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Making Capitalism Work: All Makes, All Models

Leonard Silk
Mark Silk
Robert Heilbroner
Jonas Pontusson
Bernard Wasozv
Copyright Date: 1996
Published by: NYU Press
Pages: 248
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  • Book Info
    Making Capitalism Work
    Book Description:

    In 1995, Republicans came to power in the United States with an ambitious program proposing to embrace a degree of laissez- faire economics unknown for generations anywhere in the industrialized world. Simultaneously, politicians, entrepreneurs, and economists championed the new bastions of unregulated capitalism that sprung up in such unfamiliar precincts as Beijing and Moscow. Yet to date many free-market economic policies, be it in Prague or here in America, have not lived up to their initial promises. In fact, it has become a common joke in Russia that capitalism has succeeded in making communism look good, a feat unaccomplished by the Kremlin in its 70 year reign. In Making Capitalism Work, Leonard and Mark Silk analyze the failures and successes of capitalism as seen most recently in the former Soviet Bloc, Japan, China, the European Community and the United States. While recognizing that capitalism has been successful in a number of countries, the authors point out that overly simplistic policies advocating an unfettered capitalism ignore too large a range of issues central to the formation of any moral economic system. Viewing capitalism as simply one of a number of economic systems, Leonard and Mark Silk address such issues as the obligation of the rich to the poor, the responsibility of the state to insulate its citizens from market fluctuations, the responsibility of present generations to provide for future ones, and whether economic systems can set the proper extent and limits of individual rights and freedoms. An important, concise, thought-provoking book this is the last book Leonard Silk wrote before his death late last year and has been completed here by his son, Mark.

    eISBN: 978-0-8147-3969-3
    Subjects: Business

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Foreword
    (pp. ix-xiv)
    Richard C. Leone

    Capitalism’s greatest virtue—like democracy’s—may simply be that it works better than any other system. Thus, the disappointment that many Americans feel after two decades of slow growth, income stagnation, and an increase in wealth inequality is tempered by the knowledge that real reform is only practical in a fairly narrow range. Like other nations with long experience with the vagaries of markets, we are well past the blurred perception of new lovers; we have grown if not completely comfortable with the flaws in the “marriage” of democracy and capitalism, at least satisfied that we cannot do better. Much...

  4. Preface
    (pp. xv-xx)
    Mark Silk
  5. ONE The March of Capitalism
    (pp. 1-18)
    Leonard Silk and Mark Silk

    Three years after the dream of communism guttered out in the ashes of the Soviet Union, the Republican Party won a majority of seats in both houses of the U.S. Congress and announced a new capitalist revolution. “[W]e have to replace the welfare state with an opportunity society,” declared Newt Gingrich, the soon-to-be Speaker of the House of Representatives, just after the November 8, 1994, congressional elections. “It is impossible to take the Great Society structure of bureaucracy, the redistributionist model of how wealth is acquired, and the counterculture value system that now permeates the way we deal with the...

  6. TWO The Challenge of Slow Growth
    (pp. 19-32)
    Leonard Silk and Mark Silk

    In a sense, the Cold War could not have come to an end at a worse time. At the very moment of capitalism’s triumph, the industrialized Free World was entering a painful and protracted economic slowdown such as had not been experienced since the end of World War II. This international recession exacerbated impulses to nationalism, regionalism, and protectionism, and increased the strains upon social cohesion around the world.

    The growth rate of the industrial countries fell from 4.4 percent in 1988 to 3.3 percent in 1989, 2.6 percent in 1990, 0.9 percent in 1991, and 1.7 percent in 1992...

  7. THREE American Contracts
    (pp. 33-58)
    Leonard Silk and Mark Silk

    In many countries, East and West, developed and developing, the terms “capitalist” and “capitalism” remain pejorative, synonymous with greed and selfishness. But in others, especially the United States, the terms are honorific. Many Americans identify capitalism with Americanism and consider competing economic “isms,” whether socialism, communism, or feudalism, as by definition anti-American.

    In fact, much of the world sees the United States as the epitome of capitalism, and rightly so. For here, the passion for growth, founded on technological progress and free enterprise, became virtually a national religion. InThe Protestant Ethic and the Spirit of Capitalism,Max Weber was...

  8. FOUR The Soviet Bloc in Transition
    (pp. 59-80)
    Bernard Wasow

    In the face of steady decline in popular support for reform in the Former Soviet Bloc (FSB), a set of stories has come into circulation about economic change there. In this conventional wisdom, the debate between “Gradualism” vs. “Big Bang” was won by reformers in Russia and in most of Eastern Europe; decisive reform, continued against considerable opposition, has borne fruit; much of Eastern Europe is growing vigorously and Russia is expected to show positive growth very soon; even laggards—Ukraine and the Asian republics—are haltingly pledging to do the right thing: stabilize, liberalize, and privatize their economies.


  9. FIVE The Chinese Puzzle
    (pp. 81-96)
    Leonard Silk and Mark Silk

    The above lines come from a poem that a man named Qing Xian I sent to the Communist Party newspaper in Guangdong I shortly before the 1989 massacre of pro-democracy demonstrators in Beijing’s Tiananmen Square. The verse neatly encapsulates the model China offers of capitalist economic development; one that juxtaposes the shame of political repression, symbolized by the Tiananmen tragedy, with a degree of economic liberalization that has transformed the still officially communist country into a powerhouse of production and entrepreneurship.

    Since 1979, the Chinese economy has grown an average of 9 percent per year—more than double the rate...

  10. SIX Japan at the Crossroads
    (pp. 97-118)
    Leonard Silk and Mark Silk

    The persistence of Japan’s huge trade surplus, based on Tokyo’s determination to acquire external assets rather than invest domestically, has raised the question of whether Japanese capitalism is essentially incompatible with capitalism in the West. Indeed, some economists maintain that if the Japanese system is permitted to continue, it will undermine the world economic system. Supporting aggressive efforts to force Japan to open its markets and the use of managed trade as a means of getting a “fair share” of those markets, a number of ranking Clinton trade and economic officials did not hesitate to admit sharing these “revisionist” views....

  11. SEVEN Whither Northern Europe?
    (pp. 119-146)
    Jonas Pontusson

    Since the end of the Cold War, the new laissez-faire advocates have taken aim at the welfare state, consigning it to the dustbin of history as an unacceptable halfway house between socialism and the free market. In the considered opinion of House Majority Leader Dick Armey, the result of welfare-state expansion in Western Europe, as in the United States, has been “a stagnant economy, high and persistent unemployment, and little incentive to further achievement” But Armey takes comfort that “even our European friends, the inventors of the welfare state, are themselves getting on board the Freedom train”¹

    There is no...

  12. EIGHT Military Spending as Industrial Policy
    (pp. 147-166)
    Leonard Silk and Mark Silk

    In recent years, few government activities have drawn such undisguised contempt from American conservatives as industrial policy, or the promotion of private enterprise after the manner of the Japanese Ministry of International Trade and Industry. Pointing to Clinton administration programs to spur advanced civilian technology and the development of a cheaper, more fuel-efficient automobile, Dick Armey calls industrial policy a “misguided and often corrupt” effort to pick winners and losers in the market place: “Proponents of industrial policy normally talk of ‘private-public partnerships to promote the industries of tomorrow’ but usually it turns out to be a give-away to the...

  13. NINE The Future of Capitalism
    (pp. 167-188)
    Leonard Silk and Mark Silk

    In the ideology of the American right today, what makes for national prosperity is some combination of laissez-faire economics, minimalist democratic government, traditional religion, and middle-class virtues.

    “We must,” declares Newt Gingrich, “rethink all the things that inhibit our ability to compete: regulation, litigation, taxation, education, welfare, the structure of our government bureaucracies.”¹ Democracy and capitalism “work together,” says Dick Armey, and both derive from a higher power: “We have been called to Freedom by God. I think the free market arose from that calling.”² In the view of the Christian Reconstructionist David Chilton, “Godly cultures have the ‘Puritan work...

  14. Epilogue: The (Political) Economy of Capitalism
    (pp. 189-206)
    Robert Heilbroner

    It is one of the many oddities of the study most intimately connected with the workings of the social order in which we live that a curious inhibition deters its practitioners from mentioning its name. I am speaking of the reluctance of most conventional economists to use the word capitalism. We hear a great deal about “market systems,” “free enterprise systems,” and the like, but the one term that gives institutional specificity to our mode of economic organization is curiously absent from the professional literature that analyzes it. Indeed, “literature” may itself misrepresent the situation: An intelligent alien, coming across...

  15. NOTES
    (pp. 207-218)
  16. INDEX
    (pp. 219-228)
  17. Back Matter
    (pp. 229-229)