Chapter 9 -- high road capitalism -- Norton August.pdf
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Chapter 9 -- high road capitalism -- Norton August.pdf

Chapter9--highroadcapitalism--NortonAugust.pdf

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Chapter9HighRoadCapitalismFinalAugust2009IntheUnitedStatesatthebeginningofthe21stcenturymanypeoplebelievethatfreemarkets,largelyunregulatedbythestate,arethebestwaytoorganizeaneconomy.Sincethelastquarterofthe20thcentury,politiciansofbothpartieshavearguedthatlowtaxesareessentialforahealthyeconomicenvironmentandthatgovernmentregulationsmostlyjustgetinthewayofenergeticentrepreneursandarethusultimatelyharmfultoprosperity.Whiletheeconomiccrisisthatbeganin2008maysignalachangeinthisfaithinthefreemarketandhostilitytogovernment,conservativepoliticiansstillproclaiminthewordsofRonaldReaganthat“governmentistheproblem,notthesolution.”Inpreviouschapterswehavelookedatsomeoftheproblemswithfreemarketsinparticulardomainsofeconomiclife:generatingnegativeexternalitiesontheenvironment;undermininganefficienttransportationsystem;intensifyingconsumerism;andcreatingahighcosthealthcaresystemwithgreatinequalitiesinaccess.Butthequestionstillremains:howwelldoderegulated,freemarketsdoatthecoreofeconomiclifeitself?Thisisthebottomlineformanypeople:doweaklyregulatedfreemarketsandcapitalistenterprises“deliverthegoods”byprovidingprosperity,opportunityandreasonableeconomicsecurityformostpeople?ThischapterwillbeginbyreviewingtheeconomicrecordofrecentdecadestoseehowwellAmericancapitalismhasreallyperformedforthelivesofmostpeople.Wewillthenlayoutacontrastbetweentwobroadwaysthatadevelopedcapitalisteconomycanbeorganized,whichwewillrefertoas“Lowroad”and“highRoad”capitalism.WewillarguethattheerosionoftheaffirmativestatethroughthederegulationofcapitalistmarketshasputtheAmericaneconomyonthelowroad,andtheonlywaytochangeroutesistorehabilitateanaffirmativestatecapableofprovidingarangeofvitalpublicgoodsandimposingconstraintsonthestrategiesofpowerfulactorswithinmarkets.Thechapterwillconcludewithadiscussionoftheobstaclestoaccomplishingthis.THEECONOMICRECORDFromtheendoftheSecondWorldWaruntiltheearly1970s,averagerealweeklyearningsforprivateproductionandnonsupervisoryemployees–over80%ofall