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Why politicians confuse citizens with consumers

If you have ever wondered why politicians tend to refer to us ordinary folk as consumers rather than citizens you’ll find the answer in the UK edition of Robert Reich’s book Supercapitalism: the Battle of Democracy in an Age of Big Business.

Available from Icon Books for £8.99 it was first published in the US in 2007 but the new edition contains a fascinating introduction that brings it bang up-to-date with the global credit crisis.

It would be hard to find a better author for that job than Reich, who was a member of now-President Barack Obama’s Transition Economic Advisory Board and was also President Clinton’s secretary of labour.

Supercapitalism is the term Reich uses to describe how economies work and to get us there he takes us on a journey that starts in the era of Henry Ford, goes through the depressed 1930s and World War II and then on to that not-quite golden age, the 1950s.

Reich says the 1950s was a decade when trade associations and unions in the US connived with the state to create a world where there was little competition or innovation but the payoff was a growing economy and a workplace where loyalty was rewarded with job security and regular pay rises.

As a result of the space race and the Cold War innovation rocked that boat. The need for the US military to get supplies to Vietnam led to the development of containerisation in a big way while computerisation coincided with an era of cheap global transport. Suddenly it seemed the future didn’t have to belong to monopolies after all.

Opportunity knocked and the new driver was lower prices for consumers as firms such as Wal-Mart aggregated purchasing power to squeeze suppliers. Returns to shareholders increased at the same time.

Reich argues that the rise of supercapitalism led to a decline in democracy and says this is our fault because we put lower prices and higher return on investment ahead of the social good.

“The purpose of capitalism is to get great deals for consumers and investors,” he states. “The purpose of democracy is to accomplish ends we cannot achieve as individuals.”

Put that way, you can see how convenient it is for politicians to get confused, especially when their political parties are bankrolled by corporate donations and their pet projects are sponsored by big business.

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