Robert Reich recently passed through Seattle and one of his engagements was recorded on the KUOW Speakers Forum podcast. He had earlier that day been by Microsoft and I unfortunately missed the event, I will have to see if it was internally recorded and skip to the Q/A. He is currently out on a book tour for his new book “Super Capitalism”. The premise of the talk seems to attempt to explain the change in American politics from the 40s and 50s where people were widely involved and optimistic about democratic politics and organizations.He sketches out a model of how he feels the relationship between democracy and capitalism should work. In so many words he describes the idea the prisoner dilemma for consumers. You want to support some random cause such as not supporting companies involved with terrorist states or using child labor, but you rationally believe that your individual choice to not get the bet price/quality mix won’t really matter. Specifically that you can’t trust others to make the same buying choices. The solution is to control to common rules of the game via laws. However this runs into two major problems.

First, corporate lobbyist control a lot of the campaign cash flow and potential get a lot of stopping power against rules they don’t like. Reich shows this by pointing out how common Congressional chastising is without any legislation. The appearance of concern without doing anything about it. A dog and pony show that works for both the companies and the politicians. Reich avoids blaming the companies for being in Washington because the primary reason they are in Washington is that their competitors are. (Proving the point, he mentions Microsoft and Yahoo for why Google has a large presence, when it was companies like IBM, Novell and Sun is why Microsoft has its presence).

Second, The effects of globalization (Reich calls it the technology inheritance of WWII). The transportation improvements meant that more companies could compete and putting a lot ore pressure on prices. The same technology boom enabled a huge growth in investment. These two pressures build up and give companies a lot of incentive to cut cost every way possible, leading to his point that you can’t expect a company to be moral. Shame is a PR problem and it is responded to with more PR, not real change. He takes the PR shame approach to activism as a fundamentally flaw methodology. He doesn’t adequately address the next problem, with laying down laws as the approach to corporate behavior change, globalization and very weak world government means that many such laws only hurt the country passing them. He makes two counter arguments. The extra-territorial affect of the US is really large and second that doing the right thing will cost something.

This last concept that there is a cost and benefit to such actions resonates deeply for me. All to often I’ve seen otherwise smart people rely on a form of wishful thinking to believe that you can’t take actions like lower taxes or build roads and not have to pay for it somehow. Yes, yes, sometimes the system is so off that there is such an effect, but it’s bizarre to me that people believe it is the common case. This brings us to Former President Bill Clinton’s visit to campus. (You can catch roughly the same speech at slate). Clinton made almost the opposite argument from Reich. He basks in the glow of how many new non-governmental organizations now exist and how much money and affect they have. He also sells fixing global warming as something that actually benefits one’s economy instead of hurting it.

Overall I was very happy to start to feel some of architectural underpinnings of our current political system and some views of what it should be like. Reich sounded fundamentally backwards looking in approach, but was able to diagnose some malfunction, Clinton seems to be proud of some of the aspects of where we are today, but I’m not convinced that the new system works better.