The System: Robert Reich explains how the ultra-wealthy have rigged the system

by Mal Warwick (April 20, 2020)

Mal Warwick’s review of The System original appeared in Berkeleyside on April 10, 2020.

The System: Who Rigged It, How We Fix It, Robert B. Reich, Knopf, March 24, 2020, 225 pp., $31.68

Everyone who follows politics in the United States, certainly every Democrat, is aware that the American system is rigged. In their presidential campaigns, Bernie Sanders and Elizabeth Warren has made sure of that. Warren is especially articulate and has gotten the point across with great skill. But leave it to former Labor Secretary Robert Reich to explain how things have gotten so far out of kilter. That’s the task he’s taken up in his latest book, The System.

Reich names names of those who rigged the system

The System is, in a sense, an open letter to Jamie Dimon. If you’re not familiar with that name, you should be. Dimon is the billionaire chairman and CEO of JPMorgan Chase & Co., America’s biggest bank, and chairman of the Business Roundtable, a nonprofit association of the chief executives of the country’s biggest companies that exerts a powerful influence in Washington. If anyone can be regarded as a spokesman for American capitalism, it’s Jamie Dimon. And apparently Reich resolved to write this book following a phone call he received from him in the spring of 2018. Dimon had called to complain because Reich had criticized him publicly. Much of the text in The System, especially at the beginning and end of the book, is addressed directly to Dimon.

A lifelong Democrat who’s not just talk,

What you may not know about Jamie Dimon is that he is a lifelong Democrat. At the Business Roundtable, through his bank, and in public statements, he consistently advocates for progressive policies. As Reich notes, “He speaks out about the injustices and inequalities of contemporary America. [And] he is not just talk. He has pushed his bank to invest in poor cities and to create better opportunities for the disadvantaged.”

But he is "awash in self-delusion,

“I believe he’s sincere,” Reich asserts. “But he is awash in self-delusion . . . Dimon doesn’t see how he has contributed to the mess we’re in.” He is, in fact, one of a handful of ultra-wealthy individuals who are most directly responsible for rigging the system. In his latest book, Reich offers his analysis of the many ways that Dimon and the others who comprise what Reich terms the oligarchy have used their power to enrich themselves.

Over the past 40 years, they have acquired “unprecedented wealth, which has bought them even more power,” leaving the rest of us far behind. In Reich’s view, Dimon is “emblematic of an abdication of public responsibility to maintain the health of our political-economic system at a time when a comparative few at the top have more power over it than at any other time in more than a century.” And “for all his liberal outspokenness, Dimon never mentions America’s growing concentration of wealth and power.”

Reich's analysis in a nutshell,

Don’t assume we’re locked in a battle between capitalism and socialism,” Reich proclaims at the outset. “We already have socialism — for the very rich. . . Today the great divide is not between left and right. It’s between democracy and oligarchy.” Reich then proceeds to explain exactly how this sad reality has come about.

“Three big systemic changes over the last forty years have reallocated power upward in the system,” he writes. “They are (1) the shift in corporate governance from stakeholder to shareholder capitalism, (2) the shift in bargaining power from large unions to giant corporations, and (3) the unleashing of the financial power of Wall Street.”

As a direct result, the system is rigged to divert an ever-larger share of national wealth toward a tiny minority at the top of the pyramid. The upshot is that the overwhelming majority of us are forced to deal with this reality through three “coping mechanisms”: women steadily moving into the labor force, practically everyone working longer hours, with most of us being forced to “draw down savings and borrow to the hilt.”

The subtitle notwithstanding, The System is long on analysis and short on concrete proposals for change. However, Reich’s predilection for systemic change of the sort advocated by Elizabeth Warren and Bernie Sanders is abundantly clear. He has long supported Senator Sanders.

Robert B. Reich (1946-) has taught government and politics for forty years between stretches in government service. He served as Secretary of Labor during Bill Clinton’s first term (1993-97). In the 1980s, Reich taught at the John F. Kennedy School of Government at Harvard University. Since 2006, he has served as the Chancellor’s Professor of Public Policy at the Goldman School of Public Policy of UC Berkeley. There, in addition to graduate courses, he teaches a popular undergraduate class called “Wealth and Poverty,” where his strengths as a public speaker and his nonstop sense of humor stand out. The System is his nineteenth book. @@@@ (4 out of 5)

For further reading:

Previously, Mal has reviewed two other insightful books by Robert Reich:

• The Common Good by Robert B. Reich—Robert Reich diagnoses what ails American society
• Saving Capitalism: For the Many, Not the Few by Robert B. Reich—Robert Reich explains how to make capitalism work for the middle class.

(Readers can find Mal Warwick’s most popular reviews, and the most recent ones, plus a guide to his whole site, on the Home Page.)