By Chet Yarbrough
Can Democracy Survive Global Capitalism?
By Robert Kuttner
Narrated by: Mike Chamberlain
Robert Kuttner (Author, journalist, professor of social policy at Brandeis University)
Robert Kuttner personalizes the history of capitalism as an historian and journalist, not an economist. This book is a tedious fact-filled tour of capitalist experimentation. Kuttner illustrates how government economic policy is like a roulette game. Government leaders spin the wheel. The ball drops on a numbered slot that is either black or red. A player chooses Kuttner’s fundamental point and the answer to the question “Can Democracy Survive Global Capitalism?” seems a matter of luck.
Choice for survival of global capitalism seems dependent on reducing the gap between billionaire/millionaire capitalists and the wage-earning public. However, what Kuttner’s rambling history shows is that there is no definitive answer. There are some clues but the balance between democratic freedom and equality of opportunity teeter on the metallic edge of a black and red slot of a roulette wheel. He asks the question whether America is going to become more like China or China more like America?
Kuttner offers some examples of economic policy in Scandinavian countries, Africa, the Baltics, Great Britain, France, Germany, Greece, China, and the European Union. Kuttner implies, if there is a common denominator for survival of global capitalism, it is government policy that benefits wage earners.
A rising tide (economic prosperity) must benefit more than a simple minority or small majority of citizens within a country.
Kuttner’s history shows achievements in democratic capitalism have been hit and miss with luck as much a factor of success as policy. Adam Smith, Karl Marx, and John Maynard Keynes theories offer hints about what can be done to grow and sustain capitalist economic stability. What gets in the way of their theories is interpretation, policy, action, and results.
Kuttner offers many good and bad examples democratic capitalism’ interpretation. Denmark denies Ryan Air’s employment model in their country because it is unfair to employees of the Airline. Public benefit services like mail in the United States assure delivery of the mail in a timely manner, regardless of profitability.
Unions are formed in various countries to give wage earners a seat at the table in determining fair compensation and benefits in privately held companies.
On the other hand, privatizing prison management only reduces cost to the public by reducing pay and training of prison guards. The prisons are not better managed, but costs are less because quality of service and overhead is reduced while prisoners are poorly managed. Immigrant labor is farmed out by private companies to reduce corporate costs but at the expense of laborers that work for less than a livable wage. Private companies higher “independent contractors” like Uber drivers for which the company does not pay medical premiums or employment taxes. Corporate raiders buy faltering high cash-flow companies with borrowed money. These corporate raiders reduce wages of employees, drives formally marginally profitable companies into bankruptcy, and walk away with millions paid by loans used to buy the company in the first place.
Kuttner caps these negative global capital maneuvers by revealing how American corporate owners and leaders move manufacturing to foreign competitors because of cheaper labor. That movement benefits corporations at the expense of American manufacturing.
Kuttner explains corporate outsourcing unfairly diminishes American workers and decimates American manufacturing. He notes Germany chose to improve the quality of their manufactured products to remain viable manufacturing global competitors even though their workers are paid more than comparable American workers.
This is a frustrating book to use as evidence for the survival of global capitalism because there are many examples of government policies meant to do good that fail.
This history reinforces the analogy of the roulette wheel. Either red or black may be the best result one can expect but the consequence seems as much luck as foresight.
Hope lies in reducing the gap between haves and have-nots by insuring equality of opportunity through public education and job opportunities. This is not to suggest homelessness and poverty will disappear in democratic capitalist societies, but it becomes a manageable societal responsibility.
Having lived in different areas of the United States shows homelessness and poverty are presently out of control.
Today, in the United States, homelessness and poverty are not being well managed because public education and job opportunities are not being adequately addressed. As one of the richest countries in the world, American democratic capitalism can do better than just survive.
Education and employment are key to turning these crises into something that can be managed.
One cannot dismiss Kuttner’s observations as liberal ranting. Wage earner respect and treatment, whether in manufacturing, technology, or service industries, are the key to survival of world capitalist democracies. America can choose to become more like China and support authoritarian miscreants like Donald Trump or elect leaders that experiment with political ideas that have made America great.