Supercapitalism, by Robert Reich
Finally, I will come to some conclusions you may find surprising — among them, why the move toward improved corporate governance makes companies less likely to be socially responsible. Why the promise of corporate democracy is illusory. Why the corporate income tax should be abolished. Why companies should not be held criminally liable. And why shareholders should be protected from having their money used by corporations for political purposes without their consent.
That’s from Robert Reich’s Supercapitalism. I’m coming late to this party, but mostly I liked the book. It’s full of fresh thinking and most of all it is excellent on just how much invisible hand mechanisms shape an economy. It has the best explanation (and partial defense) of high CEO pay I’ve seen, namely supply and demand. If you think it is exploitation of shareholders, take a look at how much private equity pays its CEOs. And as the above quotation indicates, Reich is willing to rethink just about all the old left-wing shibboleths (what a biased word) about corporations. He separates the analysis from the moral narrative, so when you disagree with him, that point is an isolated one and it does not infect everything he says.
Reich recommends that we strengthen atrophied democratic constraints on capitalist outcomes; in his view special interest politics are just another form of capitalism and special interests are crushing voter influence. "Bryan Caplan, telephone!"
By the way, make sure you read this piece on the futility of campaign finance reform, which counts as one of the most overrated ideas.
Here is Greg Mankiw on the book. Here is another take on the book.