Turbo-Capitalism: Winners and Losers in the Global Economy by Edward Luttwak HarperCollins Publishers 1999 290 pages $26.00 Reviewed by David L. Littmann
It's always tricky for a reviewer to judge a book written by a classmate. That's the case here. Edward Luttwak is a good writer, but has written a book that, while purporting to be about economics, is actually the stuff of worn sociology and tired psychology.
As the title, Turbo-Capitalism, indicates, Luttwak is aware of the economic power of market capitalism. He goes to great lengths describing the efficiency, wealth-creating track record, and possibilities of markets and their superiority over socialism and other government-directed economic systems. He clearly explains how capitalism's efficiencies and moneymaking benefits are changing the world.
But Luttwak doesn't stop there. This is just point one on the journey to lambaste the beast he identifies as "turbo-capitalism," a capitalism infused with technology, free trade, deregulation, and the most recent supercharger: privatization. Luttwak swoons over the "good-old days" when markets were constrained by punitive tax rates on the rich, redistributive social policies, and regulations covering nearly every industry, from transportation and energy to agriculture and communications. When government was there to constrain capitalists, greedy corporate executives, and unfettered entrepreneurship, consumers were protected, workers felt more secure and earned more, and families had a higher quality of life. Less stress, less crime, less pornography, Luttwak declares.
Alas, "turbo-capitalism" blows all that away, particularly in nations that haven't grown up with capitalism. Luttwak makes a hackneyed point followed by an interesting one. He argues that the new post-1970s strain of capitalism is extremely tough on most American families. Technical change, longer work weeks, greater competition from abroad, proliferating two-income households, sudden mass firings, repeated layoffs, and increased labor mobility with the added distance from loved ones it requires-all this creates crime and alienation. The same complaints have been heard and refitted over and over.
Yet he follows with the challenging point that two forces operate in the United States to avert wholesale revolt against the evil fallout of turbo-capitalism. First is the legal system, where two million lawsuits per year against U.S. companies deliver "empowerment" and bring restitution to the "economically victimized" among the population. Second is our Calvinist value system. He defines the Calvinist system by three interconnected rules: (1) winners (that is, the rich) diminish envy by self restraint, giving to charity, and not overflaunting their wealth; (2) most losers blame only themselves for their fate; and (3) both winners and losers vent their frustrations by demanding harsh punishment for rebellious losers. Luttwak warns that other nations importing turbo-capitalism generally lack these institutionalized safeguards of societal stability and therefore risk being destabilized to the point of destruction if capitalism is not restrained. …