Reich - The Answer Isn't Socialism; It's Capitalism that Better Spreads the Benefits ... [View all]

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Robert Reich | The Answer Isn't Socialism; It's Capitalism that Better Spreads the Benefits of the Productivity Revolution



http://www.nationofchange.org/answer-isn-t-socialism-it-s-capitalism-better-spreads-benefits-productivity-revolution-1336396195

Francois Hollande’s victory doesn’t and shouldn’t mean a movement toward socialism in Europe or elsewhere. Socialism isn’t the answer to the basic problem haunting all rich nations. The answer is to reform capitalism. The world’s productivity revolution is outpacing the political will of rich societies to fairly distribute its benefits. The result is widening inequality coupled with slow growth and stubbornly high unemployment.

In the United States, almost all the gains from productivity growth have been going to the top 1 percent, and the percent of the working-age population with jobs is now lower than it’s been in more than thirty years (before the vast majority of women moved into paid work).

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But most of the gains are going to the shareholders who own the companies, and to the relatively small number of very talented (or very lucky and well-connected) managers, engineers, designers, and legal or financial specialists on whom the companies depend for strategic decisions about what to produce and how.

Increasingly, via stock options and bonuses, the owners and the “talent” are one and the same. While many other people indirectly own shares of stock through their pensions and 401-K plans, 90 percent of the value of all financial assets in the U.S. belongs to the richest 10 percent of the American population.