John Ehrenreich, Third Wave Capitalism: How Money, Power and the Pursuit of Self-Interest Have Imperiled the American Dream

(Ithaca: Cornell University Press, 2016), 196 pp., $29.95.

This is a cogent, well-argued, highly useful book, with a conceptual hole at the center. The author explains at the onset that he will not deal with US relations abroad or their consequences at home. To pass over the related issues, however, is to miss many key points.

Never mind, for the moment. Ehrenreich returns refreshingly, in his own fashion, to a scenario fairly familiar to liberal and leftwing analysts, scholars and journalists: by the 1970s and certainly by the 1980s, the US entered a “Third Wave.” Industry as such begins a decline. The long process of chain stores and mail order houses driving out local stores now accelerates with Walmart, Home Depot, and also Amazon. (It has become difficult to recall that the popular Sears Roebuck Catalogue once had a similar impact.) Former factory towns see abandoned Main Street as the perpetual future. Meanwhile, purported “non profits” become huge cash machines for their executive officers, formerly public services are privatized, and wealth concentrates at a previously unimaginable rate.

Ehrenreich follows today’s reform-minded economists in pointing to what is called “rent seeking,” the manipulation of government policies to redistribute wealth upwards. The tax burden is shifted downward, with such ostensibly benign sectors as health and healthcare in central focus as essential steps in a seemingly irrational cycle of high-profit bad-health foods leading to illness, leading to…more medicines, more expensive medical treatments, leading to…well, the same cycle all over again. The financialization of the economy is mirrored in the financialization of the medical profession at large, and the rise of what the author rightly calls the “Medical-Industrial Complex.”

Hold the phone, as we pre-smartphone users said to each other generations ago. Even the term “Medical-Industrial Complex” comes from Dwight Eisenhower’s phrase, “Military-Industrial Complex,” with its educational spinoffs that funded vast college expansions, and these in turn came from…the Cold War and its global struggle for Empire.

Ehrenreich gives us good data and analysis of how, for instance, the coming of Medicare and Medicaid, in 1965, made possible vast public subsidization of hospitals, medical education and …pharmaceuticals, within forty years or so destined to become super profitable. Indeed, almost as profitable as the weapons trade near the center of the Pentagon budget and the beating heart of hawkish Democrats (remembering here the “Senator from Boeing,” Scoop Jackson) but also of any member of Congress seeking defense money for the home district. Keeping in mind that these health and war sectors have so much in common helps us understand the latest relationship of governance and empire, although the author declines to take us there.

Third Wave Capitalism scores especially good points on education, a subject that the author, as an educator, knows firsthand. Charter schools, as he says, not only penalize public schools at large, but also remove schooling from public scrutiny. And not by accident. Tackling school performance in a serious way would demand tackling poverty, something that American leaders are not even close to contemplating, beyond rhetoric. The role of Silicon Valley super-entrepreneurs in pushing privatization of schools is one of the major under-reported stories of American society today. “Philanthropy” has become vampiric, and is about as real as…the purported role of the Exceptional Nation in saving the world through weapons and war.

Somewhere around here, Ehrenreich’s self-imposed conceptual limits kick in. Why would anyone, emphatically including the working classes, vote against their own interest? He correctly points to the rightward shift of the Democratic Party after 1970, a shift becoming ever sharper after 1980. He argues that even the worst of the ruling assumptions today could be reversed by a return to “We the People” of the Constitution. That could happen if mass movements for change could be created on the scale of the 1930s or 1960s. “Will our marching song come again?” in the last phrase of the conclusion, mirroring Paul Robeson in “Ballad for Americans,” a song that rivaled Kate Smith’s “God Bless America” for a few years after 1941, i.e., before Harry Truman took office.

The Great Society had some great ideas, but Lyndon Johnson effectively threw them away for a war that should never have been fought except in defense of Empire. If, to go on a bit, Jimmy Carter has been a fine fellow since leaving office, nevertheless the “Carter Doctrine,” claiming US prerogative to invade anywhere in the Middle East that its interests were purportedly threatened, was his lasting legacy. The question does not even need to be posed for Bill Clinton, who completed the Reagan Revolution, although it can be posed for Obama, the antiwar candidate who placed the hawk in the chicken coop of global suffering. As this essay is being written, we face the possibility of something worse from a liberal or neoliberal blessed by a host of celebrities including…Henry Kissinger.

Did the Democratic Party really begin its shift to the Right after 1972 because of ill-will and a failure of liberal nerve? Ehrenreich could have argued more persuasively that the multiple crises of the 1960s allowed many millions of Americans to challenge the imperial impulse, for a little while, and roll back the Cold War premises that would continue, most remarkably, past the Cold War. The financialization of the economy uncovered inherent tendencies that have become ever stronger in time, and are not to be reversed by a hawkish liberalism, whatever domestic promises may be made for inclusion, i.e., meritocracy. Unless and until military-industrial assumptions and Pentagon logic with all the accompanying effect upon the economy can be truly pushed back by social movements wanting a different society, we are not likely to make much progress.

Third Wave Capitalism is a deeply sincere book, mirroring its author’s lifetime commitment. Read it, find the limitations and go beyond them.

Reviewed by Paul Buhle
Madison, Wisconsin
paul_buhle@brown.edu

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