Capitalism as it is practiced is economically insane, and it is devouring the American dream, so says the author of one of the books I have reviewed. 1 Part 2 of this series adapts and adds to that review.
Roger Terry wrote a book in 1995 on "economic insanity" (no, it isn't a "mis"fortune telling of the insane economic meltdown of 2008 thirteen years later). He's certainly not a mainstream economist nor do I think even a maverick one. Rather, I assume business management is his professional field because he mentions once having students in his management classes in the Marriott School of Management at Brigham Young University. He is the cofounder of the "funcompany," which is in the publishing and stationary business. His company gives him an opportunity to practice some of what he preaches.
Terry contends that the growth-driven capitalism of big, authoritarian, and unaccountable organizations is devouring the American dream. As proof he points to the erosion of the good life of being happy; how we have become a nation not of citizens but of consumers of "life-style enhancing" things, yet in actuality we produce more (in waste) than we consume in products and services; how seeking limitless economic progress is both illusory and self-destructive; how we live in a capitalistic society, but most of us are dependent wage earners, not independent capitalists; and how the rich are getting richer and the poor are getting poorer-an inevitable result of capitalism.
I could not agree more with his aspersion toward "big, authoritarian, and unaccountable organizations." My very first book not only railed against them, but better still, offered a model of an organization that was the direct antithesis of today's behemoth hierarchical organizations. 2
Note his reference to "independent capitalists." We shall encounter that idea more than once as we proceed through the series.
In the first part of his book, Terry questions three underlying assumptions of our current capitalistic system that he contends are so inherently wrong that the system can't be fixed; 1) limitless, perpetual economic growth is an imperative good, 2) increasing productivity is a cure-all for an ailing economy, and 3) maintaining a good life depends on continuous technological advances. I could add some more underlying inherently wrong assumptions, like that of assuming that debt is the basis of our economy. 3
The growth imperative, he argues, is illogical, immoral, misguiding, and destructive. It's illogical because we consumers buy products we don't really need (e.g., personal computer upgrades) from companies that are fearful of not making and selling new products lest their competitors do so and grab more of the market share. It's immoral because it lets companies rationalize wrongdoing for the sake of survival. It's misguiding because companies are diverted from what should be their true purpose, to serve society in useful ways. It's destructive because our planet and our pocketbooks are being irretrievably depleted by a growth-driven, consumer-oriented economy. I agree with him completely, and as a side note, I have reviewed another book that propounds the opposite, "double-digit" growth. 4
He argues that productivity increases, contrary to the prevailing assumption, don't make the economy grow and thereby don't improve our standard of living. He observes that while productivity has gone up over the last 25 years, real wages haven't. Productivity increases, instead, are siphoned into the pockets of the rich, into pay for support people (e.g., consultants) who don't produce anything, and into payments on un-forgivingly huge debts fueled by the growth imperative. Not to mention, I would add, the unconscionable hiatus between the haves and have nots that are reflected not only in individual incomes but also in misery, insufferably poor living conditions and health, and sometimes death from failing health.
Technological advances, he claims, are "inherently self-destructive" because they are "quickly bankrupting us." Only a few select companies and the more affluent among us can afford the technology race. The rest go out of business or into deeper debt.
In Terry's opinion, the assumptions are so inherently wrong that the system can't be fixed, so in the second part of his book he offers ideas for a new kind of capitalism. In that sense, Terry's ideas are very much at home with this series (obviously, or I wouldn't have included him).
In the second part of his book, Terry outlines the features of a new economic system. It would be a structurally different capitalism, one we've never seen before. It would be a "Nation of Owners," in which there are three levels of ownership: (a) small enterprises, like his own, with the founders and a few partners who share ownership commensurate with their seniority and other factors like start-up funding; (b) larger enterprises, the corporations of today, would be owned collectively by their members, who would elect managers for limited terms of office; and (c) public enterprises, such as utilities, education, defense, and the like, would be created and managed by public boards or local governments. Now that I would add and enthusiastically emphasize would be real economic sanity!
Here is a sketch of what he says life would be like under this different capitalism. It would be a "truer form" of capitalism because anyone able-bodied and "even minimally motivated would own capital and in reasonably equal portions," thus guaranteeing freedom of opportunity and markedly reducing inequality of income. There would no longer be a Wall Street since absentee owners, i.e., shareholders, would gradually be replaced by working owners, which in turn would eliminate the motive of short-term profits and its immoral consequences. Our government would be much different-it wouldn't be controlled by a corpocracy. Our economy would be developing better rather than growing bigger. Businesses would be motivated to serve society instead of serving themselves. There would be no more drudgery at work, exploitation of workers, cutthroat competition, takeovers, downsizings, wholesale firings, ballooning personal and collective debt, frivolous products, superfluous support structures, or any other ills you might associate with the present system. Sounds like utopia, doesn't it? Unless you're a fat-cat CEO or you can't wait for the next computer upgrade.
But he obviously wasn't writing for the fat-cat CEOs or the impatient PC owners; no, he was writing instead for people "who will inhabit America's future and dream the American Dream" and "leaders--among us (who) have yet to find their voices."
Terry forged this book out of what he calls "a disjointed pile of half-baked, angry ideas." His purpose in this less angry final product is "to identify a new way of looking at our organizational and individual lives through rejecting certain assumptions that drive our economic system." Some of it is indeed a new way for me and maybe for you, too.