Book Review: Winners Take All
The TechX book club recently finished reading Winners Take All by Anand Giridharadas. Anand's main thesis is that the elites of American society do not give more than they take. They take almost all of the gains that have come about from increases in productivity and technology. In some cases, they inhumanely exploit the working class and the poor to increase their riches further. The donations they make back to society pale in comparison to their personal wealth. The only reason the elites give at all is to maintain their reputation and protect their own way of life by influencing which problems society deems important.
The example that struck me the most was of the Sackler brothers. Their company, Purdue Pharma, produced the pain reliever Oxycontin that was largely responsible for the opioid crisis in America. When people realized that Oxycontin was highly addictive, there were movements to limit its spread, but the company lobbied and advertised heavily to make sure the drug could make it into as many people's bodies as possible. Nowadays, the Sackler brothers are remembered as philanthropists for their extravagent donations to museums.
The book challenges elites to re-evaluate their effect on society. Anand asks the "winners" to realize that their victory comes at a cost, the most important of which being the widening inequality in America. Anand doesn't subscribe to Carnegie's philosophy that inequality is a necessary and temporary by-product of progress. He believes that the world would be better off if elites restrained their taking.
I really enjoyed this book because it has made me skeptical of some teachings of capitalism. It has made me doubt many ideas that I used to accept without question - ideas that I now suspect are perpetuated by capitalism for its own benefit.
"Do Well by Doing Good", aka the Win-Win Mentality
One such idea is captured by the mantra "do well by doing good." This phrase reflects the popular modern belief that the best way to help others is by building a successful business. Ideally, in a free market, companies that bring the most value to consumers also make the most money, so it's a win-win situation. Anand frequently criticizes this win-win mentality because it is simplistic and misleading. It hides the fact that personal sacrifice is often necessary to bring about true change. In addition, there are almost inevitably losers as a result of any venture, so casting it as a "win-win" hides the losers from view and makes it easier for us to ignore the harm we're causing.
Coming back to the idea of "do well by doing good", ie. public good via private good, it seems natural for someone who wants to change the world to start a startup. But this wasn't always the case. If you lived in the 1960s and told people you were going to start a company because you wanted to improve society, they might laugh at you. Back in those days, socially-minded people pursued occupations like politics and NGOs in order to make a difference. College students joined protests instead of unicorns. On the flip side, not many people want to join the government today. What changed?
For one, people view the government as slow, beaurocratic, and unglamorous. While I think this is just a unflattering way of saying that the something is methodical and structured, it certainly seems less appealing than the move-fast-and-break-things vibe of industry. In addition, public trust in the government has dropped from around 60% to 20%. Both of these things indicate that something about the system is broken, so why are people jumping to industry instead of trying to fix it? My theory is that capitalism has convinced people that it is possible to do a lot of good while making a lot of money. No one wants to fix the system because that doesn't pay as well, so we end up with a bunch of broken systems. The great lie of the generation is that you can do just as much, if not more, good by making something new instead of fixing something old. Maybe if the market didn't steal all the talented people who want to change the world, we would have more and better politicians.
I don't think Anand is necessarily saying that it's impossible to do well and do good at the same time, but rather that people should be more critical about how much good they are doing and more thoughtful of the harm they might be causing.
"Free" Market and Venture Capitalism
One member of our book club also brought up the interesting point that the tech sector today isn't really even a free market because venture capitalists get to decide which companies survive and which don't, not the market itself. Pre-IPO, a company's valuation is determined by its investors, and could be completely uncorrelated with how much money it actually makes. In this way, the rich select the businesses of tomorrow, ie. the rich of tomorrow.
Popularity of Capitalism
Capitalism seems to have won as the prevailing economic theory over socialism. Why is that so? After reading this book, one answer would be that the elites have worked very hard, intentionally and unintentionally, to keep capitalism in place, since it is the system that fuels their wealth. Through their influence over society and politics, they could have not only lobbied for policies that were favorable to their businesses, but also promoted the popular belief that socialism (especially communism) is bad. Currently, most of the people who disagree and see value in socialist ideas are young and very liberal. Why don't more people believe in socialism? We are taught from a very young age that "sharing is caring." Of course, most implementations of socialism have not ended well, and while we should analyze and learn from these failures, I don't think they automatically debunk the underlying theory.
My theory as to why socialist societies tend to devolve into fascism is that socialism is very unstable. It requires a very powerful central authority to enforce a fair redistribution of wealth. Selecting a morally-sound and capable leader for the role is very difficult, so frequently the system breaks down. In contrast, capitalism is very stable because almost by definition it is a system where people act to serve their own best interests. As a result, capitalist societies can exist for a long time.
I'm currently taking a class called Counterculture and Revolution in Latin America. One of our readings exposed to me another potential reason for why capitalism is so popular. In chapter 11 of the book Seventeen Contradictions and the End of Capitalism, the author David Harvey presents the argument that capitalism always moves around. Whenever it has finished extracting all the resources from a particular city or country, it moves to the next economic hub. Because there is always at least one place in the world where capitalism seems to be a great success, it is easy to ignore the negative consequences it causes in previous economic hubs.
Ultimately, I think that capitalism should still be the basis for any modern economic system because it respects human nature, but we can gradually incorporate more and more progressive ideas that reduce inequality.