Supercapitalism. The Transformation of Business, Democracy and Everyday life

Citation

Reich, R. (2008), "Supercapitalism. The Transformation of Business, Democracy and Everyday life", Society and Business Review, Vol. 3 No. 3, pp. 256-258. https://doi.org/10.1108/sbr.2008.3.3.256.1

Robert B. Reich is professor of Public Policy at Berkeley (California). He is well known as a “liberal” politician. He was the secretary of Labour in the Clinton administration. He has already written 11 books among which is The Work of Nations (1992). In his latest essay, “supercapitalism” Reich explores the links between capitalism and democracy and discuss of the erosion of wages from a political and economical perspective. What Reich looks at in his new opus is the impact of a low cost economy (or obsession) on the workings of democracy.

According to Robert Reich, there was a time when capitalism and democracy where almost perfectly balanced. This was the period of 1945‐1975, which he calls the “Not Quite Golden Age”. During this period there was a three‐way social contract among big business, big labour, and big government. Each made sure that they as well as the other two received a fair share of the pie. Unions received their wages and benefits, business their profits, and regulatory agencies had their power. It was also a time when the gap between the rich and the poor was the narrowest. Meanwhile, it was not perfect because women and minorities were still second class citizens, but at least there was hope. But since the mid seventies, things have changed. Capitalism has become a “supercapitalism”, a specific society where the consumer is king and prices always go down. This supercapitalism is a consumption and web society that is also characterised by globe‐trotting, massive layoffs, extravagant CEO pay, and vast business political influences in both elections and day‐to‐day affairs.

How does Reich explain this transformation? It has resulted from a combination of things: technologies innovation, deregulation, globe spanning computer networks, better transportation, etc. The changes were mainly a result of technological breakthroughs. It is not due to some large conspiracy or any hidden political agenda as much as it is driven by consumption.

Therefore, nowadays supercapitalism has robbed democracy. Robert B. Reich argues that democracy – charged with caring for all citizens – is becoming less and less effective under its influence, while supercapitalism is working wonderfully well to enlarge the economic pie. The winner of this great transformation is the consumer/investor and the loser is the citizen/wage earner. The consumer has more choices than ever before and at reasonable prices. The investor has unprecedented opportunities to make profits. The citizen, however, is not doing well. The average citizen does not have much voice – other than voting – in the body politic. And on the wage earner has been stagnating for many years. The most salient illustration of this trend is Walmart. This corporation delivers the goods at low prices, but the trade‐off is low wages for their employees. According Reich, power has shifted away from us in our capacities as citizens and toward us as consumers and investors. While praising the spread of global capitalism, he laments that supercapitalism has brought with it alienation from politics and community. Reich also explains how widening inequalities of income and wealth, heightened job insecurity, and the spreading effects of global warming are the logical outcomes of supercapitalism. He shows us why companies, fighting harder than ever to maintain their competitive positions, have become even more deeply involved in politics; and how average citizens, seeking great deals and invested in the stock market to an unprecedented degree, are increasingly loath to stand by their values if it means biting the hands that feed them. In this context, Reich invites us to stop treating corporations as human beings. They are neither moral nor immoral; they are merely “bundles of contracts”. Therefore, we must avoid the idea that corporations could be socially responsible. Any socially responsible action is a ruse to bolster the bottom line anyway. More, encouraging them to be socially responsible could lead us to believe that they are the alpha and omega of our so‐called democratic society. Corporations play by the rules that they are given and it is up to citizens and their elected representatives to change the rules. Reich considers that the traditionally public politics tools used to temper America's societal problem (fair taxation, well‐funded public education, trade union) have withered as supercapitalism has burgeoned. Therefore, Reich calls for abolishing the corporate income tax and to abandon the corporate social responsibility movement that is distracting and even counterproductive.

In that situation, what can be done in favour of a better democracy? Reich, firstly remarks the greater difficulty today in conducting democratic action. For example, there are currently 38,000 registered lobbyists in Washington DC. The only way citizens can compete with this is not by hiring more lobbyists but advocating through new media outlets such as the internet and cable TV. This, according to Reich, is currently to most effective way to make government more responsive. It is certainly one of the explanations of the supercapitalism ascendance on occidental societies. Meanwhile, this difficulty to act as citizen is certainly one of the explanations of the supercapitalism ascendance on occidental societies. More generally, Reich considers that the restoration democracy is matter of a radical separation between capitalism and democracy (or politics). The author assures us that we can have both a vibrant democracy and a vibrant capitalism. Firstly, we need to content corporations by keeping them out of the political process. Secondly, the sphere of consumption and the sphere of citizenship must be distinguished by situating citizenship above our actions as consumers. One cannot simply ignore the consequences to one's community in making buying decisions, for example, frequenting Walmart. Most of all, we need to reinvigorate the political process. Democracy requires citizen interaction and debate to set an agenda and carry it out. By contrast, markets need only aggregate individual, self‐interested behaviour. The greater difficulty in conducting democratic action is certainly a fact or in the ascendance of the marketplace in supercapitalism. The future of the democracy therefore lies in each of us, in our everyday behaviour as consummate and employee. Will the consumers who are sacrifice their low prices to achieve their goals as citizens? If the response is yes, a rebalance between democracy and capitalism is possible; if not, the hypothesis of a progressive slide towards a plutocratic and oligarchic totalitarism can be laid!

The Reich's book is an essay with the advantages and the drawbacks of such a gender. The book is best at describing the evolution of capitalism and the super‐capitalism. It is weaker on how to change the situation (supposing that we had to change it!) In all, the book does not contest, fundamentally, the American capitalist society. Its major interest is to stress the today disjunction that is operating within each of us between our positions of citizen, employee and consummate. The contemporary individual is a torn between person that is an excellent thing for psychotherapeutic, drugs and religious businesses!

Hervé Mesure

Groupe ESC Rouen, France