Robert Reich's 'Saving Capitalism: For The Many, Not The Few'
Can American capitalism be saved from its most predatory, selfish instincts?
Could the U.S. economy spread its wealth—if the public and political class understood how today’s unprecedented domination by monopolistic corporations have undermined opportunity, wages and income and public confidence in the future?
Exclusive excerpt from @RBReich's new book, SAVING CAPITALISM, out 9/29. #ForTheMany http://t.co/RHsKXp18xt http://t.co/VbTwnHnwoF— Alfred A. Knopf (@Alfred A. Knopf)1442928292.0
In other words, what would it take to reshape the marketplace so Americans do not feel they are endlessly emptying their pockets almost every time they access health care, use bank or use credit cards, repay student loans or bills for necessities such as internet access—which have been steadily ticking upward and outpacing income growth.
This audacious question and challenge is the topic of Robert Reich’s new book, Saving Capitalism: For The Many, Not The Few. In it, the ex-Secretary of Labor and political economy scholar outs “the new monopolists,” debunks their “free-market” ideology and rhetoric and offers a pragmatic reform-filled path forward.
Reich wants to reframe the way Americans understand and talk about the economy. His starting point is to start correctly labeling today’s widespread corporate consolidation as the nation’s latest monopololy-filled era. He provides plenty of examples of name-brand businesses and sectors that have consolidated their control of the choices that consumers face, such as Apple’s operating system or Comcast’s telecom services. But his definition doesn’t stop there. These corporate behemoths also manipulate government to their great benefit, sometimes take advantage of state power—such as by gaining patents to ensure market dominance, while simultaneously lobbying other arms of government to impede possibly regulatory actions that might alter business models or profits.
But perhaps Reich’s largest target is taking on the very language used by the business world that perpetuates the myth that the private sector exists as magical sphere entirely unrelated to government. As he bluntly says and shows, there is no such thing as the “free market” or a natural governing economic principle that “the market knows best.”
“Few ideas have more profoundly poisoned the minds of more people than the notion of a ‘free market’ existing somewhere in the universe, into which the government ‘intrudes,’” Reich writes early in the book. “In this view, whatever inequality or insecurity the market generates is assumed to be natural and the inevitable consequences of impersonal ‘market forces’ … If you aren’t paid enough to live on, so be it. If others rake in billions, they must be worth it. If millions of people are unemployed or their paychecks are shrinking or they’ll have to work two or three jobs and have no idea what they’ll be earning next month or even next week, that’s unfortunate but it’s the outcome of ‘market forces.’”
Out 9/29! Amazon: http://t.co/5igdmg1gVR Barnes & Noble: http://t.co/4o99BmfOZx IndieBound: http://t.co/EQpeOJQmVk http://t.co/GwQtHpxddx— Constitution Sue (@Constitution Sue)1443220785.0
Reich’s point is governing classes and government have always created the rules of the economic game. These legal frames and the systems they support affect a nation’s well-being and daily life more than the size of any government program. Reich gives many examples tracing how wealthy interests have used a mix of contributing to candidates’ political campaigns and deployed post-election lobbying to create a system that’s neither free nor arbitrary, but rigged to benefit the few at the expense of the many. He does this by breaking down the building blocks of American capitalism in order to show how the economy is constructed and where it must change. He delves into what it means to own property, what degree of monopoly is permissible, how contracts have evolved, what are the options when bills can’t be paid and how the economy’s rules are enforced.
“The rules are the economy,” he writes, saying this is not a new observation. “As the economic historian Karl Polanyi recognized [in his book, The Great Transformation], those who are argue for ‘less government’ are really arguing for different government—often one that favors them or their patrons. ‘Deregulation’ of the financial sector in the 1980s and 1990s, for example, could more appropriately be described as ‘reregulation.’ It did not mean less government. It meant a different set of rules.”
Thus, it was not some amorphous free spirit that allowed Wall Street to start its ill-fated stampede of speculation “on a wide assortment of risky but lucrative bets and allowing banks to push mortgages onto people who couldn’t afford them” that lead to the global recession of 2008. It was the friendliest American government that campaign cash and lobbying could buy that ushered forth a “freer” marketplace. While that analysis is not unique nor even in dispute, the propagandistic phrase that drove the lobbying and was touted in Congress as it deregulated Wall Street endures. There is no shortage of “free market” champions and purveyors of “government-hands-off” ideology today.
The response to modern predatory capitalism, Reich said, can be found in America’s past but must be fine-tuned for today’s corporate practices. Simply put, government must step in and rewrite the economy’s rules in several key areas: how candidates for public office finance their campaigns; how monopolies are regulated and broken up—through federal anti-trust enforcement and what legal benefits are given to corporations, such as limited liability which lets businesses escape debt—which individual customers cannot always access when facing with unpayable bills.
Reich reminds readers that America has had federal anti-trust laws since the 1890s, when Ohio Republican Sen. John Sherman, who sponsored a landmark antitrust law, did not distinguish between political and economic power. “If we will not endure a king as a political power, we should not endure a king over the production, transportation and sale of any of the necessaries of life,” Sherman famously said, underscoring Reich’s point that the rules governing the economy “also reflect their moral values and judgement about what is good and worthy and what is fair.”
Unlike today’s libertarians, Reich does not think the average American’s economic fortunes are tied to how long or hard they work. He said that while “we are the author of our own fate,” most Americans “are not the producers or directors of the larger dramas in which we find ourselves.” Richer people are not “smarter nor morally superior to anyone else,” he said. “They are, however, often luckier and more privileged and more powerful. As such, their high net worth does not necessarily reflect their worth as human beings.”
Reich makes these points to underscore that it is not capitalism, per se, that has been the target of populist reformers over the decades who fought to reverse economic hardships. Rather “they rejected aristocracy,” he said and “sought a capitalism that would improve the lot of ordinary people rather than merely the elites.”
Thus, Reich touts a handful of well-known reforms to rebalance the current economy’s distortions. Federal antitrust enforcement would help smaller business compete and usher in new entrepreneurial energy. Reversing the decline of labor unions would increase the bargaining power of employees in many industries, who typically have seen their wages stagnate as executive suite pay has skyrocketed. And the benefits given by government to incorporating businesses should be tied to workplace practices. “Limited liability, life in perpetuity, corporate personhood for the purposes of making contracts and the enjoyment of constitutional rights—would be available only to entities that share the gains from the growth with workers while also taking the interests of their communities and the environment into account.”
Reich is under no illusions that any of this will come easily or without a massive fight.
“The moneyed interests have too much at stake in the prevailing distribution of income, wealth and political power to passively allow countervailing power to emerge,” he said. “While they would be wise to support it for all the reasons I have enumerated above—mostly, they will do better with a smaller share of a faster-growing economy whose participants enjoy more of the gains and will be more secure in an inclusive society whose citizens feel they are being heard—they will nonetheless resist.”
Yet Reich believes that the tides of history are on his side. Economic reforms and a rebalancing of the rules will come, he said, citing moments in American history where presidents with populist sentiments have triumphed over the wealthy by setting new economic rules: from Andrew Jackson in the 1930s, to the Theodore Roosevelt in the early 20th century, to Franklin Roosevelt's New Deal.
For now, however, perhaps the best takeaway from his new book is to start talking about the monopolies that rule the economy using that word: monopolies. As important, is rejecting any use of the pernicious term, “free market,” whenever it appears in conversation or public discourse. As he repeatedly writes, there isn’t a "free market" there’s a market governed by manmade rules and laws that were written to advantage some and not others.
“The market is a human creation. It is based on rules that humans devise. The central question is who shapes those rules and for what purpose,” Reich concludes. “The coming challenge is not to technology or to economics. It is a challenge to democracy. The critical debate for the future is not about the size of government; it is about whom government is for.”
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By Lynne Peeples
Editor's note: This story is part of a nine-month investigation of drinking water contamination across the U.S. The series is supported by funding from the Park Foundation and Water Foundation. Read the launch story, "Thirsting for Solutions," here.
In late September 2020, officials in Wrangell, Alaska, warned residents who were elderly, pregnant or had health problems to avoid drinking the city's tap water — unless they could filter it on their own.
Unintended Consequences<p>Chemists first discovered disinfection by-products in treated drinking water in the 1970s. The trihalomethanes they found, they determined, had resulted from the reaction of chlorine with natural organic matter. Since then, scientists have identified more than 700 additional disinfection by-products. "And those only represent a portion. We still don't know half of them," says Richardson, whose lab has identified hundreds of disinfection by-products. </p>
What’s Regulated and What’s Not?<p>The U.S. Environmental Protection Agency (EPA) currently regulates 11 disinfection by-products — including a handful of trihalomethanes (THM) and haloacetic acids (HAA). While these represent only a small fraction of all disinfection by-products, EPA aims to use their presence to indicate the presence of other disinfection by-products. "The general idea is if you control THMs and HAAs, you implicitly or by default control everything else as well," says Korshin.</p><p>EPA also requires drinking water facilities to use techniques to reduce the concentration of organic materials before applying disinfectants, and regulates the quantity of disinfectants that systems use. These rules ultimately can help control levels of disinfection by-products in drinking water.</p>
Click the image for an interactive version of this chart on the Environmental Working Group website.<p>Still, some scientists and advocates argue that current regulations do not go far enough to protect the public. Many question whether the government is regulating the right disinfection by-products, and if water systems are doing enough to reduce disinfection by-products. EPA is now seeking public input as it considers potential revisions to regulations, including the possibility of regulating additional by-products. The agency held a <a href="https://www.epa.gov/dwsixyearreview/potential-revisions-microbial-and-disinfection-byproducts-rules" target="_blank">two-day public meeting</a> in October 2020 and plans to hold additional public meetings throughout 2021.</p><p>When EPA set regulations on disinfection by-products between the 1970s and early 2000s, the agency, as well as the scientific community, was primarily focused on by-products of reactions between organics and chlorine — historically the most common drinking water disinfectant. But the science has become increasingly clear that these chlorinated chemicals represent a fraction of the by-product problem.</p><p>For example, bromide or iodide can get caught up in the reaction, too. This is common where seawater penetrates a drinking water source. By itself, bromide is innocuous, says Korshin. "But it is extremely [reactive] with organics," he says. "As bromide levels increase with normal treatment, then concentrations of brominated disinfection by-products will increase quite rapidly."</p><p><a href="https://pubmed.ncbi.nlm.nih.gov/15487777/" target="_blank">Emerging</a> <a href="https://pubs.acs.org/doi/10.1021/acs.est.7b05440" target="_blank" rel="noopener noreferrer">data</a> indicate that brominated and iodinated by-products are potentially more harmful than the regulated by-products.</p><p>Almost half of the U.S. population lives within 50 miles of either the Atlantic or Pacific coasts, where saltwater intrusion can be a problem for drinking water supplies. "In the U.S., the rule of thumb is the closer to the sea, the more bromide you have," says Korshin, noting there are also places where bromide naturally leaches out from the soil. Still, some coastal areas tend to be spared. For example, the city of Seattle's water comes from the mountains, never making contact with seawater and tending to pick up minimal organic matter.</p><p>Hazardous disinfection by-products can also be an issue with desalination for drinking water. "As <a href="https://ensia.com/features/can-saltwater-quench-our-growing-thirst/" target="_blank" rel="noopener noreferrer">desalination</a> practices become more economical, then the issue of controlling bromide becomes quite important," adds Korshin.</p>
Other Hot Spots<p>Coastal areas represent just one type of hot spot for disinfection by-products. Agricultural regions tend to send organic matter — such as fertilizer and animal waste — into waterways. Areas with warmer climates generally have higher levels of natural organic matter. And nearly any urban area can be prone to stormwater runoff or combined sewer overflows, which can contain rainwater as well as untreated human waste, industrial wastewater, hazardous materials and organic debris. These events are especially common along the East Coast, notes Sydney Evans, a science analyst with the nonprofit Environmental Working Group (EWG, a collaborator on <a href="https://ensia.com/ensia-collections/troubled-waters/" target="_blank">this reporting project</a>).</p><p>The only drinking water sources that might be altogether free of disinfection by-products, suggests Richardson, are private wells that are not treated with disinfectants. She used to drink water from her own well. "It was always cold, coming from great depth through clay and granite," she says. "It was fabulous."</p><p>Today, Richardson gets her water from a city system that uses chloramine.</p>
Toxic Treadmill<p>Most community water systems in the U.S. use chlorine for disinfection in their treatment plant. Because disinfectants are needed to prevent bacteria growth as the water travels to the homes at the ends of the distribution lines, sometimes a second round of disinfection is also added in the pipes.</p><p>Here, systems usually opt for either chlorine or chloramine. "Chloramination is more long-lasting and does not form as many disinfection by-products through the system," says Steve Via, director of federal relations at the American Water Works Association. "Some studies show that chloramination may be more protective against organisms that inhabit biofilms such as Legionella."</p>
Alternative Approaches<p>When he moved to the U.S. from Germany, Prasse says he immediately noticed the bad taste of the water. "You can taste the chlorine here. That's not the case in Germany," he says.</p><p>In his home country, water systems use chlorine — if at all — at lower concentrations and at the very end of treatment. In the Netherlands, <a href="https://dwes.copernicus.org/articles/2/1/2009/dwes-2-1-2009.pdf" target="_blank">chlorine isn't used at all</a> as the risks are considered to outweigh the benefits, says Prasse. He notes the challenge in making a convincing connection between exposure to low concentrations of disinfection by-products and health effects, such as cancer, that can occur decades later. In contrast, exposure to a pathogen can make someone sick very quickly.</p><p>But many countries in Europe have not waited for proof and have taken a precautionary approach to reduce potential risk. The emphasis there is on alternative approaches for primary disinfection such as ozone or <a href="https://www.pbs.org/wgbh/nova/article/eco-friendly-way-disinfect-water-using-light/" target="_blank" rel="noopener noreferrer">ultraviolet light</a>. Reverse osmosis is among the "high-end" options, used to remove organic and inorganics from the water. While expensive, says Prasse, the method of forcing water through a semipermeable membrane is growing in popularity for systems that want to reuse wastewater for drinking water purposes.</p><p>Remucal notes that some treatment technologies may be good at removing a particular type of contaminant while being ineffective at removing another. "We need to think about the whole soup when we think about treatment," she says. What's more, Remucal explains, the mixture of contaminants may impact the body differently than any one chemical on its own. </p><p>Richardson's preferred treatment method is filtering the water with granulated activated carbon, followed by a low dose of chlorine.</p><p>Granulated activated carbon is essentially the same stuff that's in a household filter. (EWG recommends that consumers use a <a href="https://www.ewg.org/tapwater/reviewed-disinfection-byproducts.php#:~:text=EWG%20recommends%20using%20a%20home,as%20trihalomethanes%20and%20haloacetic%20acids." target="_blank" rel="noopener noreferrer">countertop carbon filter</a> to reduce levels of disinfection by-products.) While such a filter "would remove disinfection by-products after they're formed, in the plant they remove precursors before they form by-products," explains Richardson. She coauthored a <a href="https://pubs.acs.org/doi/10.1021/acs.est.9b00023" target="_blank" rel="noopener noreferrer">2019 paper</a> that concluded the treatment method is effective in reducing a wide range of regulated and unregulated disinfection by-products.</p><br>
Greater Cincinnati Water Works installed a granulated activated carbon system in 1992, and is still one of relatively few full-scale plants that uses the technology. Courtesy of Greater Cincinnati Water Works.<p>Despite the technology and its benefits being known for decades, relatively few full-scale plants use granulated active carbon. They often cite its high cost, Richardson says. "They say that, but the city of Cincinnati [Ohio] has not gone bankrupt using it," she says. "So, I'm not buying that argument anymore."</p><p>Greater Cincinnati Water Works installed a granulated activated carbon system in 1992. On a video call in December, Jeff Swertfeger, the superintendent of Greater Cincinnati Water Works, poured grains of what looks like black sand out of a glass tube and into his hand. It was actually crushed coal that has been baked in a furnace. Under a microscope, each grain looks like a sponge, said Swertfeger. When water passes over the carbon grains, he explained, open tunnels and pores provide extensive surface area to absorb contaminants.</p><p>While the granulated activated carbon initially was installed to address chemical spills and other industrial contamination concerns in the Ohio River, Cincinnati's main drinking water source, Swertfeger notes that the substance has turned out to "remove a lot of other stuff, too," including <a href="https://ensia.com/features/drinking-water-contamination-pfas-health/" target="_blank" rel="noopener noreferrer">PFAS</a> and disinfection by-product precursors.</p><p>"We use about one-third the amount of chlorine as we did before. It smells and tastes a lot better," he says. "The use of granulated activated carbon has resulted in lower disinfection by-products across the board."</p><p>Richardson is optimistic about being able to reduce risks from disinfection by-products in the future. "If we're smart, we can still kill those pathogens and lower our chemical disinfection by-product exposure at the same time," she says.</p><p><em>Reposted with permission from </em><em><a href="https://ensia.com/features/drinking-water-disinfection-byproducts-pathogens/" target="_blank">Ensia</a>. </em><a href="https://www.ecowatch.com/r/entryeditor/2649953730#/" target="_self"></a></p>
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