Sonderbooks Book Review of The Soul of Capitalism

Reviewed November 6, 2003.
Simon & Schuster, New York, 2003. 366 pages.
Available at Sembach Library (330.122 GRE).
A Sonderbooks’ Stand-out of 2003: #3, Political Nonfiction

When I told my husband the title of this book he laughed and said that he didn’t think that capitalism had a soul. That’s exactly the author’s point. He doesn’t want to throw out capitalism, but suggests some ways of giving it a soul.

He explores several aspects of capitalism that could be improved for everyone’s betterment. The basic problem is simple to explain. Capitalism sees the ultimate good as making profit in the short-term. So if you cut down all the trees in an old-growth forest, for example, it’s seen as profit and a good thing. If you lay off workers, it makes profits go up, so it’s seen as a good thing. To make capitalism work toward the good of society, it needs to gain a more realistic view of the intangible costs.

He takes on several different aspects of the problem. One problem is the way the employer-employee relationship resembles that of serfs and lords in feudal times. He proposes employee-owned companies (not government-owned, as in communism) as one possible solution, and lists several examples where this is working out well for everyone.

Another problem is the way costs to the environment are not considered in looking at a company’s profits. The author points to groups that rate companies for their social responsibility. It turns out that these stocks in the past have actually done better than other, less environmentally or socially responsible companies. If people would refuse to invest in companies that don’t reflect their values, the power of the marketplace itself could pressure them to change.

One interesting thing about this book is that the author does not look to government to solve the problems. He’s skeptical that the federal government, at least, would be willing to make any changes. If he does talk about changing government regulations, he proposes doing so at the local level first, and hopes for a gradual change that may eventually spread to the federal level. He also insists that there is much that private individuals can do. Pension funds are a huge investor in the stock market, and he suggests that if those funds are invested responsibly, they can put pressures on companies to treat their employees well.

In every chapter, he gives examples of companies and people who have already started to change things. All of his proposed solutions are possible, because all of them are being carried out in some small form already.

Definitely an interesting book, with ideas well-worth thinking about.

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Book Reviews by Sondra Eklund

*****The Soul of Capitalism*

Opening Paths to a Moral Economy

by William Greider