Saving Capitalism: For the Many, Not the Few

Bankruptcy is a legal process through which people who cannot repay debts to creditors get relief. It is one of the five building blocks of capitalism Reich discusses in Saving Capitalism. In Chapter 7, Reich explains that bankruptcy was designed so that people could start over. However, these days, the only ones starting over with ease are “big corporations, wealthy moguls, and Wall Street, who have had enough political clout to shape bankruptcy law to their needs” (59).

A CEO, or Chief Executive Officer, is the primary person responsible for managing a company. Much of Reich’s discussion in Saving Capitalism concerns compensation for CEOs, which has risen steadily since the 1980s and has skyrocketed to astronomical levels over the last decade.

Citizens United v. Federal Election Commission is a 2010 Supreme Court ruling that concluded that “corporations are people under the First Amendment, entitled to freedom of speech” (11). The ruling effectively overruled the previous Campaign Reform Act of 2002, which had limited the amount that corporations could spend on political advertising (11). The decision opened the door for even more money to be donated by corporations, thereby widening their influence over market rules via policy making.

Collective bargaining rights are the rights of employees to negotiate as a group, typically within a union, to establish salaries, benefits, and working conditions. Much of Reich’s work focuses on countervailing power that existed in the decades after World War II when unions were strong and wages were high. As unions weakened, employees lost countervailing power and collective bargaining rights.

Contracts describe what can be bought and sold and on what terms. Contracts are another of Reich’s five building blocks of capitalism. He argues that “if property and market power lie at the heart of capitalism, contracts are its lifeblood—the means by which trades are made and enforced” (48).

In political theory, countervailing power is when the wielding of power by two or more groups creates a counterbalance to the other group’s power. Reich alludes to countervailing power throughout much of his work, typically in reference to how it once existed and provided workers with good wages and how it has declined over the last three decades.

Enforcement is the mechanism in place to make sure that no one cheats on any market rules. It is another of Reich’s five building blocks of capitalism, While everyone agrees that the rules concerning property, monopoly, contracts, and bankruptcy must be enforced with rules, opinions differ on the details (67).

Monopoly refers to “what degree of market power is permissible,” or the extent to which individuals or corporations can or should reduce market competition. It is one of Reich’s five building blocks of capitalism. Reich points out that “substantial market power provides strong incentives to invest and innovate but also raises consumer prices. Such power can also translate into political power, distorting markets further into favor of those who possess it” (29).

Property is what can be owned in the market system. It is Reich’s first, and most basic, building block of free market capitalism. In the conventional debate, according to Reich, property is contrasted with government ownership, or socialism. What’s left out of that debate are the myriad ways government “organizes and enforces property” (16).

The non-working rich refers to people who live in great wealth despite not working at all. While far smaller than the working poor, the number of people who are non-working rich have grown in recent years. Reich clarifies in Chapter 15 that some of these people have earned their wealth through assets accrued through their own merit, but a growing number have inherited their wealth (143).