When The Soul of Capitalism was published last fall,
I was widely accused of optimism — outrageous, incautious
optimism — and I pled nolo contendere. Between war and foreign
indebtedness, I see America’s immediate future in rather bleak
terms. The country, I fear, is headed for hard knocks — a
rough comeuppance for American triumphalism. But, if I squint into
the middle distance, I see a bright new era of reform approaching
— one that reopens old and fundamental questions about the
nature of American capitalism. How might the economic system be
altered to serve society, our lives and our deeper moral obligations
instead of overwhelming them. The Cold War is over (capitalism won).
It’s okay now to criticize the system, not simply the scandal
and fraud, but its deeper collisions with society and nature and
the way we wish to live. At this point in our history, a serious
critique of American-style capitalism may even be the patriotic
thing to do.
When I suggest that systemic change is possible, I mean altering
the institutional structures in which power is closely held and
the narrow operating premises that, in pursuit of short-term gain,
obliterate so much of what people truly value. But who has the power
to accomplish such profound change? People do. People of diverse
backgrounds and vocations, acting purposefully to change their circumstances.
One reason for my optimism is I have met many people — I call
them “pioneers” — who are already engaged in making
inventive changes, large and small, often localized, by using their
power as workers, investors, consumers, managers, owners, citizens.
The book recounts their efforts and describes obstacles they encounter.
In a sense, it is a how-to book — how people can find their
power, locate the points of leverage to achieve major reforms.
At this point, these efforts are merely intriguing fragments,
not a social movement. I do not have an 800-number to call for more
information or to enlist in the cause. But, as a reporter who has
covered political economy for four decades, I have considerable
confidence that these energies are real and growing, that Americans
have the nerve and skill to make great changes. Why? Because that
is the story of the country — the most profound changes in
American society always began with small scattered groups of purposeful
citizens, convinced that they did not have to settle with the way
The method of the book is to move across the main realms of U.S.
capitalism — work, finance capital, production and consumption,
the business organization of corporations, and the ever-present
role of government, first critiquing the system that exists and
then describing principles of reform and some living examples.
Work, for example, remains organized for most Americans along
principles inherited from feudalism — the “master-servant”
relationship. Does that sound radical? The phrase lights up the
room when I have addressed audiences — not just among blue-collar
workers but with business managers and highly educated professionals.
The quality and content of work has been widely degraded in the
last generation. Ask doctors, they will explain it. So will many
engineers, accountants, middle managers, government civil servants.
What I am suggesting is that Americans have reached a point where
they can assume greater responsibility over their work lives, that
reorganization of power relationships will allow greater participation
in decision-making, and this improved collaboration will produce
better results, not just for the effectiveness of the firm, but
for its responsibilities to society at large. That requires broadened
ownership systems so that all of the employees become empowered
“insiders,” not just those at the top of the command-and-control
To take another example, the financial system as a whole, with
rare exceptions, remains organized as a rather small number of “experts”
making investment choices for “other people’s money”
— following very narrow and somewhat archaic rules for accomplishing
gains. The “other people” are treated more or less like
hapless “widows and orphans,” whose interests must be
decided for them.
Given the results, it is not surprising that a growing number
of citizens are trying to get some control over their own money
— trying to insure that their savings are not invested in
ways that contradict their own values, damage society and the environment.
Wall Street disparages “socially responsible investing”
as sentimental, yet the accumulating evidence demonstrates that
SRI funds actually beat the market returns. In fact, SRI is merely
the bow wave of a deep shift in American consciousness — people
taking responsibility for the consequences of their own actions.
I predict the financial system is likely to change more dramatically
than other realms for the simple reason that the center of gravity
in finance now belongs to the “collectivized wealth”
held by the fiduciary institutions (pension funds, mutual funds
and others). As ordinary working people gain an understanding of
their potential power, they will ask first why their savings are
often invested in ways that injure them or their communities or
nature. Next, they will demand a greater voice in how that wealth
is invested. In time, the values themselves will be altered as it
becomes clear that “true wealth” does not require many
of the destructive practices and that the genuine long-term interests
of people and the society are best served when business and finance
are aligned with the broad moral responsibilities of society itself.
This is a long road, for sure. It sounds quite radical compared
to the reigning market orthodoxy. But don't bet against it. American
pioneers — people truly dedicated to changing their circumstances
— often get what they seek.