Working Within the System
William Greider is wise. A former editor at The Washington Post and Rolling Stone, now national correspondent for the Nation, he wrote Secrets of the Temple, the best book ever on the Federal Reserve. In The Soul of Capitalism he quotes John Maynard Keynes and Thorstein Veblen, seeks out gurus like Clair Brown (of Berkeley), David Ellerman (of the World Bank) and Ron Blackwell (of the AFL- CIO) -- original minds who wander off the beaten track.</br></br>Greider's starting point is that "the United States has solved the economic problem." Scarcity is no longer prevalent. Food, clothing, housing and entertainment are abundant. Markets, he believes, are intrinsically fair and efficient. Government, he accepts, tends to screw things up. Our remaining problems -- the rat race, the master-servant work relation, corporate greed, environmental decay -- are at bottom questions of values.</br></br>For Greider, true American values are rooted in small-town Protestantism, descending from prairie yeomen of our agrarian past: communitarian, work-centered, custodial. The challenge is to express these values through the market system. This can be done, he believes, by realizing the full potential of institutions that already exist, within capitalism, on a small scale. Workers can be empowered through partnerships, cooperatives, Employee Stock Ownership Plans and the ownership potential of their pension funds. Investors with the virtues of Warren Buffett can tame the corporation. Ecologically responsible investor funds can save the prairies and the forests.</br></br>The Soul of Capitalism proceeds by case and anecdote. We meet Avis Ransom, "an idealistic MBA graduate who left her business consulting career to manage Solidarity," a cooperative Baltimore temp agency. There is (amazingly) David Stockman, Greider's one- time breakfast partner, who in his earlier capacity as budget director under the first Reagan administration, scandalized Washington in a tell-all profile that Greider published in the Atlantic Monthly, but who has now reinvented himself as a "labor- friendly" turnaround consultant to companies battered by recession and the fallen market. There is William McDonough, an architect who is presently "consulting Nike on how to make a running shoe that will be biodegradable." It is all quirky, entertaining and hopeful.</br></br>Yet as you meet each new member of Greider's inspired band, you can only wonder: Are they anything more than fringe cases, stitched into a quilt that exists, mainly, in the author's mind? A few supporting statistics would have helped, but Greider, who has previously woven tight empirical narratives around everything from presidential budget policy to global currency speculation, here pretends to dislike numbers. In a passage on the potential of socially conscious investing, he writes that "commonsense logic may be more reliable than mathematical formulas." A moment's thought explodes the notion. It is certainly possible for a well-chosen subset of socially conscious companies to outperform the average. But if everyone chose socially conscious portfolios that exceeded the average, would the return stay high? Can the average outwit the average? Of course it can't. By construction, socially conscious investing is a fine art, as are many of the other activities Greider describes in The Soul of Capitalism.