The Nation asked a playful question and got back serious answers. Imagine you have the ability to reinvent American capitalism: Where would you start? What would you change to make it less destructive and domineering, more focused on what people really need for fulfilling lives?We put the question to an eclectic list of people who are known for thinking long term—public-spirited veterans of business and finance, optimistic activists, inventive policy thinkers. Their responses provide a provocative sampler of smart ideas—concrete proposals for reforming the dysfunctional economic system in fundamental ways. These brief essays should stimulate imaginations and maybe start some healthy arguments. At the very least, they demonstrate that the nation is alive with fresh thinking and bold outlines for big change.
The problem, of course, is that none of these ideas have any traction in regular politics. Both parties are locked in small-minded brawls, unable to think creatively or even to tell the truth about our historic economic crisis. Republicans are lost in preposterous nostalgia for small, simple government. Democrats have their own delusions: they insist that regulation will somehow fix whatever is broken, ignoring that the failure of regulation was a principal cause of catastrophic breakdown.
Politicians argue over big government so they can avoid talking about big capitalism, the larger source of our predicament. But reality is not cooperating with their evasions. Despite the so-called recovery, the economic pathologies generated by unbounded capitalism during the past thirty years are expanding. Falling wages and surplus labor, swelling trade deficits and foreign indebtedness, deepening inequality and the steady destruction of the broad middle class—the political system does not have an answer for any of these.
At some point, it will become obvious that our economy will not truly recover until American capitalism is refashioned, stripped of its self-aggrandizing excesses and made to serve the interests of society rather than the other way around. As our commentators observe, this will require deep structural change, not simply new policies. Their essential approach is to reach into the guts of corporate capitalism and fix the wiring. That means changing both rules and operating values. It involves democratizing reforms that will compel business and finance to share decision-making and distribute rewards more fairly.
This vision can be called “inclusive capitalism,” as one essay suggests, or a genuine fulfillment of “democratic capitalism,” as another author proposes. Whatever it’s called, the essence is a fundamental redistribution of power and money. Obviously, this will require a stronger government (though not necessarily a bigger one) that stops subsidizing the maldistribution of wealth and income through its tax code and spending programs. Government has to recover some of the economic levers it purposely abandoned in the era of deregulation, a move that encouraged the obscene inequalities.
Achieving a more equitable distribution of incomes and wealth is fundamental to creating a just society. As professors Richard Freeman of Harvard and Joseph Blasi and Douglas Kruse of Rutgers suggest, enormous progress can be made simply by eliminating tax subsidies for corporations that distribute generous profit-based bonuses to the top officers but little or none to the employees down below. Ray Carey, the retired CEO of ADT Inc. and author of Democratic Capitalism, proposes ingenious reforms to protect retirement funds from Wall Street’s empty speculation.