Robert Reich’s “Supercapitalism” Chapter 2 Analysis

Robert Reichs Supercapitalism Chapter 2 AnalysisRichard (Ben) DowdenAnalysis of a chapter from Robert Reichs SupercapitalismOutline of Reich, chapter 2Argument stunnedline of Reich, chapter 2Overall argumentSince the 1970s ambition between corporations grew as technology developed, American companies began to engage do good to breathe competitive resulting in supercapitalism triumphing over democratic capitalism.ReasonsGlobalisation, new drudgery processes and deregulating increased competition heavy(a) consumers and investors more choices.Increase in investor horticulture drove companies to compete for shareholders (i.e. highest possible proceedss) regardless of their social responsibility.The decline in union membership as a result of pursuits in return has led to the decline of power workers have over their employers, the corporations.Evidence for close 1In role 2 (pp. 56-60), Reich describes how technology developed for pulmonary tuberculosis in the Cold War had inf luence over American concern. He asserts the technology had three indirect outgrowths globalisation, new production processes and deregulation (p.60). He argues that each of these outgrowths increased business competition giving concrete obliterateorse for each in the following sections.Section 3 (pp. 60-63) argues that globalisation has discount the cost of foreign trade creating opportunities for global add together fetter. Reich states that the Vietnam War resulted in the growth of commercial, global logistics. Reich gives concrete secern of how seven new containership companies entered the foodstuff in the year following the war and how industry grew at a high rate thereafter (p.61).Moreover, Reich argues this created the concept of global supply chains. Reich notes the great increase in American imports from American owned overseas factories between 1969 and 1983 (p.62). He then gives examples describing large companies global supply chains (p.62).Section 4 (pp.64-65 ) argues new production processes trumped the economies of scale used by the oligopolies resulting in a martplace growing in complexity. Reich gives examples of how new production processes allows specialisation. He explains how standardised steel gave way to specialised galvanised steels designed for a niche market (p.64). Furthermore, a huge brand like Coca-Cola confront a variety of specialised drinks taking away Coca-Colas market share (p.65).In section 5 (pp.65-70) Reich argues that as businesses innovated, new profitable, nevertheless restricted opportunities were discovered within regulated markets, companies lobbied for deregulation, driving competition. Reich states that in about cases, deregulation put companies out of business since they lost the cross-subsidies from other previously regulated, profitable companies. He gives cause of the Bell Systems segmental telecommunication companies based in the country graceful unviable, opening business opportunities to small er, extremely competitive companies (p. 68). Furthermore, trucking and airline deregulation led to added competition, specially in freight (p.69).Evidence for reason 2At the end of section 5 (pp.65-70) Reich quotes Edward E. Furash stating that due to the trade in psyche in Americans management of wealth, the American financial system forget shift towards competing for investors (p.70). Reich describes the financial deregulation of banking giving new opportunities to investors among others he gave evidence of railway line broker, Merrill Lynch setting up mutual funds (p.67). Reich seems to lead the increase in investment choice and effectiveness because of deregulation to savers becoming investors.Reich backs the claim with statistics at the start of section 6 (pp.70-75) citing the increase in percentage of households owning stock (pp.70-71). Reich goes on to say this likewise coincided with the bull market of 1980-2000 (p.71). His overall argument here is that companies had t o compete for investors which meant maximising returns.Reich gives evidence of how profit margins rose from the beginning of the 1980 to 2000 at a high rate of change (pp.72-73). He also gives evidence of how the number of companies that ran at lower profit margins that were subjected to hostile takeovers increased by a factor of 11 from the 1970s to the 80s (pp.73-74).In Section 7 (pp.75-80), Reich begins by quoting the condition CEO of Coca-Cola stating companies have the sole responsibility of generating returns for their investors (p.75). He continues to point out a CEOs job security is increasingly attributed to the attach tos stock price recommendation. 50% of CEOs companys stock was downgraded in investment recommendation were fired in the following sestet months (p.76). Reich uses evidence of how 60% of senior executives in the Fortune 500 companies had been at their firm for fewer than six years (p.76).His argument is that CEOs no longer have room to worry about the soc ial consequences of their organisation. He uses the example of Malden Mills, a family-owned textiles company which ran at a injustice manufacturing in New England. Their CEO did not want to close the pulverization since the local economy had high dependencies on it he was eventually sacked by the companys creditors (p.79).Evidence for reason 3Section 8 (pp.80-86) focusses on the decline in union membership scratch from the 1970s. He cites evidence from the U.S. Bureau of Labor Statistics of how union membership cursorily declined beginning in the 1970s (p.80). He explains this is a consequence of employers contesting unions, giving concrete evidence of this through the decrease of uncontested union elections (p.80). Reich also gives evidence of how the rate of illegal dismissals of union members rose through the 1970s and into the 90s (p.81).Reichs explanation for corporations behaviour was related to lancinating the costs of the payroll to remain competitive as consumers and investors looked for the cheapest deal. Reich gives concrete evidence of how the unorganised sector of the American economy grew at a greater rate than the unionised sector (pp.82-83). This increase in opposition arising from nonunionised companies forced unionised corporations fight the unions to remain competitive. Reich uses evidence from a cathode-ray oscilloscope of industries to describe this citing the air travel industry (p.83), the Big Three American car manufacturers (pp.83-85) and the construction industry (p.85).Reich goes on to explain how the prevalent work sector was never unionised, consequently suffering low wages. Reich uses the evidence of how members of the public services industry went on strike responding to their wages being cut as anti-union Wal-Mart entered their industry (p.86).Reflection How the chapter intersects with my lifeThe chapter reaffirmed my own opinion that wealth distribution in developed nations, particularly Americas, is unequal. It shows that while deregulation may improve its GDP per capita, it doesnt guarantee a high quality of life. In fact, in more regulated economies like in Scandinavia, quality of life indicators are higher since wealth distribution is farthermost more equal (Wilkinson Pickett, 2009).The chapter is interesting, considering the debate surrounding the deregulation of tertiary culture in Australia. It does give universities ability to form an identity, which is a way of manifestation it encourages elitism. After all, a universitys prestige is generally attributed to how well-endowed it is. merely is it just the first step to university privatisation? Will universities eventually just pursue profit like companies?List of referencesReich, R., 2008. Supercapitalism. New York Alfred A. Knopf.Wilkinson, R. and Pickett, K., 2010. The spirit level. London Penguin Books.