Saving Capitalism: For the Many, Not the Few

In Chapter 16, Reich reiterates his earlier point about the right-left political debate that pits the ideas of more market and less government against those of more government and less market. He argues that this debate hides the role of government in “designing, organizing, and enforcing” the market (153). The debate itself diverts attention from how choices are made by legislators, judges, and administrators and conceals the influence of large corporations, Wall Street, and wealthy individuals. While the downward redistribution of taxes from the rich to the poor is observable, the more prominent upward redistribution from consumers, workers, small businesses, and small investors to those at the top is not. The transformation that has taken place with the market is not entirely because of the power of those at top, but rather because of “the comparative lack of power or influence on the other side” (157)—in other words, a lack of a balancing, countervailing power.

Reich begins Chapter 17 with a historical analysis of past threats to American capitalism. He references the economic changes that took place during the first industrial revolution, leading to the reforms of the Jacksonian era in the 1830s, and the technological advances of the second industrial revolution in the late 1800s.