Can American capitalism survive? Why greed is not good, opportunity is not equal, and fairness won't make us poor

Steven Pearlstein

Book - 2018

Pulitzer Prize-winning economics journalist Steven Pearlstein argues that our thirty year experiment in unfettered markets has undermined core values required to make capitalism and democracy work. Thirty years ago, 'greed is good' and 'maximizing shareholder value' became the new mantras woven into the fabric of our business culture, economy, and politics. Although, around the world, free market capitalism has lifted more than a billion people from poverty, in the United States most of the benefits of economic growth have been captured by the richest 10%, along with providing justification for squeezing workers, cheating customers, avoiding taxes, and leaving communities in the lurch. As a result, Americans are losing f...aith that a free market economy is the best system. In Can American Capitalism Survive', Pulitzer Prize-winning journalist Steven Pearlstein chronicles our descent and challenges the theories being taught in business schools and exercised in boardrooms around the country. We're missing a key tenet of Adam Smith's wealth of nations: without trust and social capital, democratic capitalism cannot survive. Further, equality of incomes and opportunity need not come at the expense of economic growth. Pearlstein lays out bold steps we can take as a country: a guaranteed minimum income paired with universal national service, tax incentives for companies to share profits with workers, ending class segregation in public education, and restoring competition to markets. He provides a path forward that will create the shared prosperity that will sustain capitalism over the long term.

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New York : St. Martin's Press 2018.
Main Author
Steven Pearlstein (author)
First Edition
Physical Description
244 pages : illustrations ; 22 cm
Includes bibliographical references (pages 211-235) and index.
  • Is greed good?
  • Not-so-just deserts
  • Is equality of opportunity possible or even desirable?
  • Fairness and growth : a false choice
  • A better capitalism
  • Acknowledgments.
Review by Choice Review

Pulitzer Prize--winning journalist Pearlstein argues that American capitalism today focuses on shareholder returns to the exclusion of all other values, thereby "undermining trust and discouraging socially cooperative behavior" across all US institutions. This shift to supply-side economics has weakened the "social capitalism" that "provides the support for formal institutions and unwritten rules and norms of behavior that foster cooperation and compromise." Pearlstein believes "there is a rich and important conversation still to be had about what kind of society we want and what variety of capitalism would best achieve it." Noting that Adam Smith's Wealth of Nations became the bible for an "economic ideology based on self-interest, rational expectations and efficient markets," Pearlstein reminds readers that Smith's earlier treatise, The Theory of Moral Sentiments, provides an important social context. "For Smith, success in commerce required the development of … characteristics such as economy, industry, prudence and honesty. As he saw it, the desire for 'luxury' and the desire for 'virtue' could be reinforcing--but only if self-interest were tempered by a concern for the well-being of others." The steps Pearlstein recommends are not new, but they are grounded in thorough research and illustration from market-based economic systems across the world. Erudite, readable, and highly recommended. Summing Up: Highly recommended. General readers; upper-division undergraduates through faculty. --Mildred S. Myers, emerita, Carnegie Mellon University

Copyright American Library Association, used with permission.
Review by Publisher's Weekly Review

This unsatisfying survey of contemporary American capitalism takes a sharply critical tack toward the "winner take all" philosophy that Pearlstein, a Pulitzer-winning Washington Post columnist, sees as dominating the U.S. for the past 30 years. A shortsighted fixation on maximizing shareholder value, Pearlstein contends, has shortchanged the country's economy in the long run. To prove the point, he explores the various problems created by inequality (unequal access to education, the distortion of the political process by donors, limited economic opportunity) in what he sees as a developing plutocracy. Though Pearlstein is thoughtful and sincere, he isn't plowing any new ground. Moreover, short of a Bernie Sanders presidency, it's difficult to imagine any of Pearlstein's solutions (explored in the final chapter, "A Better Capitalism") being implemented any time soon. His suggestions include limiting special interest money in politics, establishing universal basic income, sharing profits with employees, equalizing educational opportunity, and restoring competition. Since none of these solutions is currently politically feasible, the bulk of the book comes across as an ineffectual rant on contemporary injustices. (Sept.) © Copyright PWxyz, LLC. All rights reserved.

(c) Copyright PWxyz, LLC. All rights reserved
Review by Kirkus Book Review

Pulitzer Prize-winning Washington Post economics journalist Pearlstein examines our dominant economic system and finds it sorely wanting.It is a foundational myth that anyone with a good idea and a strong will can make it in America, that one generation will do better than the next. If that were ever true, writes the author, then it is true no longer, not given the evolution of our peculiar form of capitalism with American characteristics, a spectacularly dog-eat-dog system. "The only thing exceptional about America," he writes, "is that it is now less mobile than many other societies with long histories of rigid social and class structures." Thomas Piketty has already told us as much, but not in prose so crisp and accessible. Pearlstein traces that evolution to the convergence of three related axioms 30-odd years ago: the notion that government is the problem and not the solution; that corporations have no responsibility other than increasing their shareholders' wealth; and that morality doesn't really enter into questions of the purse, "no matter how unequal the distribution of income and wealth might become." These three ideas have yielded a scenario in which Republicans are now abandoning long-nurtured ideals of a balanced budget and investment in public goods in favor of a no-tax, laissez-faire economics in which the big ones eat the little ones. Pearlstein explodes supply-side assumptions, showing that present inequalities are yielding stagnationwhy work when you can't get ahead, as is the case for most workers today? Instead, he notes, studies have shown that the most productive economy balances egalitarian and meritocratic reward systems: Everyone shares to some extent, with incentives for those who do more. The author closes by proposing numerous systemic reforms, including profit-sharing, renewed antitrust legislation and enforcement, and limiting special-interest money in politics, all with an eye to "replenishing our stock of social capital."A provocative pulse-reading, the answer to whose title is probably yesbut at what cost? Copyright Kirkus Reviews, used with permission.

Copyright (c) Kirkus Reviews, used with permission.