“Apple is touted as perhaps America’s finest firm, an innovative giant, highly productive and profitable. Its business model involves transferring the fruits of R&D, venture capital, and innovation nurtured in American labs abroad where Asian production utilizes a cheap, flexible, docile, and disposable workforce. Offshoring virtually everything in the value chain from R&D to production with barely 6% of its workforce in America, it is also an unusually disloyal American multinational. Moreover, like most multinationals, much of its profit is channeled through overseas cutouts to be hidden in tax havens, its tax burden shifted onto families and purely domestic US enterprises.”
America’s Billionaire Democracy is the most corrupt of all advanced economies. The global scold, Transparency International, ranks America as only sixteenth best in controlling political bribery, its pay-to-play governance more corrupt than Barbados or Uruguay, and on a par with Chile and Qatar. America’s low quality is documented by its “income bias,” where public policies nearly always reflect preferences of elites rather than middle class hopes for higher wages, quality public schools and the like. This low quality democracy is a consequence of recent Supreme Court rulings embracing pay-to-play in violation of original intent of the nation’s founding fathers to prevent corruption. This low quality is also responsible for rising American economic inequality – a majority since 2013 telling the Brookings Institution that the American Dream is dead, “hard work and determination are no guarantee of success.”
Billionaire Democracy outlines remedies drawing on the detailed political practices of higher quality democracies, including donation/electioneering spending limits, public funding of elections and proportional representation. It also urges reinstatement of the Fairness Doctrine to stem the plague of unconstitutional fake news violative of original intent – the founders intending that media platforms provide factual rather than fraudulent information to voters. Improving the quality of American Democracy begins with reforms at the local and state level. But it eventually requires a Supreme Court hewing to original intent by recriminalizing politics bribery and supporting fact based news.
The arguments presented in What Went Wrong are driven in part by the hope that Adam Smith’s expectations for capitalism to widely broadcast family prosperity can be satisfied eventually in America. As documented in WWW, the northern European economies do a considerably better job of that than the American version of capitalism. Wages are higher, living standards are higher, job security is better, greater shares of the population work than in the U.S. and job offshoring is rare. Don‘t mistake the arguments presented in WWW for co-determination and the Northern European wage mechanism as driven entirely by notions of fairness. A real concern is the need for reforms like codetermination to reverse the sagging American growth performance. Outside of the remarkably vibrant Silicon Valley, energy and biotechnology sectors around the nation, the elements of Reaganomics – including short-termism, weak investment and R&D, offshoring, and the Apple problem – hobble economic growth. Indeed, economic mobility has declined as wages stagnate, with most Americans increasingly frustrated with the inability of political leaders to end the Reagan-era swoon and rebuild middle class prosperity. The lesson being taught by WWW drawing on the evidence from the northern European economies is that America must return to the principles espoused by Adam Smith. He warned in the Wealth of Nations about the dangers of a government of merchants. The United States can restore the promise of the American Dream by electing leaders pledging to prioritized the prosperity of families over that of firms.