Review of “The Soul of Capitalism” by William Greider
Winter Trimester 2008
“The Soul of Capitalism” by William Greider starts by exposing a fundamental paradox embodied in our current economic system. The paradox is “… enormous and without precedent in history: a fabulously wealthy nation in which plentiful abundance may also impoverish our lives.” The sources and dynamics of this paradox are well developed in the first two chapters. It is the result of a system that has solved the fundamental economic problem of humanity – that of scarcity – yet cannot address the deeper question of what it means to be human that is exposed as a result. It is grounded in an economy that excels at creating material abundance, and, as it creates such abundance leaves behind a swath of environmental and social destruction.
We have not found the “off switch” for the pursuit of “more” that has been at the root of the solution to scarcity. As Greider puts it “… the United States pushes on strenuously, like a long distance runner who has won the race yet keeps running beyond the finish line, not looking back and not quite sure who or what drives him.”
The question then becomes one that is fundamental to the study of sustainability: What is it about the nature of American capitalism that, as Greider puts it, “generates great injury and destructive consequences right alongside the material abundance,” and, what can we do about it? How can we reshape the basic institutions of capitalism so that they retain the ability to create, to innovate, to produce more from less, while providing them with an internal compass that guides them along a path of integrity and responsibility as they exercise these abilities? “The Soul of Capitalism” – subtitled “Opening Paths to a Moral Economy” – provides a thorough and insightful exploration of these questions, as well as some well thought out answers.
The ground covered by this book is broad, and some of it is familiar. The chapter “Consuming the Future”, explores the collision between the consumer culture and the environment. In the chapter “Imperious Capitalism”, we look at the dynamics of capital under the current system, and how a narrowness of values allows the domination of social values. In the chapter “Command and Control”, we explore the history behind the dysfunctional aspects of corporate organization – how the corporation has acquired expansive powers and misused them.
Then too, there are some subjects that I have not run into so often. For example, the development of the role of government in shaping the legal and social framework in which capitalism operates is treated in one chapter, and another offers a reexamination of the relationship between labor and capital These are areas often neglected in the study of sustainable business.
Greider keeps the book from becoming too diffuse, from being a catalog of grievances, by drawing on the underlying connections between these issues. One of the integrating themes is that of responsibility. Drawing on a historical context to show that the questions raised are not new, Greider characterizes capitalism as “irresponsibility developed into a system”. Part of the efficiency of the modern corporation stems from the fact that it is not required – indeed is actively exempted from – responsibility for the consequences of its actions. We see this enshrined, in Orwellian fashion, in oft repeated mantra that fulfilling a ‘moral obligation’ to make as much money as possible for shareholders is the ultimate expression of corporate responsibility.
The analysis is not one-sided, however. This book is not an ideological rant. For example, after exploring the dysfunctional nature of corporate organization, Greider acknowledges that these institutions have prevailed because of strengths, inherent qualities that deliver real value for society, saying “we cannot grasp fully what is dysfunctional in the modern corporation until we also learn to appreciate its virtues. This sensitivity to the subtleties of the issues, to the intertwined workable and unworkable characteristics of our economic institutions is what gives the book its power. It allows for true insight, and sidesteps many of the polarizing arguments that tend to preclude the ability to solve these problems.
One of the things that I appreciated about this book is the development of solutions on two levels. Out of a discussion of the institutions of capitalism come suggestions for a variety of structural changes that could be enacted at the societal level by government, investors, labor, or within the corporations themselves. These changes are the foundation of long term, broad based change. However, Greider recognizes this type of change takes a lot of political and social will – something that may take a while to develop.
So, he does not stop there. He points out what can, and is, being done right now, without waiting for these broad institutional changes. He documents how pioneers are, in small companies and communities, experimenting with changes to the fundamental mechanisms of ownership, capital and organization that make up capitalism.
Here is a partial list of these pioneers: “Some are ‘humanist-populist-capitalists’, some are poor people. Some are ‘radical’ ecologists out to transform industrial life, and some of them are from the Republican establishment. Some are forward-thinking labor leaders, others are middle managers who used to regard unisons as the main problem. Some are wealthy investment bankers, some are failing framers, accountants, or animal rights activist. It’s a very rich social mix, gorgeously unlike in the American fashion”.
His faith, his guidance of the reader along the path of optimism based on a clear sighed view from the grass roots level is refreshing. And, this is a strong claim. Greider recognizes this in the opening to the last chapter, “Thinking Forward”: “Undoubtedly, the most audacious assertion in this book is that Americans are capable of doing this [changing the nature of American capitalism], that they have the heart and head to see the possibilities for themselves and to see them through.” The last chapter backs up this claim in a way that rings true for me.
This is because I see myself as participating as one of these pioneers, because I am part of some of these experimental organizations growing up – and succeeding – here in Vermont. It is because much of the underpinnings of his work are congruent with current research in the areas of economics, sociology, and ecology. This thinking is questioning the assumptions that support the current economic system – and pointing in a similar direction of change. And, because I share Greider’s faith in the ability of a motley, “gorgeously unlike” collection of people to lead the way forward.
The soul of capitalism that Greider shows us is that of a spirit sadly undernourished, impoverished in terms of human values. We have created an economic system divorced from land and people, populated by robots, by unconscious zombies lurching about the economic landscape. While they do useful things for us – for example, create material abundance – they unwittingly destroy what we hold dear as they tromp about in our service, stepping hard on our values. The soul of capitalism, then, needs to become a real soul, to expand, to acquire the human values of compassion, of justice – a moral sense. Greider’s book gives us an honest, compelling vision of how this might come about.