The Specter Haunting Your Office

1.

Donald Davis was not concerned about imports in the late 1960s, when he started out as CEO of the Stanley Works, the country’s leading manufacturer of hand tools. By the early 1980s, the challenge of competing against inexpensive tools made in Taiwan, Korea, and China had swept most of Davis’s other concerns aside. His first response was a plan to streamline management, reducing the company’s white-collar ranks through attrition. An old-school CEO who had been with Stanley most of his adult life, Davis considered layoffs a last resort. But by the time he stepped down as CEO in 1987, hundreds of factory workers had lost their jobs on his orders.

His successor, Richard Ayers, had the advantage of knowing what he was in for. An industrial engineer by training, Ayers mapped out a long-term strategy that called for layoffs, plant closings, and outsourcing: sledgehammer and crowbar production was moved to Mexico; socket wrench production to Taiwan. But the company also invested in making its domestic operations more efficient, and Ayers took special care to preserve jobs and facilities in New Britain, Connecticut, where Stanley had been a major employer for more than a century. By the mid-1990s, revenues had stabilized, profits were up, and Ayers could reasonably tell himself that his “evolutionary” approach had worked.

Wall Street, however, was not impressed. Securities analysts, comparing the jobs eliminated by Ayers with the layoff numbers at other old-line companies—Scott Paper (11,000), Sears (50,000), General Motors (94,000)—suggested that Stanley’s key problem might be leadership rather than imports. At age fifty-five, according to Louis Uchitelle’s The Disposable American, Ayers concluded that he did “not have the stomach” for any more job-cutting.

When Ayers retired, Stanley’s directors turned to an outsider. The new CEO, John Trani, approached the import question with a clear mind. In his seven years as CEO, he shifted virtually all tool production to East Asia and Mexico, closed forty-three of Stanley’s remaining eighty-three plants, cut the payroll from 19,000 to 13,500, and reduced its presence in New Britain to, in Uchitelle’s words, “a collection of mostly empty factory buildings and reproachful former workers.”

Through the story of the three Stanley CEOs, Uchitelle traces a mental journey taken by a great many top managers over the past few decades, and it would be hard to find a better distillation of the new mindset than his brief account of an interview with Trani in November 2004 (just a few days before he, too, retired, with an $8 million bonus and a $1.3 million-a-year pension). “Layoffs and plant closings,” Trani says, “are not such a rare event anymore that one generally makes a big deal out of them.” Scarcely mentioning the laid-off workers, he acknowledges no hesitation, no regret—in fact, no alternatives. The story, as he tells it, comes down to the difference between successful leaders, who “look at reality as it exists,” and unsuccessful ones, who make the mistake of “hoping for it to change.”

Trani came to Stanley from General Electric. In his attitude toward layoffs he resembled his former boss, Jack Welch, who had pushed more than a hundred thousand workers off the GE payroll. Welch’s combative style has gone out of fashion lately; in fact, Uchitelle had something to do with that. A longtime reporter for The New York Times, he was largely responsible for “The Downsizing of America,” an attention-getting series of Times articles on the mass layoffs of the early and mid-1990s. Those articles helped inspire a backlash. Few CEOs, questioned now about layoffs, would permit themselves to boast, as Trani did, of “taking out” workers—as in, “We took out 23 percent of the people” at Best Access, one of the companies Stanley acquired. In his actions if not his affect, however, Trani speaks for a school of management that remains ascendant. He drove Stanley down the path of a great and continuing migration—away from the postwar view of the corporation, whose success rested on a secure workforce and a strong local economy, toward what Greg LeRoy, in The Great American Jobs Scam, calls the “rootless corporation,” which defines success by financial measures alone, making it possible to “save” a company by destroying much of what it was.

“The Downsizing of America” came out in March 1996—not the best moment, in hindsight, for a 40,000-word lament on the theme of growing economic insecurity. Inflation and unemployment were falling. The stock market was rising. In Silicon Valley, Washington, D.C., and other centers of optimism, influential commentators were turning out books and articles intended to explain why, unlike previous good times, these could be expected to last virtually forever. Even many of Uchitelle’s journalistic peers thought the Times had been too intent on telling an old, downbeat story to notice the new story of America’s astonishing resurgence. In The Disposable American, Uchitelle makes it plain that he is writing about a long-term change—one that neither began nor ended in the 1990s, and one that transcends even the wrenching adjustment of an economy moving from manufacturing toward information and service. “The permanent separation of people from their jobs, abruptly and against their wishes,” he asserts, has become “standard management practice.”

It’s a fair statement. Over the past quarter-century, the victims (and potential victims) of layoffs have come to include managers, professionals, and workers in such growth industries as banking and telecommunications. Hardly any company is too successful nowadays to consider a large-scale cutback in jobs. Early last year, Intel was showering cash on its shareholders in the form of dividends and share buybacks after reporting record 2005 profits of $12.1 billion (partly thanks to a custom-made tax break known as the American Jobs Creation Act). None of that kept CEO Paul Otellini from announcing, several months ago, plans to eliminate 10,500 jobs—10 percent of Intel’s total—in order to become a “more agile and efficient” company.

The modern layoff is frequently a hidden layoff, entered in the personnel records as a buyout, an early retirement, or the severing of relations with someone deemed a contractor rather than an employee. Procter and Gamble has unloaded some 20,000 employees since 1993, Uchitelle says, while scarcely registering a blip on the Bureau of Labor Statistics’ count of involuntarily displaced workers. With all their omissions, however, even the official data suggest a sharp decline in job security. In 1978, a middle-aged American male could expect to remain with the same employer for eleven years, according to BLS figures. Now it’s 7.5 years. Over that same period, the average duration of unemployment has lengthened from thirteen to almost twenty weeks. The long-term economic damage that people suffer has grown, too. If you factor in the impact of foregone pay raises in the old job and lower wages in the new one, according to the Princeton University economist Henry S. Farber, the typical laid-off college graduate now suffers a 30 percent loss of income, up from 10 percent in the early 1980s.

Uchitelle sees Jack Welch as a pivotal figure. Before he came along, a CEO was expected to manage the existing enterprise. Welch enlarged the job description: lifting a page from the corporate raider’s playbook, he promised to manage the shareholders’ capital as well, by maintaining a steady lookout for more profitable places to put it. There is a case to be made for his approach. It may be better for a company—better even for its workers, and for the economy—to have layoffs spread over time rather than deferred until a moment of crisis. What today’s managers like to call a “flexible workforce” has arguably helped American corporations seize opportunities they would have missed if the US had the kind of employment protection that exists in, say, France. Uchitelle is not dogmatic on these points. He simply wants it acknowledged that we are going through something more than a few bumps on the road to “a new equilibrium at the high end of innovation and production.” Permanent disequilibrium, he argues, would be a more accurate picture of where we’re headed.

Uchitelle’s harsh view of the new workplace order sets him at odds not only with corporate leaders but with economic advisers to the last four presidents. Layoffs, he reminds us, were a hot issue in the 1992 presidential campaign. Although Ross Perot’s “great sucking sound” is better remembered, Bill Clinton also came down hard on companies that closed factories where Americans made “a decent standard of living” while opening “sweatshops to pay starvation wages in another country.” Candidate Clinton wanted corporations to spend at least 1.5 percent of their earnings on “continued education and training.” (Companies that made such a commitment were less likely to let employees go, research showed.)

But once he became President Clinton—and as the budget deficit moved to the center of his thinking—continued education and training got a new name and spin. Now the Clintonites began to speak of “lifetime learning,” which was more exhortation than policy and directed mainly at employees, not employers. Americans who had lost their jobs or who sensed their skills becoming outmoded were told that they could take charge of their careers, go back to school, and emerge retooled and “reempowered.”

While the policy experts may have believed some of this, it bore little relation to the experience of laid-off workers around the country, according to Uchitelle. There were many retraining programs, but scarcely any actual retraining, he says, largely because few appropriate jobs were waiting to be filled even in the surging economy of the late 1990s. The first order of business in many retraining programs was to defuse anger and lower expectations—a process known in the trade, he reports, as “housebreaking.” In The Disposable American, Uchitelle describes an Indianapolis program created largely for United Airlines mechanics who lost their jobs when the company bailed out of an advanced maintenance shop for narrow-body jets. The mechanics show up looking for tips about companies that might be hiring or new careers beckoning. What they receive, mostly, is airy wisdom about attitude, interpersonal relations, and the inner self; at least one classful gets free copies of the global best seller Who Moved My Cheese?, which warns those in economic distress not to be led into indignation or dismay by the overly complex human brain. Far better, the book suggests, to adopt the existential pragmatism of mice: No cheese in that corner? Check out this corner.

Uchitelle is a fine reporter. In The Disposable American, he follows several of United’s mechanics as they head out into the world of the downsized. After twenty-five years in the airline industry, Ben Nunnally, a specialist in delicate wingskin repairs, becomes a window-washer. Erin Breen goes back to college, gets an engineering degree, and winds up as a janitor in the Indianapolis public schools. Tim Dewey, who has been through one layoff already, resolves to go into business for himself rather than run the risk of a third. With his wife and children, he moves to the Florida panhandle to run a water taxi service, impulsively charging the $54,000 purchase price on three credit cards. He spends five months “hawking boat rides to passing tourists,” as Uchitelle puts it, before the business goes bust and the family goes bankrupt. A few hard knocks later, he grabs a chance to return to his old line of work for $17 an hour (half his United pay) as an employee of one of the non-union subcontractors he and his former coworkers had scorned.

As well-paid blue-collar workers, union members, and, for the most part, males without college degrees, United’s mechanics were out on a limb. But Uchitelle finds much the same pattern of downward mobility among women, white-collar workers, professionals, and executives. The “vast majority of laid-off workers never get back to where they were,” he writes. Moreover, he finds, being laid off is a “fundamental in-the-bones blow to ego and self-worth.” People are “cut loose from their moorings and rarely achieve in their next jobs a new and satisfactory sense of themselves.”

“The Downsizing of America” was criticized for treating the postwar era as the natural order of the US economy. The relatively secure employment of the 1950s, 1960s, and 1970s was historically exceptional, Uchitelle acknowledges, and it was secure mainly for Americans fortunate enough to land full-time jobs with major corporations or professional firms. Nevertheless, he regards the ideal as one to cherish and build on. To Uchitelle, the labor practices that others now celebrate as bold and unprecedented look a lot like those of the nineteenth-century robber barons. We should hold today’s corporate leaders to a higher standard, he argues, because they know better—or, at any rate, because more is now known about what stable employment means to mental and physical health.

Resentment and self-castigation are recurring themes in The Disposable American. Persuaded to accept a buyout package after twenty-five years at Procter and Gamble, Elizabeth Nash seems unable to find any source of self-confidence other than the scraps of contract work that her former employer throws her way. “It vindicates that I have value,” she says. Some people, of course, have more of what it takes to hop from job to job and stay afloat emotionally as well as financially. Among the United mechanics, Uchitelle cites Craig Imperio, who after moving to Georgia and taking a job with Pratt & Whitney, the engine maker, networks around the clock, plays golf with his superiors, and earns a promotion to quality engineer. (Even then, his $50,000-a-year salary remains about $20,000 short of what he made in Indianapolis as a mechanic.) Imperio’s brand of resilience could become more widespread as time passes and freelancing becomes an increasingly common way of life. But in the here and now, Uchitelle reasonably insists, lifetime learning is a delusion—and a cruel one, providing cover for layoff-prone companies and setting unrealistically high expectations for layoff victims, who then blame themselves when their experiences fall short.

Layoffs can be unavoidable, Uchitelle acknowledges. His quarrel is with corporate leaders who do not seek to avoid them—and with those, in the corporate world and elsewhere, who count the cost purely in material terms. In conversations with layoff victims, Uchitelle emphasizes the systemic nature of the problem. People tend to “agree perfunctorily,” he writes, before going “right back to describing their own devaluing experiences, and why it was somehow their fault or their particular bad luck.” Even when thousands of jobs are eliminated at once, few can depersonalize the experience.

Uchitelle resists the temptation to spell out an anti-layoff program. His caution arises partly out of a temperamental inclination to let his reporting speak for itself, and partly out of a bleak assessment of the political world’s readiness to entertain the measures he would be tempted to propose. His policy recommendations really boil down to one: when we think about layoffs, we should consider the full range of consequences, and, above all, the emotional and psychological ones, which are, he says, “deep, consistent, and ignored in the political debate.”

Ignored and, as he shows, compounded—and not just by callous rhetoric. United could abandon its Indianapolis center with impunity, turning its back on a spectacularly efficient facility, because it would not have to continue making mortgage and maintenance payments of $37.5 million a year. That responsibility passed to the taxpayers of Indiana and Indianapolis under the terms of a 1991 agreement in which United had received the land and $320 million in cash—more than half the facility’s total cost. The city and state had done this in the name of “economic development,” a seedy business that is briefly discussed in The Disposable American and thoroughly dissected in Greg LeRoy’s The Great American Jobs Scam.

2.

The economic development story goes back to the 1930s when a group of southern governors set out to capture some of the manufacturing business of the North by offering cheap capital on top of the traditional lure of cheap labor. In more recent decades, the practice has gone national, and the private sector has taken firm control. To work their will with job-hungry public officials, corporations now routinely deploy teams of lobbyists, site consultants, and other hirelings. The formula rarely fails: drop word of a planned expansion or relocation; create the illusion of a wide-ranging search; overstate the company’s own investment and the number of jobs involved; hire fancy experts to talk about the economic ripple effects; walk off with huge subsidies and tax concessions.

Among the southeastern states, North Carolina once had a reputation for refusing to play the economic development game; its relatively prosperous economy was founded on infrastructure, education, and public investment. Nevertheless, the state was easy prey for Dell Computer when, in 2004, the company dangled the prospect of a factory in the Piedmont Triad area. So anxious was the administration of Governor Mike Easley to land the prize that state officials became stooges in Dell’s efforts to pit one North Carolina community against another. The company eventually wangled $37 million in tax incentives out of Winston-Salem and Forsythe County, on top of a $267 million subsidy from the state; the total far exceeded the cost of the plant property, and construction combined. After the deal was made, leaked documents revealed a negotiating process that resembled an organized-crime shakedown. “[I’m] not wowed here,” Dell’s chief emissary complained at one point, adding that a twenty-year income-tax exemption was “my line in the sand.” A few weeks later, he was threatening to pull out “unless I can get that income tax resolved.”

Was Dell really prepared to go elsewhere? Most companies, LeRoy shows, enter the process with their minds made up. Site selection experts, when they are not off helping companies stage their elaborate “searches,” acknowledge that business fundamentals, such as access to key customers and suppliers, generally carry more weight than subsidies do. But while the game may have little to do with where companies decide to locate, it has everything to do with the taxes they pay. LeRoy puts the national cost of these deals at $50 billion a year; they go a long way, he says, toward explaining a sharp decline in corporate taxes as a share of state revenues—from 9.7 percent in 1980 to about 5 percent today. The falloff in some states has been even more precipitous. Corporations paid a third of all taxes in Arkansas as recently as the 1970s; by 2002, the figure was 2 percent.

Beyond the injury to city, county, and state treasuries—and the services they fund—the economic development process “demeans” and “degrades” public officials, LeRoy writes. He means not only the officials who participate, but also those who are cut out of the process—such as the school board members who get “no say in property tax abatements that will corrode their budget” or the revenue director whose “sober advice is upstaged by the frothy projections of an economist rented by the Chamber of Commerce.” The rules are designed to bestow the biggest rewards on the companies least likely to show any true attachment to workers or communities. New businesses are subsidized at the expense of existing ones. Big-box retailers gain while independent merchants lose. Commercial and social life is pulled away from Main Streets and downtowns toward malls and strips. Local and state leaders have been known to grovel before telemarketing firms, gambling casinos, and the operators of private prisons.

LeRoy is an activist. His organization, Good Jobs First, has worked with unions, environmentalists, and citizen watchdog groups to resist the giveaways. But realism often compels them to aim for modest goals, such as job-quality guarantees with “clawback” provisions calling for the recovery of taxpayer funds if a company fails to deliver. LeRoy foresees a long campaign of organizing and consciousness-raising before it is even worth talking about more sweeping reforms.

That is about how Uchitelle sizes things up, too, and it is a conclusion shared by John C. Bogle, author of The Battle for the Soul of Capitalism. Bogle has been an investor and innovator in financial management for close to fifty years. He was railing against the chicanery and high fees of the mutual fund industry before Eliot Spitzer had been to law school. Vanguard Management, which Bogle founded in 1972, became the biggest company in the field by keeping commissions low and transactions infrequent—and advertising it. Bogle went on to invent the index fund; while innumerable others claimed the ability to beat the market, he merely offered to approximate the market year after year. That proved to be a better deal for most clients, as he had theorized.

After a heart transplant ten years ago, Bogle retired to a life of full-time hell-raising. The Battle for the Soul of Capitalism is his response to the recent corporate scandals—Enron, MCI WorldCom, and Tyco among them. Not being a prosecutor, though, Bogle fails to see much difference between the acts that sent Jeffrey Skilling, Bernard Ebbers, and Dennis Kozlowski to prison and a host of more common and accepted forms of executive self-enrichment—for example by playing around with employee pension funds in order to inflate company profits and bonuses. At Verizon, Bogle notes, bonuses for the year 2001 were based on profits of $389 million, which rested, in turn, on a supposed $1.8 billion in pension-fund gains. By the time the company reported those numbers, however, the stock market bubble had burst, making it clear that Verizon’s pension funds had actually lost money that year; as it turned out, they had lost a staggering $3.1 billion, obliterating all the claimed profit and then some. Verizon, moreover, was only one of 1,570 companies—“an enormous part of the giant barrel of corporate capitalism”—required to restate corporate earnings for one or more of the years 2000–2004; and “I have not heard of a single instance,” Bogle adds, “in which…bonuses have been recalculated and the overpayments returned to the stockholders.”

Since the publication of Bogle’s book, executives and directors of more than 250 companies have come under suspicion of profiting from fraudulently timed stock option grants. The whistle was blown by Erik Lie, a professor of finance at the University of Iowa. Through statistical analysis, he established a pattern that could not be explained by chance, thus giving new meaning to the term “probable cause.” His 2005 paper “On the Timing of CEO Stock Option Awards,” prompted investigations by The Wall Street Journal and eventually the Justice Department and the Securities and Exchange Commission; their objective, however, was to prove what Bogle might consider a minor point, for, in his mind, stock options were a scam to begin with. In the overheated market of the late 1990s, he shows, options—backdated or not—brought windfall gains to virtually all executives, including some who were leading their companies to ruin while concealing the evidence from (among others) the eventual purchasers of their stock.

Viewing these evils through a shareholder-rights lens, Bogle attributes them to a triumph of “managers’ capitalism” over “owners’ capitalism.” But while he offers plenty of evidence to justify his low opinion of “our imperial chief executives” with “their jet planes…their pension plans, their club dues, their Park Avenue apartments,” his argument ranges well beyond the territory suggested by the manager/ owner framework. In almost all their recent misdeeds, he demonstrates, self-serving executives have been abetted by self-serving directors, securities analysts, auditors, lenders, investment bankers, and others. And while shareholders have suffered in case after case, many could be said to have brought their losses on themselves by being just as fixated on market trends—and just as oblivious to business realities—as anyone else in the equation. To Bogle’s dismay, few of today’s shareholders have much appetite for the rights he asserts on their behalf (over the election and removal of corporate directors, for example); most seem content with the only right that today’s executives would willingly grant them—the so-called “right of exit,” which gets exercised nowadays with promiscuous frequency, in Bogle’s judgment. Twenty years ago, the annual rate of share turnover was about 25 percent; by 2004, he says, it was 150 percent. That kind of manic buying and selling, Bogle convincingly argues, generates wildly irrational levels of market volatility and endless opportunities for insiders to play the market for short-term gain.

Institutional investors now control approximately two thirds of all publicly traded stock in the US. Bogle has for years been trying to mobilize these giants into a new community of owners, capable of restraining corporate avarice and opportunism. Except for a few unions and public pension funds, he has found few takers. Not a single “mutual fund firm, pension manager, bank, or insurance company,” he writes, “has ever sponsored a proxy resolution that was opposed by the board of directors.”

“Managers’ capitalism,” then, is Bogle’s shorthand for a system of rules, practices, and standards of behavior designed to bring quick and sure rewards to a few at long-term cost to many. Executives are not the only suspects here, and shareholders are not the only victims.^* Often, Bogle observes, workers and shareholders get defrauded together. That is obviously true when managers cook the books; it can also be true when they cook up dramatic “restructuring” plans entailing mass layoffs. As Uchitelle points out, these plans often generate smaller-than-anticipated savings and bigger-than-anticipated costs—in morale and trust, especially. The point of many recent layoffs has been to free up capital for the repayment of debt incurred in mergers and acquisitions; those deals have a notably bad track record of their own. To understand why so many mergers continue to occur—$3.79 trillion worth in 2006—Bogle suggests that we consider the consequences for the executives who arrange them: not just the bonuses and the increased pay and power, but the ability to “take huge writeoffs—largely ignored by market participants—and create ‘cookie jar’ reserves”—paper assets created through mergers—“available at the beck and call of management to inflate future earnings on demand.”

From their different vantage points, Uchitelle, LeRoy, and Bogle are writing about the breakdown of what some have called the postwar social contract, and about the rise of a new “money power” more daunting, in some ways, than that of the late 1800s and early 1900s. To gain their political ends, the robber barons and monopolists of the Gilded Age were content with corrupting officials and buying elections. Their modern counterparts have taken things a big step further, erecting a loose network of think tanks, corporate spokespeople, and friendly press commentators to shape the way Americans think about the economy. Much as corporate marketing directs our aspirations disproportionately toward commercial goods and services, the new communications apparatus wants us to believe that our economic wellbeing depends almost entirely on the so-called free market—a euphemism for letting the private sector set its own rules. The success of this great effort can be measured in the remarkable fact that, despite the corporate scandals and the social damage that these authors explore; despite three decades of deregulation and privatization and tax-and-benefit-slashing with, as the clearest single result, the relentless rise of economic inequality to levels so extreme that since 2001 “the economy” has racked up five straight years of impressive growth without producing any measurable income gains for most Americans—even now, discussions of solutions or alternatives can be stopped almost dead in their tracks by mention of the word government.

The rules, procedures, and understandings of the postwar social contract were designed for a world in which practical forces kept businesses anchored in geographical place, reinforcing the sense of obligation that many corporate leaders felt toward workers and communities. That being said, those arrangements were spectacularly successful in creating a broad, accessible, and secure middle class, and in bringing unprecedented transparency and fairness to the hazardous relations between individuals (whether customers, workers, neighbors, or shareholders) and corporations.

In addition to being good for the society at large, the postwar social contract turned out to be very good for American business. (No matter what they may say about the role of government, today’s corporate chieftains and financiers—the scalawags and the rest—owe their fortunes in no small part to the legacy of trust in the financial markets created by the securities regulations of the New Deal era and onward.) Economically and in other ways, then, the future will depend on our ability to find more durable means toward the same ends; and while none of these books lays out a blueprint, taken together, they suggest a few operating principles.

The economic policy of the United States has in recent memory been directed almost entirely toward the goal of growth, and treated, accordingly, as the preserve of experts and corporate and financial insiders. Policy initiated outside this preserve has been limited, for the most part, to a set of narrowly defined issues (such as health care, retirement security, pollution, etc.) considered fit for democratic deliberation. This compartmentalized approach, we now know, is guaranteed to be an exercise in damage control, requiring obsessive vigilance and leaving a trail of frustration. Instead of trying to prod or seduce companies into doing what they cannot justify from a profit standpoint, we should be trying to bring everyday corporate thinking into rough alignment with the goals of society as a whole.

That will mean, as Bogle says, finding efficient ways to check the speculative excesses of today’s financial markets and cut down on the tremendous amount of energy and human as well as economic resources that go into the pursuit of what he calls “aggressive financial targets” at the expense of “character, integrity, enthusiasm, conviction, and passion.” It will also mean (in exchange for the privileges and rewards of incorporation and access to regulated financial markets) coming up with mechanisms to recognize the stakeholder status of longtime employees and local communities, and—as we are just beginning to do on environmental issues—bringing some of the intangible concerns of work life and community and social wealth onto the corporate balance sheet.

Devising workable policies in service of these aims; forging new approaches into a coherent and convincing program; looking for strategic ways to loosen the hold that the free-market mythology still has on us—that is the great challenge of this fluid moment in our national story. It is a project filled with difficulties, and, as yet, not so obvious potential. The injuries examined by these books are felt, to one degree or another, by most Americans. A countermovement might eventually be as broad as the harm, reaching across some of the lines that have defined American politics, unconstructively, since the 1970s; such a movement could, in time, draw support from inside as well as outside the business world, since, as Bogle so plainly shows, many corporate decisions reflexively attributed by supporters and critics alike to a “bottom-line mentality” in fact serve what he calls “the wrong bottom line”—one that not only shortchanges investors but tramples on many of the impulses that people naturally bring to the work of creating and building businesses.

Most Americans are troubled by the culture of dealmaking and financial engineering and insider self-enrichment that Bogle deplores; by the callous treatment of workers and work life that Uchitelle describes; by the erosion of communities and community institutions that LeRoy examines. Not very far below the political surface, most of us feel some version of the same vexed ambivalence toward corporate America—dazzled by the conveniences and comforts it delivers, yet resentful of the tradeoffs that it continually demands; few Americans would be anything but grateful if our corporations and financial institutions could develop some respect for our non-material and non-individualistic selves. It is hard to imagine such a fundamental transformation of these giant institutions. It is even harder to imagine a better world in which they remain essentially what they are.