Saving Capitalism: For the Many, Not the Few by Reich Robert B

Author:Reich, Robert B. [Reich, Robert B.]
Language: eng
Format: epub
Tags: Politics, Business, History, Philosophy, Sociology
ISBN: 9780385350570
Amazon: 0385350570
Goodreads: 24338377
Publisher: Knopf
Published: 2004-01-01T08:00:00+00:00

17

The Threat to Capitalism

America has faced similar questions before. During eras of significant technological change, workers are typically displaced, social systems become destabilized, and the economy goes through rapid cycles of boom and bust. The owners of capital often reap vast rewards, financial elites gain ground, and economic and political power become highly concentrated. Notwithstanding the potential of the new technologies to create broad-based prosperity, the prevailing political and economic systems do not deliver it because those at the top gain increasing control over politics. Large numbers of people understandably feel the game is rigged. These anxieties and frustrations eventually fuel reforms that spread prosperity more broadly.

As I noted at the outset, this pattern characterized the first industrial revolution as it arrived in America and spawned the reforms of the Jacksonian era of the 1830s. President Andrew Jackson and his followers believed elites had accrued unwarranted privileges that had to be removed before average citizens could gain ground. “It is a fixed principle of our political institutions,” declared Roger B. Taney, Jackson’s attorney general and then Treasury secretary, who would also become the fifth chief justice of the Supreme Court, “to guard against the unnecessary accumulation of power over persons and property in any hands. And no hands are less worthy to be trusted with it than those of a moneyed corporation.” The Jacksonians sought to abolish property requirements for voting and allow business firms to incorporate without specific acts of the legislature, and they opposed the Second Bank of the United States, which they believed would be controlled by financial elites. They did not reject capitalism; they rejected aristocracy. They sought a capitalism that would improve the lot of ordinary people rather than merely the elites. (Notably, however, the Jacksonians, including Chief Justice Taney, did not include native Americans or African American slaves among those deserving protection from the nation’s elites.)

Similar questions arose during the last decades of the nineteenth century when the second industrial revolution ushered in railroads, steel, oil, and electricity—and at the same time created vast economic combinations (then called “trusts”), concentrated wealth at the top, and fostered urban squalor and political corruption. The lackeys of robber barons literally deposited sacks of money on the desks of pliant legislators, prompting the great jurist Louis Brandeis to note that the nation had a choice: “We can have a democracy or we can have great wealth in the hands of a few,” he said, “but we cannot have both.”

America made the choice. Public outrage gave birth to the nation’s first progressive income tax. President Theodore Roosevelt, railing at the “malefactors of great wealth,” used government power to break up the trusts and impose new regulations barring impure food and drugs. He proposed “all contributions by corporations to any political committee or for any political purpose should be forbidden by law,” leading Congress to pass the Tillman Act, the first federal law to ban corporate political donations, and, three years later, the Publicity Act, requiring candidates to disclose the identities of all campaign contributors.

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