Consumers are to blame
Andrew Hackman
Issue date: 10/3/08 Section: Arts & Entertainment
Economics books are boring and mostly useless, and concepts like how businesses and the stock market works are all foreign concepts that don't actually influence most people.
After all, what does it matter how the system works so long as it works? Sure, some businesses like Enron and Microsoft are going to abuse the system, but they are the exception to the rule. Most businesses care about the average person, want to take care of their workers and have an interest in the greater good. Besides, the government is looking out for us as citizens and consumers, so there really isn't too much to worry about. At least, this is what most people seem to think.
"Supercapitalism" by Robert Reich is a new book on economics that seeks to change that. What Reich has to say is, to say the least, sobering. He takes many of our dearly-held beliefs about the way our economy and government work and calls them out-of-date, na've and dangerous.
The root of his argument is that each and every person in America is part consumer and part citizen. In the past 30 years, changes in the economy have created an intensely competitive environment amongst corporations. As a result, the consumer has made unprecedented gains. The quality and variety of available goods has increased in direct contrast with how much those same goods cost. Think about how powerful your computer is and how much less it costs than something a tenth as powerful a decade ago. Even more important, with the advent of the Internet, the average consumer can search and find the best deals with minimal effort. Competition has created the most powerful consumers in history.
Of course, all of this competition and consumer growth has come at a cost. In order to compete, companies can and must do everything in their power to produce goods more cheaply. If labor is cheaper overseas, it will go overseas. If spending money on lobbyists creates beneficial laws, it will be spent. If the environment has to suffer, it will.
After all, what does it matter how the system works so long as it works? Sure, some businesses like Enron and Microsoft are going to abuse the system, but they are the exception to the rule. Most businesses care about the average person, want to take care of their workers and have an interest in the greater good. Besides, the government is looking out for us as citizens and consumers, so there really isn't too much to worry about. At least, this is what most people seem to think.
"Supercapitalism" by Robert Reich is a new book on economics that seeks to change that. What Reich has to say is, to say the least, sobering. He takes many of our dearly-held beliefs about the way our economy and government work and calls them out-of-date, na've and dangerous.
The root of his argument is that each and every person in America is part consumer and part citizen. In the past 30 years, changes in the economy have created an intensely competitive environment amongst corporations. As a result, the consumer has made unprecedented gains. The quality and variety of available goods has increased in direct contrast with how much those same goods cost. Think about how powerful your computer is and how much less it costs than something a tenth as powerful a decade ago. Even more important, with the advent of the Internet, the average consumer can search and find the best deals with minimal effort. Competition has created the most powerful consumers in history.
Of course, all of this competition and consumer growth has come at a cost. In order to compete, companies can and must do everything in their power to produce goods more cheaply. If labor is cheaper overseas, it will go overseas. If spending money on lobbyists creates beneficial laws, it will be spent. If the environment has to suffer, it will.
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