Saving Capitalism: For the Many, Not the Few

In Chapter 6, Reich explains that contracts are “agreements between buyers and sellers to do or provide something else” (48). He also points out that “if property and market power lie at the heart of capitalism, contracts are its lifeblood—the means by which trades are made and enforced” (48). As with property and monopoly, contracts require rules and regulations, which can be influenced by those with power. Reich also points out that technological advances and social norms about what should and should not be legal to sale have opened the way for political influence to be wielded. Citing the fact that much of what is earned on Wall Street is likely based on information unavailable to average investors, and supposedly illegal, Reich argues that “insiders fix the market for their own benefit” (53).

As with property and monopoly, the debate over government versus the free market is irrelevant compared to the debate over how the market is organized and which groups have influence over market decisions. Another example is that laws saying that contracts entered under coercion are illegal are largely ignored because buyers, sellers, consumers, and even small businesses basically have no alternatives other than entering into contracts with powerful corporations.