Considering a Book Purchase

Via Chris Hayes, Larry Lessig reviews Supercapitalism:

I bought this book because I heard it described on the radio (NPR, no less) in a way that made it sound like the dumbest book of the decade. It turns out that it was the summary, and not the book, that was dumb. Indeed, this is a fantastic book by an extremely smart and experienced liberal. It is the first book on the Corruption Required Reading list.

I'm pretty sure I heard that same summary and decided, lacking Lessig's taste for the perverse, that I wanted to avoid this book. Perhaps it's time to reconsider.

Comments

Sounds interesting. I'm probably not going to read it though.

Posted by Korha | October 22, 2007 4:46 PM

Here are some smarter (than the NPR review) reviews of the book:

http://www.ft.com/cms/s/0/918f288a-7538-11dc-892d-0000779fd2ac.html?nclick_check=1

http://economist.com/business/displaystory.cfm?story_id=9767615

I too was put off by the NPR review, but these reviews changed my mind.

Posted by David | October 22, 2007 4:55 PM

I meant to include this one too:

http://www.iht.com/articles/2007/10/19/arts/idbriefs20B.php?page=1

Posted by David | October 22, 2007 4:58 PM

This for example is very smart:

(from this review: http://www.iht.com/articles/2007/10/19/arts/idbriefs20B.php?page=1 )

"...The supply of moral outrage is limited. When we aim it at the wrong targets, we squander a valuable resource. In "Supercapitalism," Robert B. Reich argues that the current political debate in the United States is drowning in misdirected moral outrage. We cannot hope to solve our problems, he says, without first understanding the forces that have caused them.
...

As Adam Smith first described clearly, individuals who pursue only their own narrow interests in a competitive system often inadvertently create widespread social gains. But not always. Unlike many of his modern disciples, Smith was keenly aware of the invisible hand's limitations. Individual and social interests often diverge, he realized, and in such cases, greater competition makes matters worse. If a firm can cut costs by removing the filter from its smokestack, for example, it will feel greater pressure to do so when competition intensifies.

If our social ills are indeed rooted in increased competition, our only recourse, Reich argues, is to change the rules. Denouncing greed is simply wasted energy. If we want less inequality, we must make taxes more progressive. If we want cleaner air and water, we must adopt more stringent environmental laws."

Posted by david | October 22, 2007 5:02 PM

Lessig: "The basic arc of the argument is to first describe what Reich calls the "Not Quite Golden Age" in America, roughly the first half of the last century, when barriers to competition meant capitalism was relatively rich and big. Oligopoly defined the period; cooperation among big guys was the consequence.

This relatively quiet period for competition had some interesting consequences. (Big) business could afford to do socially helpful things (health care, etc.). Government could lean on them, and it was possible, because of the implicit protection of relatively weak competition, for them to give the government what it wanted."

I was not under the impression that the era of huge trusts was some sort of socialist paradise. And the whole business ended with the Great Depression, which seems like something we ought to consider before we head down that road again.

Reviving the Money Trust may give you universal healthcare and feed your puppy, but that really isn't the point. The problem with big non-competitive trusts is that they wield too much arbitrary power--over which ordinary citizens have no control. If they start doing things we don't like, it's a huge problem bringing them back into line and can lead to massive economic dislocations. And it's the same story if they're careless with their monopolies and crumble--huge negative consequences for everyone. Anyway, not having read the book, I won't go any further, but it still sounds pretty dumb to me.

Posted by southpaw | October 22, 2007 5:11 PM

"I was not under the impression that the era of huge trusts was some sort of socialist paradise. And the whole business ended with the Great Depression, which seems like something we ought to consider before we head down that road again."

After reading the link, I didn't get the impression either Reich or Lessing were saying we should go back to the Gilded Age. I found that part to be more descriptive than prescriptive. Reich notes that the current disenchantment with government and the corresponding rise in expectations that corporations do socially responsible things in a systematic manner in areas better suited to government action and policy comes from the era of Henry Ford giving his employees health coverage. He seems to be arguing for a greater divergence of roles for government and for corporations - one focusing on the public good and the other at efficiently making money to benefit the economy and our standard of living - thus reversing the trend of the corporate sphere bleeding into the policy sphere.

Posted by Reality Man | October 22, 2007 5:26 PM

Reality Man,

You're probably right. I could understand the argument that government should do social work and corporations should stick to their sums, but what Lessig's describing of Reich's book is a lot more than that. For example, there's Reich's recommendation that we abolish the corporate income tax and indeed the whole idea of a corporation as a separate legal person. Neither of these, to me, is particularly well correlated with dividing responsibility for the public good and economic growth. In light of your comment, I'm not sure I have enough information to say what Reich is driving at, but it seems like a lot more than having the government take over the provision of employee benefits.

Posted by southpaw | October 22, 2007 5:39 PM

nyt has an article on a current development related to the book (at least to lessig's comments...). the european court of justice has struck down the "volkswagen law" by which the german state of lower saxony retained effective control of the company even though it holds only 20% of the shares. porsche owns 30, but only had voting rights on the board equal to lower saxony. this highlights a different approach to corporate social responsibility --- have the gov't own part of the company and watch out for the workers (not close the gigantic factory in wolfsburg, for instance). but europe in general and germany in particular already have "don't screw the worker" laws, so this public/private fusion always seemed a little strange to me.

Posted by bs23 | October 23, 2007 8:38 AM

For example, there's Reich's recommendation that we abolish the corporate income tax and indeed the whole idea of a corporation as a separate legal person. Neither of these, to me, is particularly well correlated with dividing responsibility for the public good and economic growth.

The idea is that corporations are "increasingly efficient money making machines", not persons. It doesn't make sense to tax machines--we should tax the people who own them. They are economic growth machines, but it is human beings who must decide to what end this growth takes place.

On another note, it kind of makes sense that NPR would pan a book that bashes "corporate social responsibility", since NPR is kind of all about center-left corporatism.

Posted by Consumatopia | October 23, 2007 8:45 AM