Reich posits that the world economy has undergone serious changes within the dimension of Supercapitalism. According to Smith (2008), immediately after the Second World War- a period of pleasant capitalism, economic reconstructions began with emphasis on democratic capitalism for a free and self regulating market. Capitalism was intended at sustaining businesses under major drive of market forces.
Democracy took a balanced approach to industrial regulations such that the needs of the industries and those of the customers were met through mutual benefit.
Many corporations in the United States took fair ground with consideration of the laid down rules and thus ensured that competition was equal, considerate and fair. Due to breakage of oligopolies and the advent of change in communication technology, competition took a different turn altogether and financialization began (Erickson, 2008).
Introduction of new technologies like the internet in the 70s led to rapid evolution of capitalism, bringing with it competitive advantages and thus taking competition to a different level since it led to globalization. Owing to the rules of competition changed, corporations took a total independent dimension declassifying oligopolies and monopolistic models were adopted with the commencement of financialization (Reich, 2007).
As focus shifted to corporate wellbeing, wage payouts shifted as working hours changed. Labor unions were formed to take care of the needs and rights of corporate workers and this led to attachment of wage to productivity (Belich, 2009). Executives were paid large sums of money for high productivity. Focus thus also shifted from effective management to fast and great productivity with little consideration of future outcomes.
As research related to defense mechanisms were being conducted to raise the levels of defense during the cold war, new communication technologies evolved, taking business completion to a higher level. Peterson and Lindson (2006) observe that distance became no longer an issue since instant communication technologies were developed.
Introduction of television saw a scramble of companies for airtime with later internet emergence leading to larger access of the world (Belich, 2009).
Concepts such as globalization had thus been coined to imply this trend. Market dominance had become a contention as some companies showed continuous dominance over other companies due to availability of relatively cheap and readily available resources. This facilitated global trade and introduced complications in the corporate regulation industry.
Consequently, according to Reich (2007) deregulation emerged as first evident in the airline industry in 1979 and the finance industry, evident in decentralization of money making to individual countries. Working hours have been extended for accommodation of what was called business diplomacy. These have totally changed business behavior in capitalism.
Major companies in the United States and across Europe suffered the effects of deregulation as they were immersed into a world of intense and ruthless competition (Polanyi, 2010). As concerns for better service delivery towards the society challenging situations emerged since worker pension and healthcare responsibilities were sheltered under their umbrella.
Based on timing, the ensued expenses became so huge such that companies opted for non-cooperation. Efforts from the workers union to secure compensation for workers extremely failed since no response was given.
Due to continuous failures in terms of responses from the respective opinions and exhaustion from workers, the unions broke down and thus workers quit these unions without meeting their demands.
Change in democracy
Democracy dictates that there exists total independence of involved parties in decision making at any given time. According (Lux, 1990) and with regard to capitalism and market forces, business democracy demanded that the introduction of rules into the market and application of these be solely a corporate responsibility free from consumer and governmental interruptions.
But with the incoming of supercapitalism, all these have been overturned with intense competition and globalization. Since large companies are scrambling for the markets in the work, little ones are left with no options of expansion. Although there have been observed benefits of supercapitalism to consumers and investors, the line between citizenship and business has not yet been fully demarcated (Sachs, 2009).
Consequently rows on two selves which include the consumer-investor and the worker-citizen. As evident in recent lobbies in Washington, corporations are putting a lot of effort in trying to influence governments to make changes that would favor them (Goldsmith, 1996). Governments in turn make responses through other bodies which are merely escape routes to avoid giving appropriate solutions to the problem.
Cato and Schmarket (2006) argue that companies have showed unwillingness to give caring responses to the situation. Interventions from the government have only been aimed at making public assurance over control of the situation but the right demarcation still remains elusive.
As a result, the society feels oppressed by the new capitalism’s work since it has to give all to these companies. This has risen due to the fact that insecurities in the job market have increased as retrenchments have become frequent with many positions previously considered as permanent have become less permanent citing reasons such low cost structuring (Reich, 2007).
As the system developed, the rich continued to be rich while the poor continued to experience poverty. Government responses have failed to accurately address the situation since it is dictated by capitalism (Brown & Garver, 2009). This has resulted into emergence of a totally new model of business that has toppled capitalism and democracy and thereby violating citizen’s rights.
Belich, J. 2009. Replenishing the Earth: The Settler Revolution and Rise of the Anglo- World. Oxford: Oxford University Press.
Brown, P. G & Garver, G. 2009. Right Relationship: Building a Whole Earth Economy. San Francisco: Berrett-Koehler.
Cato, M.S. & Schmarket, M. 2006. Building the Post-Capitalist Economy. Cheltenham: New Clarion Press.
Erickson, S.M. 2008. How capitalism has changed Western Economies. Boston: Wiley.
Goldsmith, E. 1996. The Way: An Ecological World-View. Totness: Themis Books
Peterson, M.W. & Lindson, E.M. 2006. Modern capitalism and its effects. New York: Routledge.
Polanyi, P. W. 2010. Cold war and capitalism. London: McMillan.
Lux, K. 1990. How a Moral Philosopher Invented Economics and Ended Morality. Boston: Shambala.
Reich, R. B. 2007. Supercapitalism: The Transformation of Business, Democracy and Everyday Life. New York: Alfred A Knopf.
Sachs, J. 2009. Common Wealth: Economics for a Crowded Planet. London: Penguin Books.
Smith, J.L. 2008. Postwar Developments in the corporate world. New York: Routledge.