Getting a Grip

admin May 29th, 2008

When Frances Moore Lappé has a question about something she does her research, reaches out, and asks away.

Recently she did just that, writing directly to Robert B. Reich, in response to her read of his 2007 book, Supercapitalism: The Transformation of Business, Democracy, and Everyday Life. Reich wrote back at length, clearly glad to engage in the back-and-forth. Below is the third installment of their correspondence. Keep checking back for future installments and please: share your thoughts by leaving a comment!

3. FML: You suggest that “we” have made a Faustian bargain to have cheap consumer products while foregoing our capacities to earn a living wage and have social protections. A “bargain” is a conscious choice. “We” were not given a choice. I feel strongly that if the citizenry had been allowed to choose between good incomes with some job security plus affordable housing and health care and education versus cheap goods at big box stores we would have chosen the former. If we citizens had been engaged in coming to public judgment, we would likely, I feel, have realized that with better incomes we would not have felt compelled to betray our own preferences for healthy communities with independent, hometown stores and decently paid labor. In other words, I feel certain that virtually all of us, if given the choice, would have opted for continuing the pattern of the first period in which all income groups did well and the poorest did the best—and even the richest quintile did better than in the second period!

More generally, I find your use of the royal “we” troubling. You imply that we’ve all gained in the second period because all of us are consumers and most of us investors. I understand that less that 7% of the bottom half of Americans by income own shares. And the concentration of gain from investment income is so skewed that the use of the term “we” is misleading.

RR: I don’t mean to suggest that we made the bargain willingly or knowingly. In fact, the gist of my argument is that our democracy has become so overwhelmed by corporate money that we lost our capacity address the tradeoffs between the consumer-investors in us and the citizens in us, and therefore allowed consumer-investor values to trump all others.

(You’re right that most saving is concentrated in a relatively small number of households, but unlike the first period, a majority of households now hold some shares of stock and therefore “shop” for good investment deals; more importantly, all households engage in consumption, and now shop quite vigorously for good deals. Widening inequality is of course a huge and growing social problem; under any Rawlsian notion of fairness, though, we wouldn’t willingly vote for it. The problem, again, is in the incapacity of citizens to express themselves in a democratic process that is responsive to them.)

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admin May 26th, 2008

When Frances Moore Lappé has a question about something she does her research, reaches out, and asks away.

Recently she did just that, writing directly to Robert B. Reich, in response to her read of his 2007 book, Supercapitalism: The Transformation of Business, Democracy, and Everyday Life. Reich wrote back at length, clearly glad to engage in the back-and-forth. Below is the second installment of their correspondence. Keep checking back for future installments and please: share your thoughts by leaving a comment!

2. FML: You refer to the first period as one of oligopoly and the second as competitive. I am puzzled because my sense is that the last 25 years have been characterized by mergers consolidating industries. In most of the industries I have looked at — especially the agrochemical sector, livestock and meat packing, the grain trade and the media — concentration has continued to increase. The barriers to entry have grown. Farmers, for example, have fewer and fewer choices from whom to buy virtually everything from seeds to tractors and to whom to sell their products. They feel the squeeze of oligopoly power. In technology and communications, Google and YouTube prove that start-ups can break through to the top. But that capacity seem unique to the sector. I would appreciate your help in understanding why you feel we do not live within an oligopolistic economy today.

Also, you imply that the first period was devoid of significant innovation but computer technology began its development in the 30s and 40s and during the 60s and 70s the computer revolution took off with development of transistors and microprocessors. Of course, significant innovation occurred during the first period in other fields as well.

RR: During the first period, most industries were organized as oligopolies because economies of scale were so important as entry barriers. Autos, steel, chemicals, telecom, for example. Other oligopolies dominated local and regional markets or were maintained through regulation (banking, airlines, insurance, utilities). In the second period, almost all industries are “contestable,” in the sense that just about any large company can get into any other large company’s “space.” (Wal-Mart is becoming a bank, for example), and just about any clever start-up can have quick entrance to any market via venture capital or larger firms looking to buy innovation.

• Frances , Guest writer , Robert Reich
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admin May 22nd, 2008

If you’ve read Getting a Grip (or know of its author in any other way) then you know: when Frances Moore Lappé has a question about something — Could there be a better way to see things, or even to say things? — she does her research, reaches out, and asks away.

Recently she did just that, writing directly to Robert B. Reich, in response to her read of his 2007 book, Supercapitalism: The Transformation of Business, Democracy, and Everyday Life. She’d long admired Reich’s contributions but had some big questions and challenges for the professor of public policy, Clinton’s first Secretary of Labor, and co-founder of The American Prospect.

Reich wrote back at length, clearly glad to engage in the back-and-forth. He has even welcomed us to share Frances’s questions, and his answers to them, with you.

Below is the first installment. Please keep checking back at GettingAGrip.org for future installments. Enjoy, and please: share your thoughts by leaving a comment!

Dear Robert,

Thank you again for your recent email and your invitation to be in touch. I learned a great deal from your book Supercapitalism but feel very uncomfortable with many aspects of your premise and the framing of your primary arguments. I have gathered these reflections and questions that I would love to explore with you.

For convenience I’ll refer here to the period of the mid-40s to the mid-70s as “the first period” and the years since as “the second period.”

Thank you for engaging with my views. I would appreciate knowing your critique of my book, Getting a Grip that covers some of these themes. I look forward to hearing from you.–Frances

1. FML: Throughout [the book], you repeat that in first period we did better as citizens but in the second we have done better as consumers and investors. Yet, as you indicate on page 106, during the second period (even after adding a second earner in most families), our real family income increase pales badly compared to [that of] the first period. If the left axis were the same on both the bar charts, the great setback in the second period would be even more immediately obvious. Elsewhere you note that if household incomes had kept up with productivity the typical household would have had $20,000 additional income in 2006!

To argue that we gained as consumers but lost badly as earners feels profoundly confusing, for, what do we buy things with except with what we earn? While some goods have become much cheaper, in fact, most families’ capacities to buy certain basic life essentials, including housing, education and healthcare, have shrunk drastically compared to [that of] the first period. Plus, of course, the necessity of having two earners to maintain a middle-class household itself adds costs, such as paying for day care and more prepared foods.

Thus, to emphasize our gain as consumers in the second period seems misleading.

RR: This question is really about how prices and productivity are measured. Median family incomes grew more slowly in the second period if you discount the effects of rapid technological change.

If you include those effects, however, median incomes grew faster. Healthcare became far better, longevity increased substantially, houses became larger on average and better heated and cooled, communications and transportation far more efficient and cheaper, and so on. The first period had relatively little innovation outside the defense sector (where computers, transistors, microprocessors, new materials technologies, and aerospace technologies were all researched and developed).

• Frances , Guest writer , Robert Reich
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admin May 1st, 2008

The following is adapted from an essay written by Bruce Haynes, a writer and slam poet from South Africa who has become very committed to working for change and Living Democracy. It was originally written as part of an International Essay Contest being held by the Goi Peace Foundation (http://www.goipeace.or.jp/). The contest’s theme is “My project to create positive change in my environment. How can I foster sustainable development in my community?”

Being that Bruce was inspired by Getting a Grip, he sent it to us and we in turn asked his permission to share it with you. We hope you’ll enjoy it.

I’m so excited about life. I’m using my power. I’m using my capacity to act. I’m trusting the process. And I’m loving it.

My name is Bruce Haynes. I’m a recovering stutterer. I’m also a 19-year-young Slam Poet. Goi Peace foundation, are you hearing me? Tokyo, Japan! Are you hearing me? Humanity! Do you hear me? I spent nine months in the UK last year with the purpose of finding out about what was really going on with the climate change situation. I did! I went back to my home country for three months with the intention of finding my voice. I did! My life has become a project to create positive change, and fostering sustainable development will come as a by-product of turning this whole situation upside-down. I believe very strongly that we can do that. I believe strongly that we can co-create positive change. Continue Reading »

• Frances , Getting a Grip: The Book , Guest writer , Inspired by "Getting a Grip"
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