Editorial: Substituting Private Profit for Public Policy

By Becky O’Malley
Tuesday November 27, 2007

What’s nice about book reviews is that, well done, they turn a monologue into a dialogue. It takes a certain amount of chutzpah for an author to reveal his thought processes and his conclusions on the printed page, and even more to submit to the judgment of his peers about whether or not he got it right. At our house we’ve been planning for a while now to form opinions about two new books by two Bobs, Robert Reich, now a Berkeley snowbird who teaches at UC’s Goldman School of Public Policy in the months when Cambridge is unpleasant, and Robert Kuttner, who’s still mostly an Easterner. They’re co-founders of The American Prospect, a worthy if sometimes dull journal of opinion populated mostly by center-left thinkers with a Boston background who have a lingering affection for the Democratic Party in some of its manifestations.  

The American Prospect (which now likes to call itself TAP to seem trendy) put the two new books head to head in a recent issue. Bob R. (Supercapitalism) and Bob K. (The Squandering of America) made a valiant effort to turn the seemingly minor differences in their analyses of what’s wrong with America into the political economists’ version of a Battle of the Bands, with predictable results. Both of us, the publisher and I, read it, or more precisely tried to read it and gave up in the middle because we (well, OK, I) kept falling asleep. Neither of us is a great fan of economics, often called the dismal science. He’s too much of a scientist to be persuaded by the often flimsy math many economists use to support their theories, though he does love Brad DeLong’s web site. I’m much more interested in social and cultural questions than in money.  

Someone gave him the Reich book for his birthday. Both of us really do intend to read it, but we haven’t gotten around to it yet. Then we heard the author on a talk show last week, and tried to figure out what the central premise was. But the questions asked were not probing enough to uncover the theme, beyond what the title and subtitle—Supercapitalism: The Transformation of Business, Democracy and Everyday Life—suggest.  

Just when we were thinking that we’d really have to get around to reading the book, and to reading Bob Kuttner’s book to boot, the New York Review of Books came in the mail, right in time for the long weekend. In a review titled “The Wrecking Ball of Innovation,” Tony Judt skillfully engages Professor Reich in a pointed dialogue about the relationship between capitalism and democracy, and particularly about the reliance on economic growth which has come to characterize much of what is sometimes called “progressive” thinking in the last 30 years. He notes that “...the relationship betwen capitalism and democracy (or capitalism and political freedom) should not be taken for granted: see China, Russia, and perhaps even Singapore today. Efficiency, growth, and profit may not always be a precondition or even a consequence of democracy so much as a substitute for it.”  

He characterizes Reich’s central thesis as the conflict between a “civic” identity and an “economic” one. He quotes what he calls a Reich sound bite: “As citizens [we] are sincerely concerned about global warming: as consumers and investors [we] are actively turning up the heat.” And he questions it: “... the real reason Robert Reich’s ‘citizen’ might be confused about global warming is not because he is also a part-time investor and consumer. It is because global warming is both a consequence of economic growth and a contributor to it. In which case, if ‘growth’ is good and global warming bad, how is one to choose? Is growth a self-evident good? Whether contemporary wealth creation and efficiency-induced productivity growth actually deliver the benefits they proclaim—opportunity, upward mobility, happiness, well-being, affluence, security—is perhaps more of an open question than we are disposed to acknowledge. What if growth increased social resentments rather than alleviating them? We should consider the noneconomic implications of public policy choices.” 

Judt’s review is a seminal piece, much too long and nuanced to summarize here or to characterize in short quotes. It questions, among other things, the trend to privatize everything that used to be public and the real consequences of the welfare reform which was one of the proudest achievements of the Clinton administration in which Reich served. Anyone who cares about public policy can and should read it. (It can be found online at www.nybooks.com/articles/20853.) 

And what does it offer for our many readers who are more interested in local public policy than in the impact of global capitalism? More than one might think. Some of Judt’s premises and conclusions shed a lot of light on current local controversies.  

The meeting of the Downtown Plan committee which discussed what size building should be allowed in downtown Berkeley featured a vocal minority contending that the question should be decided by outside expert economists, who could prove conclusively how tall buildings needed to be to provide a rate of return to developers which would spill over some part of their profits for public goods like green spaces. Whatever happened to the idea that providing open space for citizens was the responsibility of the whole body politic—that citizens deserved more than a few crumbs from the private table? (Attorney and DAPAC member Steve Weissman effectively demolished the idea of leaving everything to the experts by relating his experience with duelling economists in his day job at the Public Utilities Commission.) 

And what about Berkeley’s Orwellian-named Public Commons for Everyone Initiative? Local philosopher Osha Neumann has always likened the mayor’s repeated tries to pass such ordinances to the Poor Laws of 19th Century England. Tony Judt similarly sees the Poor Laws philosophy underneath Clintonian welfare reform, which he says “makes an individual’s claim upon the collectivity...contingent on good conduct.”  

Economic efficiency is the justification Berkeley’s mayor and several councilmembers have given for cracking down on the homeless: to make downtown more pleasant for shoppers. Here’s Judt on that goal: “Abundance (as Daniel Bell once observed) may be the American substitute for socialism; but as shared social objectives go, shopping remains something of an underachievement.” 

And the threat of global climate change seems to have popped up locally as just another profit opportunity. Many who should know better are salivating over the opportunities for “green” building projects without remembering that re-use is the greenest alternative. There’s a reason that Tony Judt uses the metaphor of “the wrecking ball of capitalist innovation.” There’s more private profit in new buildings, even though there’s more public benefit in re-using old ones. Or consider the cargo cult theory of public transit: If we build a lot of condos, surely someone will send buses to serve them.  

There’s much more to say here, but not much more space to say it in. Read both Bobs’ books or at least read the review. 

If you want to argue about some of these ideas, Bob Kuttner will be at Cody’s Bookstore at 7 tonight (Tuesday) to talk about his book, and he’s a funny man in person. Or if you believe that all political economy is local, you can join the Brother Can You Spare a Dime Chorus at old City Hall at 6:30, preceding the meeting where councilmembers will verbalize their rationalization for voting with the mayor to criminalize sleeping on the sidewalk. Either of these shows would be educational.