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American democratic capitalism is in danger. How can we save it?
For its first two hundred years, the American economy exhibited truly impressive performance. The combination of democratically elected governments and a capitalist system worked, with ever-increasing levels of efficiency spurred by division of labor, international trade, and scientific management of companies. By the nation's bicentennial celebration in 1976, the American economy was the envy of the world.
But since then, outcomes have changed dramatically. Growth in the economic prosperity of the average American family has slowed to a crawl, while the wealth of the richest Americans has skyrocketed. This imbalance threatens the American democratic capitalist system and our way of life.
In this bracing yet constructive book, world-renowned business thinker Roger Martin starkly outlines the fundamental problem: We have treated the economy as a machine, pursuing ever-greater efficiency as an inherent good. But efficiency has become too much of a good thing. Our obsession with it has inadvertently shifted the shape of our economy, from a large middle class and smaller numbers of rich and poor (think of a bell-shaped curve) to a greater share of benefits accruing to a thin tail of already-rich Americans (a Pareto distribution).
With lucid analysis and engaging anecdotes, Martin argues that we must stop treating the economy as a perfectible machine and shift toward viewing it as a complex adaptive system in which we seek a fundamental balance of efficiency with resilience. To achieve this, we need to keep in mind the whole while working on the component parts; pursue improvement, not perfection; and relentlessly tweak instead of attempting to find permanent solutions.
Filled with keen economic insight and advice for citizens, executives, policy makers, and educators, When More Is Not Better is the must-read guide for saving democratic capitalism.
Management consultant Martin (Creating Great Choices) makes a detailed argument that corporate America's hyperfocus on efficiency and rising profits has put the nation's "democratic capitalism" at risk. He cites evidence that U.S. economic growth increasingly benefits the affluent, leaving the poor and middle classes to fall further behind, even as they're asked to work longer and harder hours. This state of affairs, Martin contends, has left America vulnerable to political instability and ripe for antidemocratic and anti-capitalist movements. He places the blame on business executives and political leaders who believe the economy should function as a finely tuned machine producing "linear" and "predictable" growth, rather than a "complex adaptive system" that requires continual monitoring and updating to ensure it continues to perform as promised. He identifies FDR's New Deal reforms as an example of such tweaking, and makes his own proposals for reform, including tenure-based voting rights for stockholders and a progressive federal income tax rate that tops out at 65% for incomes above $10 million. Drawing from hard economic data and in-depth interviews with "regular Americans," Martin makes a persuasive case for rethinking perceived wisdom about the economy. Policy makers and business leaders will want to take note.