Can American Capitalism Survive? Why Greed Is Not Good, Opportunity Is Not Equal, and Fairness Won't Make Us Poor
BY STEVEN PEARLSTEIN
St. Martin's Press, 2018 205 pp.; $27.99
Steven Pearlstein's Can American Capitalism Survive? Why Greed Is Not Good, Opportunity Is Not Equal, and Fairness Won't Make Us Poor is as mildly unconventional as one could expect from a Washington Post business reporter of three decades. The book is solidly capitalist and aims to preserve the US version of that economic system, but Pearlstein mostly wishes that the economy that had prevailed until Ronald Reagan was elected president had continued advancing along the path it was on.
For those who are economics-challenged, this is the book to read. Despite his admittedly less-than-scientific approach, Pearlstein presents a broad survey of research on the main issues in the book. (That said, I'm unprepared to comment on how complete it might be, given the vast subject matter).
Starting with the issue of greed, the book recounts how even Adam Smith, the eighteenth-century founder of capitalist thought, denigrated greed. Pearlstein's most important point on the issue is that US corporate leaders have come to elevate advancing stockholders' interests almost to the exclusion of all other concerns and in the process decided that success at doing so deserved a king's ransom.
Next, Pearlstein details the extent of income inequality, itself a complex issue. "[I]f income distribution in the United States had remained the same as it was in 1979, about $1 trillion more would be going each year to the bottom 80 percent of households, increasing their current incomes by almost 25 percent," he points out. On the policy causes behind increasing inequality, the book is a good reminder that the conservative revolution in full swing under President Trump really got going under Reagan. Certainly, Pearlstein's critique of conservative economic policy changes under Reagan and onwards comports with a humanist view of the issues.
The bulk of unpaid worker compensation, of course, has gone to the 1 percent. Pearlstein cites a study showing that from 2000-2002, the combined total compensation of the top-five executives at public US firms with market capitalization of more than $50 million averaged an astonishing 12.8 percent of their firm's net income. One result has been the growth of the financial industry to service the billionaires needing new places to invest their burgeoning wealth...