Back in 2001, John Hoerr penned an article in The American Prospect on an IBM plant in Dutchess County, New York, which “surplused” (read: fired) 7,700 workers in a single day. He detailed the rise and fall of International Business Machines in the postwar era, along with the crippling effects of mass layoffs in a county where the company employed 70 percent of all manufacturing workers. In a particularly striking detail, Hoerr noted that local officials asked gun shops to close temporarily, fearing that the newly jobless would retaliate out of bitterness and resentment.
Hoerr’s article is now dated, the trends he references less so. It is only fitting, then, that Robert Reich’s Saving Capitalism echoes Hoerr’s caution more than a decade later, arguing against the relatively unregulated market that has persevered since the turn of the century. After all, it was Reich who co-founded the Prospect , and his book even addresses the perverse incentives at IBM that caused layoffs in the first place. But while Reich accurately tackles the problems of the modern American economy, his proposed solution comes up short. Reich opens with a five-dimensional model for capitalist economies, those five dimensions being property, monopolies, contracts, bankruptcy, […]
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