Can Capitalism Survive?

How a free market economy has warped our social systems—and American values

Posted on May 11, 2020 in Review of the Week

Can American capitalism survive? : why greed is not good, opportunity is not equal, and fairness won’t make us poor

Pearlstein, Steven. St. Martin’s, 2018
244p index, 9781250185983 $27.99, 9781250185990

Pulitzer Prize–winning journalist Pearlstein argues that American capitalism today focuses on shareholder returns to the exclusion of all other values, thereby “undermining trust and discouraging socially cooperative behavior” across all US institutions. This shift to supply-side economics has weakened the “social capitalism” that “provides the support for formal institutions and unwritten rules and norms of behavior that foster cooperation and compromise.” Pearlstein believes “there is a rich and important conversation still to be had about what kind of society we want and what variety of capitalism would best achieve it.” Noting that Adam Smith’s Wealth of Nations became the bible for an “economic ideology based on self-interest, rational expectations and efficient markets,” Pearlstein reminds readers that Smith’s earlier treatise, The Theory of Moral Sentiments, provides an important social context. “For Smith, success in commerce required the development of … characteristics such as economy, industry, prudence and honesty. As he saw it, the desire for ‘luxury’ and the desire for ‘virtue’ could be reinforcing—but only if self-interest were tempered by a concern for the well-being of others.” The steps Pearlstein recommends are not new, but they are grounded in thorough research and illustration from market-based economic systems across the world. Erudite, readable, and highly recommended.

Summing Up: Highly recommended. General readers; upper-division undergraduates through faculty.
Reviewer: M. S. Myers, emerita, Carnegie Mellon University
Subject: Social & Behavioral Sciences – Economics
Choice Issue: May 2019

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