Book Club

Book Club: The Culture of the New Super-Rich

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As part of our new book club, we’re working our way through Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else, by Chrystia Freeland.

Last week, we used Plutocrats and other sources to draw some similarities between the first Gilded Age and the plutocracy we’re seeing re-emerge today. But in Chapter Two of the book, Freeland points out one notable difference: Many of today’s rich work, hard. In the late 19th and early 20th centuries, there were a notable few at the top who “pulled themselves up by their bootstraps:; many were born rich and just became richer. Freeland quotes F. Scott Fitzgerald: The rich of his time knew what it was to “possess and enjoy early.”

Freeland writes that today, the story is different. “Fat cats who owe it to their grandfathers are not getting all the gains,” economic historian Peter Lindert told her. “A lot of it is going to innovators this time around. There is more meritocracy in Bill Gates being at the top than the Duke of Bedford.”

That was just one part of Chapter Two that stood out to us. What about Plutocrats surprises or interests you? Let us know in the comments — and keep reading!

We’re looking forward to hosting a discussion with you next month, when author Chrystia Freeland will join us to answer your questions and talk about the book. (We’ll announce the date soon. Like us on Facebook to get updates on Book Club activities.)

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  • Stuart Mac Gregor

    Chrystia speaks in her interview endorsing capitalism and she writes exuding confidence in capitalism in her book Plutocrats:
    “ . . . we need capitalists, because we need capitalism – it being, like democracy, the best system we’ve figured out so far. page xiv
    . . . today, the evidence that capitalism works is clear, and not only in the wreckage of the communist experiment.” page 21
    Chrystia also cites British economics professor van reenen in support of her contentions, who states: . . .” Eventually humanity will prosper. Capitalism does work , but over the medium term, thirty or forty years, there could be incredible dislocations. I am very worried about what happens in the next year or so.” page 29
    Chrystia even relies on another British economist, Chairman of the Goldman Sachs Asset Management Division Jim O’Neill: “. . . the experience of the last two centuries has taught us that, with time, the creative destruction of capitalism inevitably brings an overall improvement in everyone’s standard of living.” page 30
    However, as the careful financial herstorian I know she is, I am sure you are aware that in the roughly 76 years between 1929 and the 2009 economic meltdown, there have been 11 other significant economic downturns under the capitalist economic system, according to the National Bureau of Economic Research, whose notable members have included Economic Nobel Prize winners Joseph Stiglitz (2001), Paul Krugman (2008) and Milton Friedman (1976), among many others. And perhaps you will concede that the 130 years prior to the debacle of the 1930s/1940s were no less cyclically turbulent, if we want to include the approximate 200 year history of capitalism.
    So my questions are:
    1) Are you aware that there are thousands of successful enterprises using a cooperative means of production that gives workers a democratic vote in how the company is run, effectively acting as their own CEO and board of directors while sharng in the profits? Like the Mondragon Corporation in the Basque region of Spain, which has existed since 1956 when it was founded by the collective capital and effort of just six persons, and thrives today, in spite of the turmoil in Spain during this economic meltdow, as one of Spain’s 10 largest corporations with about 85,000 members and cooperative companies in many countries, including the US and China? To date, Mondragon has not found it necessary to lay off any of its members.
    2) The esteemed Federal Reserve has determined that about 25% of american productive capacity stands idle at this time, while the Dept. of Labor tells us that U6 is about 14.7%, U6 being the unemployment percentage for those unable to find work, those underemployed with part time work who would like full time work, and those workers who have become “discouraged” and stopped looking for work.
    a) In view of the 13 economic downturns from 1929 to the present, and the disconnect between available workers seeking work and the idle means for production, don’t you think that capitalism is a “stupifyingly unstable” economic system, one that is “out of control, irrational and wasteful “to use just a few critical words from economist and professor Richard Wolff (Yale), whose new book is Democracy at Work: A Cure for Capitalism. [Emphasis added]
    3) Is it your opinion that our corrupt capitalist democracy cannot be improved upon, by that I mean corrupted by capitalists, for the sake of capitalism?
    4) I am sure you realize that communist Russia in 1917 and communist China in 1949, did not change the means of production to allow workers to have a democratic say in how the business they were performing for would be run, that in place of a CEO and board of directors, the government used central planning and state officials that usurped the same function.
    a) Do you think the outcome of Russia might have been different if a democratic means of production was used, sharing in the “surplus,” to use a term from Marx, or profits, to use an O’Neill term?
    b) Do you think capitalism may at some point reach the same dissolution as did Russia, for similar reasons, meaning the severe and greedy corruption of CEOs, boards of directors and shareholders?