From Wall St. to Wal Mart, a diagnosis.

| 16 Feb 2015 | 06:18

    The Soul of Capitalism: Opening Paths to a Moral Economy By William Greider Simon & Schuster, 384 pages, $28.00 Better Together: Restoring the American Community By Robert D. Putnam and Lewis M. Feldstein Simon & Schuster, 336 pages, $26.95 Capitalism is a heartless, greedy, exploitative and easily corruptible economic system?but it's also, pound for pound, the best economic system we've got. So says William Greider, who evinces a love/hate relationship with American capitalism in his latest book, The Soul of Capitalism, which takes on a corporate structure he characterizes as "profoundly dysfunctional in many ways." As the national affairs correspondent for the Nation and author of six books on global capitalism, the U.S. military and the Reagan administration, Greider is smart enough to know that while dysfunctional, the American economic machine has also defeated the most pernicious forms of hunger and scarcity in this country, leaving the vast majority of Americans the time and resources to invest their energies elsewhere.

    But success has a habit of breeding complacency, and the fact that so many feel estranged from politics serves as the starting point for his call to civic action. Greider believes in the power of ordinary Americans to rise up and take control of the country by reining in the corporations that hire the lobbyists and fund reelection campaigns.

    Corporations make bad citizens, mostly because lax government regulation allows them to ignore the greater good in favor of increasing profits. For Greider, the failures of Enron, WorldCom, Kmart and others over the past few years drive the point home. As the companies went bust, management cashed in stock options and kept on drawing their multimillion-dollar salaries while employees saw their 401ks dry up and were put out of work.

    This really isn't anything new, as the corporate system has been going through these fluctuations for well over a century now. The difference this time, and this is a point Greider doesn't spend nearly enough time on in his analysis, is deregulation. The widespread deregulation of the Clinton era allowed companies like Enron to operate without a net, leading to crooked accounting practices and fictitious offshore subsidiaries that shuffled money around?enriching those at the top while swindling employees and the public at large.

    To counter this rampant and persistent corporate fraud, Greider advocates worker co-ops where employees have an actual financial stake in the health of their company, beyond merely collecting paychecks. As co-owners, employees would make more money as the company prospered, and less if productivity fell. This would create a real incentive for creative solutions to problems and help foster long-term strategies to fuel growth. Aside from benefiting the worker, Greider says, it would benefit society as a whole. Instead of a company focusing on short-term solutions that serve only to temporarily boost the company's stock price (and pad the executives' stock options while doing nothing for the worker), the company's employees would look for a more permanent solution to the problem at hand in order to promote long-term stability and ensure themselves of long-term employment.

    This all sounds great, and Greider's prescriptive optimism is heartening, but his sympathies sometimes get the best of him. Americans have never been very adept at looking at the long-term, and it's a pretty good bet that many workers, if they were co-owners, would also go for the short-term payoff in lieu of long-term benefits. Those DirecTV subscriptions don't pay for themselves.

    Another theorist with faith in the American people's power for self-transformation is Harvard's Robert Putnam. In 2000, he published a book called Bowling Alone that charted the startling decline in civic participation in the United States over the past 25 years. It painted a pretty bleak picture, blaming the increasingly pervasive entertainment industry, the growth of faceless suburban sprawl and the growing number of two-income households for severing community ties across the country. These trends effectively alienated Americans from one another and tore apart the participatory social fabric a healthy democracy needs in order to exist. His new book, Better Together, written with Lewis Feldstein, is kind of a follow-up to that work, in which a supposed "rebirth" of civic participation is outlined in mind-numbingly wonky detail. The authors pick 12 examples of community-building initiatives across the country, from branch libraries in Chicago to community councils in Portland, OR, to the "virtual" community of Craigslist, but fail to really bring any of these topics to life. They plod through interviews and case studies showing how a group of "regular folks" saw a problem and came together to solve it.

    The main difference between old civic associations and the new breed is huge. Where people used to join bowling leagues, the Boy Scouts, PTAs and Elks clubs, they now participate in neighborhood-improvement initiatives, literacy issues and union organizing. While discussing the impressive level of citizen participation in Portland, OR, Putnam and Feldstein point out, but fail to really develop, the fact that the influx of new arrivals?Mexican immigrants in particular?has strained the ability of some of these groups to function. In many ways, Portland is a city truly run by its citizens, but the city's example highlights what can go wrong with community building (or, "building social capital"). In its most extreme form, it is exclusionary, forming a mentality of us vs. them that protects the status quo. This is exactly what is happening in Portland, with older city residents showing disdain for immigrants and newcomers, leading to a fracturing of some neighborhood associations and creating some tricky political issues that have yet to be fully addressed.

    When building social capital, any social theorist will tell you that smaller is better, as a smaller group of people can meet face to face, form bonds and more quickly decide on a course of action with less dissent than in a large group. Thus the authors champion smaller initiatives like interfaith church groups and neighborhood associations, but in order to try and give a little more scope to their argument that social capital building is on the rise, they also discuss the union and employee organizing actions undertaken by UPS as an example of how people can work together to effect change at the corporate level.

    Putnam and Feldstein seem to think that there's a participatory movement afoot in the country, but since they can't support their thesis with any statistical evidence, they content themselves with falling back on a series of intermittently interesting anecdotes as evidence to support the sunny picture they want to put forth. That's fine if you're writing a magazine essay, but it's a weak foundation for a book.