Robert Reich on Why Capitalism Needs Saving
Economic inequality is shaping up to be one of the central debates of the 2016 election: Those on the left – most notably Bernie Sanders – decry the increasing wealth and power of those at the very top of the economy, while others are left behind. Those on the right respond that this upswing in inequality, however regrettable it might be, is the natural result of free markets.
Few have looked at this issue as closely as political economist and former Labor Secretary Robert Reich. In his new book, Saving Capitalism: For the Many, Not the Few, he tackles this obsession with free markets. He argues that there is no such thing as a free market, and that the basic rules of capitalism – laws surrounding property, monopoly, contract, bankruptcy and enforcement – are really driving inequality.
Rolling Stone recently spoke with Reich about his book, the rise of populists like Bernie Sanders and Donald Trump in the presidential race and the legacies of the Obama and Clinton years.
You called your book Saving Capitalism. Why does capitalism need saving, and why is it worth saving?
Those are the two questions I’ve been getting on the book tour. One group of people says, “Why do you suppose it needs saving? It’s perfect.” And another group says, “Why do you want to save it? It’s so rotten.”
This reveals a fundamental misunderstanding of the global economy and also the American economy. Even democratic socialist countries like Denmark and Sweden are fundamentally capitalist in terms of how they’re organized. Even communist China is moving toward capitalism. Capitalism is going to become the universal system of economic organization. The real issue isn’t capitalism versus some other “ism.” The real issue is whether capitalism is organized for the benefit of the society as a whole or for the benefit of a small group at the top. That’s really what we ought to be debating.
In the United States, we’ve fallen into a trap of thinking that on the one side there’s a free market, and on the other side there’s government, and that’s the choice we have to make. But in fact you can’t have a free market without government setting the rules.
Your book is focused on the idea that the term “free market” is a false distraction, and a harmful one at that. Why is that?
This idea forces us to make a choice that is not the central choice at all. Our system is a market with rules that are set by administrations, agencies, legislators and judges and then continuously set and reset almost every day in thousands of ways. The real issue we need to keep our eye on is who benefits from these rules, and who is having the most influence in making them. The classical, interminable debate we’ve got ourselves into between government and the so-called free market is a distraction from this more fundamental question that we ought to be raising and that I’m trying to raise in this book.
Robert Reich on Why Capitalism Needs Saving, Page 1 of 5