corporations, and laissez-faire economics.
Democratic”
“Bannon favored a large program of public infrastructure, tax increases for the rich, and a get-tough program with China intended to bring home industrial jobs”
“Political associations, to Tocqueville, were “great free schools” of democracy. They breathed civic life into formally democratic institutions of government. To engage with public issues, people did so more effectively in groups, not as isolated individuals”
“In a mass society, there is a loss of institutions of representation or of political voice that connect people to one another. This atomization, in turn, leaves people alienated and primed to embrace dictators. As William Kornhauser wrote, in his classic Politics of Mass Society, Caesarism thrives when people are drawn to totalitarian leaders and “there is a paucity of intervening groups to channelize and filter popular participation in the larger society.” In these circumstances, “mass participation tends to be irrational and unrestrained”
“In addition to the impact of growing income gaps, three trends over the past half century have intensified participatory inequality. First, large mass-membership organizations that once engaged lower- and middle-class Americans in civic and political life have atrophied. Second, an entire habitat of mutual self-help organizations, ranging from unions to local building and loan societies, which also served as a civic training ground and an avenue of influence for the nonrich, have been substantially depleted as well. Finally, the mass entry of women into the labor force without a proportional reduction in the hours worked by most men has deprived localities of civic capital”
“Unions lost membership because of relentless attacks by corporations, the outsourcing of jobs heavily concentrated in unionized sectors, deregulation and privatization, and the shift in the federal government’s role from benign neutrality under Roosevelt and Truman to full-scale assault under Reagan and the Bushes.”
“Why did Democrats move toward the center and Republicans to the far right? Several things occurred. Money became more important in politics. The Democratic Leadership Council, formed by business-friendly and Southern Democrats after Walter Mondale’s epic 1984 defeat, believed that in order to be more competitive electorally, Democrats had to be more centrist on both economic and social issues. As old-fashioned progressive Democrats retired, some were replaced by corporate Democrats. Others were replaced by right-wing Republicans, as the Democratic Solid South gradually became the Republican Solid South, fueled by racial and regional resentment.”
“strategy was to deny Democrats successes on any issue. Under Obama, Republican legislators vowed to vote against the Affordable Care Act, sight unseen. Democrats, meanwhile, viewed themselves as the party of government, “the grown-ups in the room,” and were more inclined to compromise in order to keep government functioning. This asymmetry enabled Republicans to roll Democrats, time after time. The tactic reached an apotheosis under Obama, a leader with a personal affinity for compromise, of which Republicans took full advantage.”
“This politics of deliberate blockage served Republicans in multiple, mutually reinforcing respects. It denied the Democrats successes, even when Democrats held the White House. It seriously hurt both the prestige and the efficacy of government. Since Democrats represent the proposition that affirmative government is needed to serve the people, this was a double setback for them, and a win for the Republican ideology that government is a waste of money.”
“Because working-class people need affirmative government far more than affluent people do, Republican success in creating deadlock undermined politics and government as a balancing mechanism. The cynical Republican strategy of deadlock strengthened the Republican story that government is a hopeless mess. The perceived failures of government served to recruit aggrieved working people first to the Republican Party, then to the Tea Party, and then to Trump.”
“The reign of finance in the 1920s had proved both deflationary and destabilizing—promoting speculation during booms and austerity during busts, and creating protracted unemployment. Joblessness, in turn, fed fascism and pan-European war.”
“They concluded from the ruinous events of the previous decade that fascism grew in the soil of human misery; that laissez-faire capitalism generated depression; that Europe must never again suffer a civil war; and that to fuse these several goals, Europe needed to move in the direction of both a managed form of capitalism and a federation”
“the postwar bargain was built more on a convergence of circumstances than on durable, permanent changes. The bargain proved surprisingly fragile, once capitalists regained their normal, temporarily suppressed powers in a still-capitalist economy”
“History is a blend of deep structural forces and contingent events that can be lucky or unlucky”
“On balance, the formal labor partnership gave labor an institutional role but sapped labor militancy as a social movement. When labor was again under siege in the late twentieth century, that militancy would not be there to draw on”
“The practical experience of labor solidarity offset the social conservatism of much of the working class. The labor movement gives working people a political understanding of class. To this day, union members and their families vote far more progressively than do people with identical demographic and occupational characteristics who are not in unions”
“Roosevelt was able to expand labor regulation, social insurance, and public investment only by guaranteeing the Dixie members of his coalition that nothing in his program would alter the Southern Jim Crow system of white supremacy. Indeed, some of the New Deal actually extended state-mandated segregation to the North, into neighborhoods that had previously been integrated”
“The Southern aristocracy took the world and gave the poor white man Jim Crow,” King said from the steps of the Alabama capitol following the 1965 march from Selma to Montgomery. “And when his wrinkled stomach cried out for the food that his empty pockets could not provide, he ate Jim Crow, a psychological bird that told him that no matter how bad off he was, at least he was a white man, better than a black man”
“the euthanasia of the rentier,” meaning that a modern economy relying on public credit and low interest rates could innovate and achieve full employment without being at the mercy of the whims of stockholders, bondholders, and speculators”
“Keynes’s core insight was that market economies tended to get stuck at levels of output and employment well below their capacity for growth. The international correlate was the tendency of global finance to produce systemic austerity by placing fiscal balance, currency stability, and debt repayment ahead of economic growth. This bias was “pro-cyclical,” producing euphoric booms as finance chased fads, followed by crashes and then recessions or depressions.”
“Keynes’s proposed mechanism was a provision that fined chronic creditors and allowed other nations to “discriminate” (his word) against the exports of creditor nations. In the context of 1944, the only such creditor nation was the United States.”
“To that end, discrimination against imports was expressly permitted when necessary to keep down domestic joblessness, and in the draft charter the ITO’s members made a commitment to domestic policies”
“In theory, the IMF was supposed to provide advances that would allow nations to defend currencies against private speculation. In practice, the actual IMF did little of this, and it later became a leading instrument of the very austerity it was intended to contain”
“World Bank provided only a fraction of the reconstruction aid and aggregate demand that was needed”
“Some economic historians contend that the imperatives of recovery and rebuilding were the core explanation for the stunning revival of postwar Europe.”
The book taught me new historical facts and context but did not teach me new theory. Kuttner is a class reductionist and glorifies the New Deal era. At points he openly disparages various minorities - e.g. for “arguing about toilets”. He fails to account for how social hierarchies cut across capitalism, and how those two systems are intertwined. He fails to acknowledge that the New Deal was built on the (very low paid) back of people of colour, on the unpaid reproductive labour of women and relied on exploitative industries which contributed to our current climate crisis. He fails to acknowledge how growth assumptions embedded in capitalism will constantly work to erode state institutions, meaning any decent level of market regulation and control will always be temporary. How can we possibly maintain a New Deal system without the impetus of war? How can capitalism ever be ‘managed’ when it will always strive to wrest back market ‘freedom’?
A good system shouldn’t be a constant struggle for power reliant on a fragile global convergence of interests. A good system should be self-reinforcing and provide for the needs of people and harmonious environment. Kuttner does not provide a design for this system.
Quotes:
“There is no global lender of last resort, no global financial supervisor, no global antitrust authority, no global tax collector, no global labor relations board, no global entity to enforce democratic rights or broker social contracts”
“International Monetary Fund and the World Trade Organization, are far less transparent and less accountable than their domestic public counterparts, and easier for corporate elites to capture and dominate”
“history doesn’t repeat, but sometimes it rhymes”
“In countries where rulers invoked his name, there was no “dictatorship of the proletariat,” just plain totalitarianism. Most important for our purposes, Marx—in his conjuring of a global proletariat—left out nationalism. He left out the fact that the reaction against a predatory capitalism that annihilates social institutions more typically ended in fascism”
“The institutions often turn out to be more fragile than they first appear, and they require continual renewal”
“On pocketbook issues, wealthy donors, in effect, pay Democrats to abandon their normal instincts to defend workaday voters—to become less like Democrats. For Republicans, reliance on big money reinforces a natural affinity of conservatives, corporations, and laissez-faire economics.
Democratic”
“Bannon favored a large program of public infrastructure, tax increases for the rich, and a get-tough program with China intended to bring home industrial jobs”
“Political associations, to Tocqueville, were “great free schools” of democracy. They breathed civic life into formally democratic institutions of government. To engage with public issues, people did so more effectively in groups, not as isolated individuals”
“In a mass society, there is a loss of institutions of representation or of political voice that connect people to one another. This atomization, in turn, leaves people alienated and primed to embrace dictators. As William Kornhauser wrote, in his classic Politics of Mass Society, Caesarism thrives when people are drawn to totalitarian leaders and “there is a paucity of intervening groups to channelize and filter popular participation in the larger society.” In these circumstances, “mass participation tends to be irrational and unrestrained”
“In addition to the impact of growing income gaps, three trends over the past half century have intensified participatory inequality. First, large mass-membership organizations that once engaged lower- and middle-class Americans in civic and political life have atrophied. Second, an entire habitat of mutual self-help organizations, ranging from unions to local building and loan societies, which also served as a civic training ground and an avenue of influence for the nonrich, have been substantially depleted as well. Finally, the mass entry of women into the labor force without a proportional reduction in the hours worked by most men has deprived localities of civic capital”
“Unions lost membership because of relentless attacks by corporations, the outsourcing of jobs heavily concentrated in unionized sectors, deregulation and privatization, and the shift in the federal government’s role from benign neutrality under Roosevelt and Truman to full-scale assault under Reagan and the Bushes.”
“Why did Democrats move toward the center and Republicans to the far right? Several things occurred. Money became more important in politics. The Democratic Leadership Council, formed by business-friendly and Southern Democrats after Walter Mondale’s epic 1984 defeat, believed that in order to be more competitive electorally, Democrats had to be more centrist on both economic and social issues. As old-fashioned progressive Democrats retired, some were replaced by corporate Democrats. Others were replaced by right-wing Republicans, as the Democratic Solid South gradually became the Republican Solid South, fueled by racial and regional resentment.”
“strategy was to deny Democrats successes on any issue. Under Obama, Republican legislators vowed to vote against the Affordable Care Act, sight unseen. Democrats, meanwhile, viewed themselves as the party of government, “the grown-ups in the room,” and were more inclined to compromise in order to keep government functioning. This asymmetry enabled Republicans to roll Democrats, time after time. The tactic reached an apotheosis under Obama, a leader with a personal affinity for compromise, of which Republicans took full advantage.”
“This politics of deliberate blockage served Republicans in multiple, mutually reinforcing respects. It denied the Democrats successes, even when Democrats held the White House. It seriously hurt both the prestige and the efficacy of government. Since Democrats represent the proposition that affirmative government is needed to serve the people, this was a double setback for them, and a win for the Republican ideology that government is a waste of money.”
“Because working-class people need affirmative government far more than affluent people do, Republican success in creating deadlock undermined politics and government as a balancing mechanism. The cynical Republican strategy of deadlock strengthened the Republican story that government is a hopeless mess. The perceived failures of government served to recruit aggrieved working people first to the Republican Party, then to the Tea Party, and then to Trump.”
“The reign of finance in the 1920s had proved both deflationary and destabilizing—promoting speculation during booms and austerity during busts, and creating protracted unemployment. Joblessness, in turn, fed fascism and pan-European war.”
“They concluded from the ruinous events of the previous decade that fascism grew in the soil of human misery; that laissez-faire capitalism generated depression; that Europe must never again suffer a civil war; and that to fuse these several goals, Europe needed to move in the direction of both a managed form of capitalism and a federation”
“the postwar bargain was built more on a convergence of circumstances than on durable, permanent changes. The bargain proved surprisingly fragile, once capitalists regained their normal, temporarily suppressed powers in a still-capitalist economy”
“History is a blend of deep structural forces and contingent events that can be lucky or unlucky”
“On balance, the formal labor partnership gave labor an institutional role but sapped labor militancy as a social movement. When labor was again under siege in the late twentieth century, that militancy would not be there to draw on”
“The practical experience of labor solidarity offset the social conservatism of much of the working class. The labor movement gives working people a political understanding of class. To this day, union members and their families vote far more progressively than do people with identical demographic and occupational characteristics who are not in unions”
“Roosevelt was able to expand labor regulation, social insurance, and public investment only by guaranteeing the Dixie members of his coalition that nothing in his program would alter the Southern Jim Crow system of white supremacy. Indeed, some of the New Deal actually extended state-mandated segregation to the North, into neighborhoods that had previously been integrated”
“The Southern aristocracy took the world and gave the poor white man Jim Crow,” King said from the steps of the Alabama capitol following the 1965 march from Selma to Montgomery. “And when his wrinkled stomach cried out for the food that his empty pockets could not provide, he ate Jim Crow, a psychological bird that told him that no matter how bad off he was, at least he was a white man, better than a black man”
“the euthanasia of the rentier,” meaning that a modern economy relying on public credit and low interest rates could innovate and achieve full employment without being at the mercy of the whims of stockholders, bondholders, and speculators”
“Keynes’s core insight was that market economies tended to get stuck at levels of output and employment well below their capacity for growth. The international correlate was the tendency of global finance to produce systemic austerity by placing fiscal balance, currency stability, and debt repayment ahead of economic growth. This bias was “pro-cyclical,” producing euphoric booms as finance chased fads, followed by crashes and then recessions or depressions.”
“Keynes’s proposed mechanism was a provision that fined chronic creditors and allowed other nations to “discriminate” (his word) against the exports of creditor nations. In the context of 1944, the only such creditor nation was the United States.”
“To that end, discrimination against imports was expressly permitted when necessary to keep down domestic joblessness, and in the draft charter the ITO’s members made a commitment to domestic policies”
“In theory, the IMF was supposed to provide advances that would allow nations to defend currencies against private speculation. In practice, the actual IMF did little of this, and it later became a leading instrument of the very austerity it was intended to contain”
“World Bank provided only a fraction of the reconstruction aid and aggregate demand that was needed”
“Some economic historians contend that the imperatives of recovery and rebuilding were the core explanation for the stunning revival of postwar Europe.”
June 27, 2018
Excellent political economy analysis of the last 70 years.
May 28, 2019
(Spoiler Alert: No)
In many ways 9/11 and the Iraq War, what almost seemed the defining points of a generation politically, were an aberration, an interruption in the real fight that needed to take place, the fight around globalization. When I was first becoming politically active in the late 90s and 2000-2001, this was it. This is what we were focused on. The ways the financial system had ravaged labor around the world. The ways IMF undermined global sovereignty. Jubilee and the debt relief movement. The Battle in Seattle. This was a major rift that needed to be addressed, a wider battle that needed to happen, the real fission line at the time between the left and the centrists.
Then 9/11 happened, and Afghanistan, and Iraq, and torture, and the fault lines shifted, and these differences were swept under the rug so that we could turn to other fights. There were some who tried to point out that this return to fundamentalism in some regions wasn’t a separate issue, but one of the points where the fight over globalization was playing out. Jihad vs. McWorld—a book I and my co-combatants on the globalization lines had read and reread—enjoyed a brief surge of popularity. But mostly the way that economic policy rather than foreign policy had contributed to the growth in fundamentalism and the current state of affairs was lost in the ensuing discussions.
Much to our detriment, as we readily see now, though, our society’s inability to stay focused on one big problem at a time doesn’t mean that the other issue goes away. And the steady creep of the growth of globalization—partly trade, yes, but even more, finances, investors, and currency speculation—and increase in binding arbitration that limits a state’s sovereignty and ability to course correct through its own policies has continued apace even while our attention was turned elsewhere, leading both to the collapse in 2008 and the rise in right-wing populism we see now.
The growing inequality is a well-known story, or at least it should be. We are in the midst of a roaring economic recovery where wages have stayed primarily stagnant. The country mobilized to save companies and banks, whose CEOs were still allowed to have private jets and massive retirement funds, while the workers saw layoffs and pensions being cut over and over. Recent Oxfam stories have shown that the richest 1% took 82% of global wealth in 2017, while the bottom 50% had nothing. And the world’s richest people have the same wealth as the poorest 50%. Kuttner lays out in painstaking detail how global capitalism, and, even more importantly, an almost complete lifting of constraints on global banking, finance, and other industries who produce nothing other than wealth and paper money, the rentier class, will inevitably lead to this sort of massive inequality, which will lead to dissatisfaction and anger that can turn towards populists, fascists, racists, and others who promise easy solutions and someone to blame. Even more interesting, though, he also explains that it doesn’t have to be this way, outlining the initial efforts after the Great Depression and World War II that constrained finance, empowered labor, and made a strong economy, strong wages, and high employment, an explicit policy goal, leading to a global boom.
Kuttner’s basic thesis is two-fold. One, which I think many left-leaning people would generally agree with, at least in sentiment, is that labor rights should be strengthened, and we should support workers’ rights and human rights around the world. By strengthening labor, and civil society in general, we will have more people engaged in these fights, and people will protect their own interests. Where his theory is likely more controversial is that one of the things labor and civil society must fight for is significant constraints upon capital and the rentier class. He outlines the haven of tax shelters and shell companies that have been developed that provide no benefit except protecting and increasing paper wealth. He shows how the WTO and others do significantly restrain sovereignty in protecting labor rights and raising taxes, but provide no enforceable protections around labor or human rights. Even more troubling, currency speculation allows financers to move their money rapidly, and bankrupt any country that tries to enact leftist policies, thus significantly restricting the possibility of left governments to make changes, making them ineffective and desperate people even more susceptible to arguments that this can be blamed on the powerless—immigrants, racial minority, LGBTQ rights and women—rather than the powerful who others have railed against to no avail. Kuttner sees the growth of these policies as inevitable if finance is not significantly constrained. He seems to agree largely with Adam Smith, who wrote, in Wealth of Nations, “People of the same trade seldom meet together, even for merriment or diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
Kuttner’s book is incredibly well-researched and informative, and provides a wealth of examples from Asia, North America and Europe regarding the success of the post-WWII system, and the strong labor practices in northern Europe, as well as some of the protectionist policies in East Asia in the 90s, as compared to the “free trade” policies of globalization and the growing inequality and pain for consumers and workers that has resulted from financial globalization. He also draws a bright line between this failure of government to be responsive to a rise of ‘illiberal democracies’, popular movements that seem to mirror fascism. It is a troubling, but very convincing, read.
The book has some missteps. Kuttner is focused on the economics and the policies, an area that are too often overlooked—when I was in the globalization battles we focused on the damage WTO, IMF and other institutions did to developing countries, Kuttner is able to update that with the restraints and attacks on sovereignty the WTO has on developed countries, and the EU forced on Greece and others. There are significant echoes of The Shock Doctrine in how many of these destructive policies were put in place during times of trouble and without much input or understanding from others. This is understandable, and it is important to focus on this less understood area. He makes a compelling plea for paying attention to these policies, and constantly emphasizing the politics—who was for popular policies such as Social Security and Medicare at the time, and who was against. It is the only way to keep people allied with progressives, by reminding them of our success.
However, I think he is too dismissive of racial issues. It is not impossible that the significant social progress and compromise of the northern European nations is because of their cultural homogeneity. Racial issues have always played a part in the rise of populism—an in-group and an easily demonized outgroup, rather than turning anger towards the powerful. And within the United States, one cannot ignore the significant impact of racial attitudes. Lyndon Johnson famously said, ” If you can convince the lowest white man that he’s better than the best colored man, he won’t notice you’re picking his pocket. Hell, give him somebody to look down on, and he’ll even empty his pockets for you.” The New Deal was only able to pass because it enshrined certain racist protections. Kuttner waves away racial sentiment and focuses economic anger to explain hostility towards Clinton and support for Trump, but numerous studies have shown that racial sentiment and hostile misogyny are much better predictors of Trump support than economic views. I agree economic anger exacerbates in-group/out-group views such as these, and with his economic criticisms of Hillary Clinton, but one cannot just wave away this reality.
While this is a significant oversight, this is still an incredibly valuable book. The discussion over globalization, the ability to enforce austerity, the downward pressure on wages and environmental and human rights, and binding arbitration that gives unelected and private trading boards greater power than the United Nations are a danger to us all. This reckoning is long in coming, and we have to hope we’re not late to course correct. Read this book and understand these backgrounds. But don’t forget that every voter angry about this has a choice, and we can’t ignore the racism and sexism embedded in every populist leader. Anyone who talks of the pain of workers but understands their hostility to immigrants has a dangerous viewpoint embedded in their argument. We need to address these economic issues, true, but through greater solidarity not less. Non-white workers are suffering even more than others; let’s look to a way to preserve democracy, and the economy for all.
Cross-posted at www.acallidryas.wordpress.com.
In many ways 9/11 and the Iraq War, what almost seemed the defining points of a generation politically, were an aberration, an interruption in the real fight that needed to take place, the fight around globalization. When I was first becoming politically active in the late 90s and 2000-2001, this was it. This is what we were focused on. The ways the financial system had ravaged labor around the world. The ways IMF undermined global sovereignty. Jubilee and the debt relief movement. The Battle in Seattle. This was a major rift that needed to be addressed, a wider battle that needed to happen, the real fission line at the time between the left and the centrists.
Then 9/11 happened, and Afghanistan, and Iraq, and torture, and the fault lines shifted, and these differences were swept under the rug so that we could turn to other fights. There were some who tried to point out that this return to fundamentalism in some regions wasn’t a separate issue, but one of the points where the fight over globalization was playing out. Jihad vs. McWorld—a book I and my co-combatants on the globalization lines had read and reread—enjoyed a brief surge of popularity. But mostly the way that economic policy rather than foreign policy had contributed to the growth in fundamentalism and the current state of affairs was lost in the ensuing discussions.
Much to our detriment, as we readily see now, though, our society’s inability to stay focused on one big problem at a time doesn’t mean that the other issue goes away. And the steady creep of the growth of globalization—partly trade, yes, but even more, finances, investors, and currency speculation—and increase in binding arbitration that limits a state’s sovereignty and ability to course correct through its own policies has continued apace even while our attention was turned elsewhere, leading both to the collapse in 2008 and the rise in right-wing populism we see now.
The growing inequality is a well-known story, or at least it should be. We are in the midst of a roaring economic recovery where wages have stayed primarily stagnant. The country mobilized to save companies and banks, whose CEOs were still allowed to have private jets and massive retirement funds, while the workers saw layoffs and pensions being cut over and over. Recent Oxfam stories have shown that the richest 1% took 82% of global wealth in 2017, while the bottom 50% had nothing. And the world’s richest people have the same wealth as the poorest 50%. Kuttner lays out in painstaking detail how global capitalism, and, even more importantly, an almost complete lifting of constraints on global banking, finance, and other industries who produce nothing other than wealth and paper money, the rentier class, will inevitably lead to this sort of massive inequality, which will lead to dissatisfaction and anger that can turn towards populists, fascists, racists, and others who promise easy solutions and someone to blame. Even more interesting, though, he also explains that it doesn’t have to be this way, outlining the initial efforts after the Great Depression and World War II that constrained finance, empowered labor, and made a strong economy, strong wages, and high employment, an explicit policy goal, leading to a global boom.
Kuttner’s basic thesis is two-fold. One, which I think many left-leaning people would generally agree with, at least in sentiment, is that labor rights should be strengthened, and we should support workers’ rights and human rights around the world. By strengthening labor, and civil society in general, we will have more people engaged in these fights, and people will protect their own interests. Where his theory is likely more controversial is that one of the things labor and civil society must fight for is significant constraints upon capital and the rentier class. He outlines the haven of tax shelters and shell companies that have been developed that provide no benefit except protecting and increasing paper wealth. He shows how the WTO and others do significantly restrain sovereignty in protecting labor rights and raising taxes, but provide no enforceable protections around labor or human rights. Even more troubling, currency speculation allows financers to move their money rapidly, and bankrupt any country that tries to enact leftist policies, thus significantly restricting the possibility of left governments to make changes, making them ineffective and desperate people even more susceptible to arguments that this can be blamed on the powerless—immigrants, racial minority, LGBTQ rights and women—rather than the powerful who others have railed against to no avail. Kuttner sees the growth of these policies as inevitable if finance is not significantly constrained. He seems to agree largely with Adam Smith, who wrote, in Wealth of Nations, “People of the same trade seldom meet together, even for merriment or diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
Kuttner’s book is incredibly well-researched and informative, and provides a wealth of examples from Asia, North America and Europe regarding the success of the post-WWII system, and the strong labor practices in northern Europe, as well as some of the protectionist policies in East Asia in the 90s, as compared to the “free trade” policies of globalization and the growing inequality and pain for consumers and workers that has resulted from financial globalization. He also draws a bright line between this failure of government to be responsive to a rise of ‘illiberal democracies’, popular movements that seem to mirror fascism. It is a troubling, but very convincing, read.
The book has some missteps. Kuttner is focused on the economics and the policies, an area that are too often overlooked—when I was in the globalization battles we focused on the damage WTO, IMF and other institutions did to developing countries, Kuttner is able to update that with the restraints and attacks on sovereignty the WTO has on developed countries, and the EU forced on Greece and others. There are significant echoes of The Shock Doctrine in how many of these destructive policies were put in place during times of trouble and without much input or understanding from others. This is understandable, and it is important to focus on this less understood area. He makes a compelling plea for paying attention to these policies, and constantly emphasizing the politics—who was for popular policies such as Social Security and Medicare at the time, and who was against. It is the only way to keep people allied with progressives, by reminding them of our success.
However, I think he is too dismissive of racial issues. It is not impossible that the significant social progress and compromise of the northern European nations is because of their cultural homogeneity. Racial issues have always played a part in the rise of populism—an in-group and an easily demonized outgroup, rather than turning anger towards the powerful. And within the United States, one cannot ignore the significant impact of racial attitudes. Lyndon Johnson famously said, ” If you can convince the lowest white man that he’s better than the best colored man, he won’t notice you’re picking his pocket. Hell, give him somebody to look down on, and he’ll even empty his pockets for you.” The New Deal was only able to pass because it enshrined certain racist protections. Kuttner waves away racial sentiment and focuses economic anger to explain hostility towards Clinton and support for Trump, but numerous studies have shown that racial sentiment and hostile misogyny are much better predictors of Trump support than economic views. I agree economic anger exacerbates in-group/out-group views such as these, and with his economic criticisms of Hillary Clinton, but one cannot just wave away this reality.
While this is a significant oversight, this is still an incredibly valuable book. The discussion over globalization, the ability to enforce austerity, the downward pressure on wages and environmental and human rights, and binding arbitration that gives unelected and private trading boards greater power than the United Nations are a danger to us all. This reckoning is long in coming, and we have to hope we’re not late to course correct. Read this book and understand these backgrounds. But don’t forget that every voter angry about this has a choice, and we can’t ignore the racism and sexism embedded in every populist leader. Anyone who talks of the pain of workers but understands their hostility to immigrants has a dangerous viewpoint embedded in their argument. We need to address these economic issues, true, but through greater solidarity not less. Non-white workers are suffering even more than others; let’s look to a way to preserve democracy, and the economy for all.
Cross-posted at www.acallidryas.wordpress.com.
July 22, 2023
The disturbing rise of right-wing populism, authoritarianism, ultra-nationalism and even neo-fascism in recent years has received plenty of media attention, but this timely and comprehensive analysis adds a depth and scope that has been lacking up till now.
The author Robert Kuttner is a journalist and editor with a long interest in public policy. His call is for the birth of a progressive populism and the rebirth of strong public institutions to reclaim democracy from a corrosive global hyper capitalism. In recent years, he observes, traditional centre-left parties have so deeply accommodated neoliberalism that hey left their disgruntled traditional constituency with nowhere to turn after their living standards were destroyed by financialisation, globalisation and the marketisation of everything.
“One of the reasons for the rise of the Tea Parties and Donald Trump is the effectiveness of the corporate and libertarian right at disparaging social institutions and at capturing government agencies - and the failure of Democratic administrations to adequately defend things public. Working class voters were left to conclude that nobody was looking after their interests. And they were right.”
His analysis is spot on. The question, as always, is from where - in the face of a hostile corporate media, corrupt mainstream political parties and decaying public institutions -will an effective and robust democratic left emerge?
Could an FDR or Clement Attlee or John Curtin or Michael Joseph Savage succeed in a political climate dominated by Fox News, social media trolls and the Koch Brothers?
Perhaps that’s the subject of another book. But as an analysis of how democracy has been destroyed by unrestrained capitalism, this is hard to beat.
The author Robert Kuttner is a journalist and editor with a long interest in public policy. His call is for the birth of a progressive populism and the rebirth of strong public institutions to reclaim democracy from a corrosive global hyper capitalism. In recent years, he observes, traditional centre-left parties have so deeply accommodated neoliberalism that hey left their disgruntled traditional constituency with nowhere to turn after their living standards were destroyed by financialisation, globalisation and the marketisation of everything.
“One of the reasons for the rise of the Tea Parties and Donald Trump is the effectiveness of the corporate and libertarian right at disparaging social institutions and at capturing government agencies - and the failure of Democratic administrations to adequately defend things public. Working class voters were left to conclude that nobody was looking after their interests. And they were right.”
His analysis is spot on. The question, as always, is from where - in the face of a hostile corporate media, corrupt mainstream political parties and decaying public institutions -will an effective and robust democratic left emerge?
Could an FDR or Clement Attlee or John Curtin or Michael Joseph Savage succeed in a political climate dominated by Fox News, social media trolls and the Koch Brothers?
Perhaps that’s the subject of another book. But as an analysis of how democracy has been destroyed by unrestrained capitalism, this is hard to beat.
November 13, 2024
Takes a lot of boring statistics and facts to get to these conclusions but they are found in the last few chapters…
Globalization increases total surplus but makes redistribution to anything near reasonably equal impossible.
As influence and elections can be bought, growing wealth inequality, an indisputable result of unregulated capitalism, undermines democracy, regardless if overall surplus increases.
Interestingly, liberty can limit equality and vice versa.
With unregulated capitalism and weakening public institutions, partially fueled by globalism, we move towards plutocracy, autocracy, and worse conditions for the masses. Wealthy private institutions and public ones/the masses are competing. Current trajectory has them winning out. But public institutions in the US have been strong and successful in the post war era and can be more effective than private ones (at times). The constitution has been strong so far in regulating and balancing capitalism. If the US can get an effective liberal nationalism/populism running, which is a tough task for sure, they might stand a shot against big $
Globalization increases total surplus but makes redistribution to anything near reasonably equal impossible.
As influence and elections can be bought, growing wealth inequality, an indisputable result of unregulated capitalism, undermines democracy, regardless if overall surplus increases.
Interestingly, liberty can limit equality and vice versa.
With unregulated capitalism and weakening public institutions, partially fueled by globalism, we move towards plutocracy, autocracy, and worse conditions for the masses. Wealthy private institutions and public ones/the masses are competing. Current trajectory has them winning out. But public institutions in the US have been strong and successful in the post war era and can be more effective than private ones (at times). The constitution has been strong so far in regulating and balancing capitalism. If the US can get an effective liberal nationalism/populism running, which is a tough task for sure, they might stand a shot against big $
January 17, 2020
I picked this off the shelf at work simply because the question asked in the title is something that I have been grappling with myself since I came into adulthood in the shadow of the 2008 financial crisis. To my surprise and delight, Kuttner's analysis exceeded my expectation for the clarity of his argument, the quality of his writing and that all-important mixture of realism and cautious optimism about the future.
The first section of the book delves into the history of the global world order as created in the wake of World War II. Kuttner describes the form of egalitarian capitalism crafted by the FDR administration as a "fragile miracle," a creation of both luck and circumstance. The power of labor was cemented for a time when they agreed to no-strike provisions to support the war effort. Government spending for the war created full employment -- something that was extended in part by the Cold War. The 1933 Glass-Steagall Act shackled private finance by divorcing brokerages and investment banks from commercial banking. Negative interest rates and high marginal taxes on the wealthy reduced inequality.
He also lays out the situation in Europe. In Britain for example, strong capital controls and a wartime-sized state are why Britain was able to emerge from the debt of the 1940s with a growing economy and strong welfare state. In the European case, it was understood that the global order included a respect for national protection and regulation of home-grown markets.
The tipping point came in the 1970s, when an economic slump precipitated by OPEC gave financial elites the leverage they needed to push deregulation. The U.S. could have continued a version of its successful form of managed capitalism, but instead chose to follow the self-defeating model pioneered by the British when they were global hegemons by unilaterally pursuing "free trade" in a world where almost nobody else was. The irony of course being that it led to the U.S. usurping the mantle of world leader.
Kuttner makes a really compelling argument comparing how the U.S. deliberately sacrificed its manufacturing sector by refusing to protect it using conventional managed capitalism. We're often fed the line that once the the globalism ball gets rolling, it becomes inevitable and the polity is powerless to resist. But if U.S. politicians have been so powerless at promoting the interests of American manufacturing abroad, what explains the relative success of American moves to deregulate finance?
And if they're successful at deregulating finance abroad, what else could the American juggernaut elect to change should it so choose?
"Today is it not communists, but capitalists, who are seeking to impose a single economic model on the globe. On balance, the institutions of global governance tend to reflect and reinforce rather than challenge that dominance. Globalism has been great at advancing the interests of capital and feeble at defending or enlarging the domain of human rights. The home of democracy -- or antidemocracy -- continues to be the national polity."
Which brings us to modern times. Kuttner picks apart "Third Way" style politics in both the United States and its copycats in Europe. You can argue that pro-capitalist "moderate" politics from the Clinton era through Obama might have been necessary given the political climate of the 80s and 90s, but Kuttner argues they want farther than they needed to. And by betraying the working class, leftward flank of their party they open the door for those same voters to be energized by a xenophobic right-wing.
And then of course Trump, where the book begins and ends. Why did Trump win in 2016? Kuttner lists many factors: Hillary's failure to recognize victims of economic collapse, the replacement of class issues with identity issues, Democrats' obesiance to finance, the self-reinforcing cycle of low voter turnout, the decline of popular groups (especially labor), and Republicans' pursuit of gridlock for the purposes of making government seem worthless.
This was written well before the 2020 primaries spun up, but Kuttner says that a progressive populist left is the only way out of the hole the country is in. You have to offer a concrete public program for disaffected working class workers. You have propose and reinforce public benefits that can restore people's faith in the government. If people find the status quo untenable and your program proposes more of the same (or I suppose in Joe Biden's case, a pledge to go back to 2016), people are going to vote for a change agent.
Buddying up with Wall Street is an impossibility. Finance needs to be strongly restrained. A strong public works program to rebuild American infrastructure and that prioritizes American business could offset some of the ravages of unregulated trade. Again, the fact that politicians have succeeded at deregulating finance abroad shows that we still have power to write the rules if we consider it in our interest.
And maybe most urgently, Kuttner says that this change has to come from the U.S. The European Union as an institution is largely a client of undemocratic global finance. The ability of individual countries to manage their own economies has proven to be stymied -- and not just the Greeces and Spains of the world but France as well. Their flirtation with right-wing fascism is perhaps more justified.
But the U.S. is one country. We can write our own collective rules. So far structural liberal norms have been tested by the Trump administration (and years of erosion by traditional conservative Republicans) but have held. The EU, governed as a body only economically, is vulnerable to the worst of both worlds.
So it's all on us guys! The end result is a book that reads like a pep talk for the progressive left for 2020, but really I think it's objectively fair to say that the stakes are this high and the evidence lined out for the argument are compelling.
The first section of the book delves into the history of the global world order as created in the wake of World War II. Kuttner describes the form of egalitarian capitalism crafted by the FDR administration as a "fragile miracle," a creation of both luck and circumstance. The power of labor was cemented for a time when they agreed to no-strike provisions to support the war effort. Government spending for the war created full employment -- something that was extended in part by the Cold War. The 1933 Glass-Steagall Act shackled private finance by divorcing brokerages and investment banks from commercial banking. Negative interest rates and high marginal taxes on the wealthy reduced inequality.
He also lays out the situation in Europe. In Britain for example, strong capital controls and a wartime-sized state are why Britain was able to emerge from the debt of the 1940s with a growing economy and strong welfare state. In the European case, it was understood that the global order included a respect for national protection and regulation of home-grown markets.
The tipping point came in the 1970s, when an economic slump precipitated by OPEC gave financial elites the leverage they needed to push deregulation. The U.S. could have continued a version of its successful form of managed capitalism, but instead chose to follow the self-defeating model pioneered by the British when they were global hegemons by unilaterally pursuing "free trade" in a world where almost nobody else was. The irony of course being that it led to the U.S. usurping the mantle of world leader.
Kuttner makes a really compelling argument comparing how the U.S. deliberately sacrificed its manufacturing sector by refusing to protect it using conventional managed capitalism. We're often fed the line that once the the globalism ball gets rolling, it becomes inevitable and the polity is powerless to resist. But if U.S. politicians have been so powerless at promoting the interests of American manufacturing abroad, what explains the relative success of American moves to deregulate finance?
And if they're successful at deregulating finance abroad, what else could the American juggernaut elect to change should it so choose?
"Today is it not communists, but capitalists, who are seeking to impose a single economic model on the globe. On balance, the institutions of global governance tend to reflect and reinforce rather than challenge that dominance. Globalism has been great at advancing the interests of capital and feeble at defending or enlarging the domain of human rights. The home of democracy -- or antidemocracy -- continues to be the national polity."
Which brings us to modern times. Kuttner picks apart "Third Way" style politics in both the United States and its copycats in Europe. You can argue that pro-capitalist "moderate" politics from the Clinton era through Obama might have been necessary given the political climate of the 80s and 90s, but Kuttner argues they want farther than they needed to. And by betraying the working class, leftward flank of their party they open the door for those same voters to be energized by a xenophobic right-wing.
And then of course Trump, where the book begins and ends. Why did Trump win in 2016? Kuttner lists many factors: Hillary's failure to recognize victims of economic collapse, the replacement of class issues with identity issues, Democrats' obesiance to finance, the self-reinforcing cycle of low voter turnout, the decline of popular groups (especially labor), and Republicans' pursuit of gridlock for the purposes of making government seem worthless.
This was written well before the 2020 primaries spun up, but Kuttner says that a progressive populist left is the only way out of the hole the country is in. You have to offer a concrete public program for disaffected working class workers. You have propose and reinforce public benefits that can restore people's faith in the government. If people find the status quo untenable and your program proposes more of the same (or I suppose in Joe Biden's case, a pledge to go back to 2016), people are going to vote for a change agent.
Buddying up with Wall Street is an impossibility. Finance needs to be strongly restrained. A strong public works program to rebuild American infrastructure and that prioritizes American business could offset some of the ravages of unregulated trade. Again, the fact that politicians have succeeded at deregulating finance abroad shows that we still have power to write the rules if we consider it in our interest.
And maybe most urgently, Kuttner says that this change has to come from the U.S. The European Union as an institution is largely a client of undemocratic global finance. The ability of individual countries to manage their own economies has proven to be stymied -- and not just the Greeces and Spains of the world but France as well. Their flirtation with right-wing fascism is perhaps more justified.
But the U.S. is one country. We can write our own collective rules. So far structural liberal norms have been tested by the Trump administration (and years of erosion by traditional conservative Republicans) but have held. The EU, governed as a body only economically, is vulnerable to the worst of both worlds.
So it's all on us guys! The end result is a book that reads like a pep talk for the progressive left for 2020, but really I think it's objectively fair to say that the stakes are this high and the evidence lined out for the argument are compelling.
May 23, 2018
Painful read
Ok so I have libertarian tendencies so there is no way I would like this book, but I bought it and read to learn what the socialist concerns are.While the author writes eloquently he does not write coherently. His argument sounds like some sort of Marxist polemic of class warfare. It just doesn’t add up. Might be interesting to see the author debate a real economist, but reading him for hundreds of pages is an unrewarding chore.
Ok so I have libertarian tendencies so there is no way I would like this book, but I bought it and read to learn what the socialist concerns are.While the author writes eloquently he does not write coherently. His argument sounds like some sort of Marxist polemic of class warfare. It just doesn’t add up. Might be interesting to see the author debate a real economist, but reading him for hundreds of pages is an unrewarding chore.
January 12, 2020
Democracy as in the public being free to vote as Kuttner pleases, unless they want to be declared heretics / capitalists and punished for their sin.
September 13, 2019
This book pulls no punches, as Robert Kuttner identifies the guilty parties in the ongoing global heist from the non-rich to the rich. Kuttner even criticizes Thomas Piketty on some points—from a progressive perspective! Here you will find comprehensive documented details showing how business as usual continues, but not in the beneficial way the cheerleaders of the current practices of capitalism would have you believe.
Kuttner goes a little further than other writers who've addressed the problem of government capture by the financial oligarchy (frankly fascism), in that he emphatically prescribes remedies that are primarily political (and not just regulatory). Political transformation is the only way to remove the discrepancy between current government trends of tax cuts for the rich (with reductions in social services, environmental protection, and infrastructure) and consistent public opinion polling indicating preference for freedom from debt that involves universal health care, public education, improved transportation systems, sound ecological practices, and mitigation of extreme inequality.
Effecting such political transformation involves reduction in gerrymandering (or better yet, ranked-choice voting), including workers on corporate boards, and increasing voter participation from its current abysmal levels. (The US Senate remains an enduring non-democratic institution, which was a compromise between the original 13 states in 1787—that situation has long since evolved, and we will have to address the difficult question of apportionment in the Senate if the US is to ever have a truly representative government.) Regardless of the structure of the Senate, voter apathy is a major failure in politics as all levels that must be corrected.
Removing undue influence in elections is a different and looming challenge since the Citizens United decision, which opened the floodgates for all persons (or entities) to exercise their 1st Amendment rights of free speech—as long as you have the money to spend on exorbitant advertising and promotion costs (hint: that's not most of us). Kuttner highlights the critical distinction between a one-person-one-vote system and one-dollar-one-vote system—unfortunately, in practical respects we're currently operating under the latter arrangement. This influence-money goes to manipulate people to vote for candidates and initiatives, based on voters' perceived needs as indicated by data analytics. On the surface, persuasion based on public perception is what political campaigns are all about—but when a critical mass of voters is disengaged and only peripherally paying attention, slight of hand logic and visceral manipulation carry outsized influence. With the vast majority of voters in TL;DR mode regarding politics, a communications means short of wonk level is needed to reach most people on critical issues.
Internationally, Kuttner addresses trans-national rules and norms that formalize private equity leeching—these must be thrown into full reverse. Purchased companies should be nurtured and operated productively, not cannibalized for investor profit. One can already hear the protests to this assertion: "But that's how the system operates!"—that's true, and it must stop! We need a system in which investors have no incentive to cannibalize the economy's underpinnings in order to prosper.
Humans are social animals, who thrive only when we cooperate fairly with one another—Kuttner demonstrates why government, finance, industry, and labor must all be socially responsible in everything they do and demand. Enforced rules (legal or societal) are appropriate to ensure that is the case. A socially responsible tax structure (which we currently do not have) also would go a long way toward this end. Recognizing the humanity of those who are not seen as humans (in the eyes of different and often opposing groups) is an essential element to the cure—this is a reciprocal requirement, from which no one is exempt.
After all its proven-false claims of optimal prosperity, it is actually laissez-faire that is the road to serfdom. Socially responsible Keynesianism is a better road—let's make the requisite political transformation in order to take it.
Kuttner goes a little further than other writers who've addressed the problem of government capture by the financial oligarchy (frankly fascism), in that he emphatically prescribes remedies that are primarily political (and not just regulatory). Political transformation is the only way to remove the discrepancy between current government trends of tax cuts for the rich (with reductions in social services, environmental protection, and infrastructure) and consistent public opinion polling indicating preference for freedom from debt that involves universal health care, public education, improved transportation systems, sound ecological practices, and mitigation of extreme inequality.
Effecting such political transformation involves reduction in gerrymandering (or better yet, ranked-choice voting), including workers on corporate boards, and increasing voter participation from its current abysmal levels. (The US Senate remains an enduring non-democratic institution, which was a compromise between the original 13 states in 1787—that situation has long since evolved, and we will have to address the difficult question of apportionment in the Senate if the US is to ever have a truly representative government.) Regardless of the structure of the Senate, voter apathy is a major failure in politics as all levels that must be corrected.
Removing undue influence in elections is a different and looming challenge since the Citizens United decision, which opened the floodgates for all persons (or entities) to exercise their 1st Amendment rights of free speech—as long as you have the money to spend on exorbitant advertising and promotion costs (hint: that's not most of us). Kuttner highlights the critical distinction between a one-person-one-vote system and one-dollar-one-vote system—unfortunately, in practical respects we're currently operating under the latter arrangement. This influence-money goes to manipulate people to vote for candidates and initiatives, based on voters' perceived needs as indicated by data analytics. On the surface, persuasion based on public perception is what political campaigns are all about—but when a critical mass of voters is disengaged and only peripherally paying attention, slight of hand logic and visceral manipulation carry outsized influence. With the vast majority of voters in TL;DR mode regarding politics, a communications means short of wonk level is needed to reach most people on critical issues.
Internationally, Kuttner addresses trans-national rules and norms that formalize private equity leeching—these must be thrown into full reverse. Purchased companies should be nurtured and operated productively, not cannibalized for investor profit. One can already hear the protests to this assertion: "But that's how the system operates!"—that's true, and it must stop! We need a system in which investors have no incentive to cannibalize the economy's underpinnings in order to prosper.
Humans are social animals, who thrive only when we cooperate fairly with one another—Kuttner demonstrates why government, finance, industry, and labor must all be socially responsible in everything they do and demand. Enforced rules (legal or societal) are appropriate to ensure that is the case. A socially responsible tax structure (which we currently do not have) also would go a long way toward this end. Recognizing the humanity of those who are not seen as humans (in the eyes of different and often opposing groups) is an essential element to the cure—this is a reciprocal requirement, from which no one is exempt.
After all its proven-false claims of optimal prosperity, it is actually laissez-faire that is the road to serfdom. Socially responsible Keynesianism is a better road—let's make the requisite political transformation in order to take it.
November 27, 2018
The author gives an exhaustingly descriptive account of the so-called golden era of capitalism, which took place between the end of the WWII and the abolition of gold standard. This era - labelled as embedded liberalism - was hallmarked by empowered labor unions and restrained financial sector. However, it was lacking any lasting foundations and was greatly contingent on the longevity of U.S. supremacy. The dichotomy of USD was doomed to failure – being the global reserve currency and serving national objectives at the same time. During the 70s, when the state of affairs took an antagonistic turn, the auspicious legacy of Bretton Woods was obliterated.
The overarching global institutions such as OECD, IMF, World Bank and later the European Union were initially intended to facilitate the rapid and enduring recovery from the WWII, while safeguarding the economy from any major hiccups. Up until the 70s, these institutions had been zealous to their original objectives, but the advent of stagflation led to such a severe political turmoil that resulted in the emergence of neoliberalism. The two most notable flagships of the resurgent economic liberalism were the U.S. ( Ronald Reagan) and Great Britain ( Margaret Thatcher). The author argues that these two advocates triggered a sweeping waves of financial deregulation and crackdown on labor unions in the West. The joint pressure of neoliberal political leaders and global institutions demanded among others open markets, significantly lower corporate taxes and deregulated financial markets. Kuttner delves into details about the political and social implications of global capitalism, which took over social democracy. He devotes chapters to prime ministers who attempted to restore the Keynesian social democracy, the rise of right-wing populism as result of distrust in politics, the exploitative nature of the ever-growing conglomerates and the powerless civil groups fighting against them.
From theoretical perspective, the book is built upon the views of John Maynard Keynes, Karl Polanyi and Michal Kalecki. Each of them vehemently promoted the prevalence of mixed economy with the emphasis on the demand-side. The author frequently calls out the proponents of supply-side economics, therefore the book provides a thought-provoking account of the clash between the two major macroeconomic theories.
All in all, if you are into having a macro perspective of what has been happening in politics and economics since the WWII this book can definitely satisfy your need.
The overarching global institutions such as OECD, IMF, World Bank and later the European Union were initially intended to facilitate the rapid and enduring recovery from the WWII, while safeguarding the economy from any major hiccups. Up until the 70s, these institutions had been zealous to their original objectives, but the advent of stagflation led to such a severe political turmoil that resulted in the emergence of neoliberalism. The two most notable flagships of the resurgent economic liberalism were the U.S. ( Ronald Reagan) and Great Britain ( Margaret Thatcher). The author argues that these two advocates triggered a sweeping waves of financial deregulation and crackdown on labor unions in the West. The joint pressure of neoliberal political leaders and global institutions demanded among others open markets, significantly lower corporate taxes and deregulated financial markets. Kuttner delves into details about the political and social implications of global capitalism, which took over social democracy. He devotes chapters to prime ministers who attempted to restore the Keynesian social democracy, the rise of right-wing populism as result of distrust in politics, the exploitative nature of the ever-growing conglomerates and the powerless civil groups fighting against them.
From theoretical perspective, the book is built upon the views of John Maynard Keynes, Karl Polanyi and Michal Kalecki. Each of them vehemently promoted the prevalence of mixed economy with the emphasis on the demand-side. The author frequently calls out the proponents of supply-side economics, therefore the book provides a thought-provoking account of the clash between the two major macroeconomic theories.
All in all, if you are into having a macro perspective of what has been happening in politics and economics since the WWII this book can definitely satisfy your need.
August 27, 2018
If you are interested in understanding the current political morass, Robert Kuttner has written the primer. Meticulously researched, Kuttner traces the rise of the new American oligarchy and the parallel undermining of American democracy. Step by step, you will read how big money interests together with their Republican an Democrat allies, undermined the social safety net and demolished the protective financial regulations that had kept the greed of financial fat cats in check since Roosevelt's New Deal.
The author describes in detail how current American economic policy has become "a race to the bottom." How instead of stimulating democracy and bettering working conditions in other countries making them more like us, American workers are rapidly losing ground and becoming more like them. How globalism, supply side economics, free trade and deregulation have been sold as programs good for America but led directly to the S&L crisis and the 2008 economic meltdown and have actually cost our country 5,000,000 well paying jobs since the 1970's.
Want to know why our country's infrastructure is falling apart and why 40% of the increase in America's GDP since 1970 has gone to the top 1% while working and middle class wages have stagnated? Why is it that working and middle class kids graduate college with a crushing debt burden while all the Republicans talk about is tax cuts for the rich? Read this book.
Many Americans, particularly younger Americans, forgetting or not bothering to study history are unaware that benefits such as the forty hour week, the eight hour day and even such simple perks like bathroom breaks and lunch hours were paid for in blood by the union movement in the 19th century.
There is a broad movement among some of our largest companies to use "independent contractors rather than bringing in new hires as employees. This cynical maneuver is often sold as providing greater worker freedom and flexibility, but these contractors work to a schedule and are often paid less. This allows companies to avoid offering paid vacations, sick time, unemployment insurance, workmen's compensation and social security. Millennials may forget what Santayana said, but they ignore at their peril the words of Richard Nixon: "The American dream does not come to those who fall asleep."
The author describes in detail how current American economic policy has become "a race to the bottom." How instead of stimulating democracy and bettering working conditions in other countries making them more like us, American workers are rapidly losing ground and becoming more like them. How globalism, supply side economics, free trade and deregulation have been sold as programs good for America but led directly to the S&L crisis and the 2008 economic meltdown and have actually cost our country 5,000,000 well paying jobs since the 1970's.
Want to know why our country's infrastructure is falling apart and why 40% of the increase in America's GDP since 1970 has gone to the top 1% while working and middle class wages have stagnated? Why is it that working and middle class kids graduate college with a crushing debt burden while all the Republicans talk about is tax cuts for the rich? Read this book.
Many Americans, particularly younger Americans, forgetting or not bothering to study history are unaware that benefits such as the forty hour week, the eight hour day and even such simple perks like bathroom breaks and lunch hours were paid for in blood by the union movement in the 19th century.
There is a broad movement among some of our largest companies to use "independent contractors rather than bringing in new hires as employees. This cynical maneuver is often sold as providing greater worker freedom and flexibility, but these contractors work to a schedule and are often paid less. This allows companies to avoid offering paid vacations, sick time, unemployment insurance, workmen's compensation and social security. Millennials may forget what Santayana said, but they ignore at their peril the words of Richard Nixon: "The American dream does not come to those who fall asleep."
September 10, 2018
Kuttner lays out the rot infecting our democracy, and other world democracies, and traces a direct line to the not-so-hostile takeover of our parties by the financial system and bankers. The prose is clean and not hurt by technical analyses that would hamper other career men in the field. The last two chapters, dealing with our modern fascists and solutions is a bit more disjointed than the rest -- not to mention I think his appraisal of the US system and opportunities for Democratic victory are not even cynical enough -- but it doesn't take away from an excellent piece of timely and practical scholarship. This should be read by every single member of Congress. As for the laypersons out there who, like me, are trying to make heads or tails of what we face and we got here, I would pair this Achieving Our Country by Richard Rorty, The True and Only Heaven by Chris Lasch, Invisible Hands by Kim Phillips-Fein, and Dark Money by Jane Mayer to get a full picture of our crisis and its origins. Of all of them, Kuttner does the most in not just detailing the How, but the How-To (ie what it will take to fix our broken engine of state). Devastating problems to drown yourself in, but if you read all of them you'll leave with a fuller understanding, and from that can join in in finding a solution. If everyone digested what's in here, we'd go a long way to digging out.
July 2, 2018
I bought this book because I wanted to understand what makes China such a bad actor in global trade, but I've come away from it with a better understanding of what is happening with capitalism/democracy and a different perspective on government. I've thought of government as primarily the deliverer of services and security (defense), but, while government is those things, it is also the economy. Democracies tend to be capitalist economies; and if they do not deliver full-employment and upward mobility, they tend to become autocratic plutocracies. Europe in the 1930s. WWII gave European countries the opportunity to create governments that controlled capitalism for the people--some of them became liberal socialists--and until the regulation protections began to break down in the 1980s (starting with Ronald Regan in the US), the governments worked and wealth was reasonably evenly distributed. Donald Trump is the result of the breakdown of managed capitalism and uneven wealth distribution. Kuttner concludes that we need progressive democrats that know how to manage the economy for the people, not for the Koch brothers, but that is going to take a very active and engaged electorate.
July 24, 2018
An excellent economic history of how we got to the economy we have today. It bears little resemblance to the post-WWII halcyon days when all economic classes were rising equally higher. Kuttner explains how the public policy framework from those times created this shared prosperity and what policy changes have come along to take it away. It is an excellent and accessible analysis in really narrative form. He does not over-burden the reader with numbers and statistics. Just enough to add context.
I am not optimistic about the U.S. way forward, nor am I sure that Kuttner is either (probably influenced my four star rating instead of five). The necessity of robust and nearly perfect leadership required to inspire and instruct and lead us to a mixed economy of "managed" capitalism (to enhance the Common Good) may no longer exist in our society. And even if it is there, can it compete with the forces of greed? I have my doubts, but at least here there is a decent road map as a guide as to what "should" happen. Essential reading for politicos and politico groupies.
I am not optimistic about the U.S. way forward, nor am I sure that Kuttner is either (probably influenced my four star rating instead of five). The necessity of robust and nearly perfect leadership required to inspire and instruct and lead us to a mixed economy of "managed" capitalism (to enhance the Common Good) may no longer exist in our society. And even if it is there, can it compete with the forces of greed? I have my doubts, but at least here there is a decent road map as a guide as to what "should" happen. Essential reading for politicos and politico groupies.
September 8, 2023
Kuttner, Robert - Can Democracy Survive Global Capitalism?
Robert Kuttner delves into the darker realities of Brexit, Trump, betrayals by the Left, emasculation of unions.
Although I think our current situation began in the 1980’s, he suggests the 70’s, with the OPEC stranglehold and spiking inflation.
Those, and increasingly powerful corporations cooking the financial books, reassigning permanent or full time employees to temp or part time, off-shoring jobs, and more.
He takes note of frustration and discontent of the losers, and the votes of rage and anger which propel demagogues and punishing austerity.
There is a chapter on what society ought to do. Personally, I cannot fathom how policy will reverse the social drift into Saltstraumen.
I am concerned for Millennials, often little more than a punchline from the contemptuous, and their slender opportunities for a fair chance at a decent future.
Robert Kuttner delves into the darker realities of Brexit, Trump, betrayals by the Left, emasculation of unions.
Although I think our current situation began in the 1980’s, he suggests the 70’s, with the OPEC stranglehold and spiking inflation.
Those, and increasingly powerful corporations cooking the financial books, reassigning permanent or full time employees to temp or part time, off-shoring jobs, and more.
He takes note of frustration and discontent of the losers, and the votes of rage and anger which propel demagogues and punishing austerity.
There is a chapter on what society ought to do. Personally, I cannot fathom how policy will reverse the social drift into Saltstraumen.
I am concerned for Millennials, often little more than a punchline from the contemptuous, and their slender opportunities for a fair chance at a decent future.
March 6, 2025
I agree with many of the reviewers. The first few chapters are a slog and filled with so much detail and jargon to make it difficult to understand. However as Kuttner moves into the historical underpinnings of how capitalism insidiously undermines democracy he finds his stride. Overall I view this as a fascinating read and encourage anyone who wants a more nuanced understanding of the imbroglio of the modern day neoliberal philosophy and how that may invariably lead to fascism.
Key take aways:
1. The collapse of the Brenton Wood agreement was the beginning of the end in reigning in global capitalism
2. Ineffective neoliberal policies that favor financial institutions inevitably lead to wealth inequality which paradoxically leads to fascism not progressivism
3. Political solutions to drive equality is essential for a healthy democracy. This only works by reigning in capitalism which is exploitative by design.
Key take aways:
1. The collapse of the Brenton Wood agreement was the beginning of the end in reigning in global capitalism
2. Ineffective neoliberal policies that favor financial institutions inevitably lead to wealth inequality which paradoxically leads to fascism not progressivism
3. Political solutions to drive equality is essential for a healthy democracy. This only works by reigning in capitalism which is exploitative by design.
April 23, 2020
An excellent political, economic and historical insight into how capitalism has evolved into its predatory form, that promotes wealth concentration and inequality. Kuttner does a great job providing an unbiased recount on how political ideologies, particularly of the Democratic Party's, have evolved over time due to the rising influence of capitalist interest, resulting in a 'center-right' outlook. He contends that this in turns presents no real distinction between the two dominant parties vying for control in the US.
While Kuttner did explain how a mixed-economy - where capitalism is controlled, in the post-war period lead to unprecedented economic growth and employment, I felt he could have articulated further how a mixed-economy, if implemented during the current time period, could lead to greater societal good.
While Kuttner did explain how a mixed-economy - where capitalism is controlled, in the post-war period lead to unprecedented economic growth and employment, I felt he could have articulated further how a mixed-economy, if implemented during the current time period, could lead to greater societal good.
August 24, 2018
Cogent look at economics since WW2. He details how global capital was restrained for three decades after and how it worked for the majority of workers in Europe and America. Similar to Piketty in some ways, but where Piketty sees these three decades as being due to wealth being lost in the war and it being a temporary egalitarian period, Kuttner sees this as being driven by politics that could still be possible if harnessed.
He's persuasive in showing how unrestrained Capitalism can unleash a far-right populist ideology once workers start feeling let down by circumstances and points a finger at Democrats who were more interested in globalization and markets than decent-paying jobs for their own constituents. Definitely worth a read.
He's persuasive in showing how unrestrained Capitalism can unleash a far-right populist ideology once workers start feeling let down by circumstances and points a finger at Democrats who were more interested in globalization and markets than decent-paying jobs for their own constituents. Definitely worth a read.
August 5, 2019
This is one of the most life changing books I have ever read. Kuttner's detailed breakdown of the history of our national and global economic systems and their impact on government, laws and most importantly, people is profound and led to some major thinking on my part with a commensurate solidification of a number of opinions and attitudes I already harbored.
One may pick fault with his conclusions or more specifically what he advocates on how to resolve or at least improve our current economic situation but much of what he sets down in historical research is on the money in my view.
I normally have little interest in economics but I heard of this book on a news program and was very glad I acquired it.
One may pick fault with his conclusions or more specifically what he advocates on how to resolve or at least improve our current economic situation but much of what he sets down in historical research is on the money in my view.
I normally have little interest in economics but I heard of this book on a news program and was very glad I acquired it.
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