Democracy At Risk: Rescuing Main Street From Wall Street [Paperback]

Jeff Gates (Author)

Editorial Reviews

Amazon.com Review

"We've created a mean economy--a sumptuous heaven for some, an ungodly struggle for most, and a living hell for many," writes Jeff Gates in Democracy at Risk. The United States, he says, suffers from "affluenza." It is a democracy in name only: "Who would vote for a system in which just three Americans--Microsoft cofounders Bill Gates and Paul Allen plus Berkshire Hathaway's Warren Buffett--have a net worth larger than the combined GDP of the forty-one poorest nations and their 550 million people?" What's more, American capitalism has been a global disaster: "The United States should begin this new century of capitalism with a mea culpa. Our stature in the world community would be much enhanced if we simply concede what everyone already knows--that our pell-mell worldwide pursuit of profit has been accompanied by considerable human, political, and ecological damage."

And yet it would be wrong to call Democracy at Risk a standard left-wing appraisal. Gates considers himself a capitalist, and he calls for sharing the fruits of capitalism with all workers through stock ownership. Conservatives will regard Gates as a quasi Marxist with his calls for imposing "a capital commons user fee" on international trade, a foreign policy whose main concern is "the worldwide alleviation of poverty" rather than national security, and his near-obsession with concentrations of wealth. Democrarcy at Risk is, at its heart, a progressive book, but one not beholden to the Democratic Party. Gates's criticism of Social Security, for instance, would spring from the mouth of few politicians of any stripe. He lambastes it as "an income transfer funded with a job tax." At times, the book seems unfocused, with its 19-point plan in the first chapter. But nobody can doubt Gates's commitment to reducing the inequality of wealth or his passion for fighting plutocracy. The book includes endorsements from Noam Chomsky, William Greider, and Ralph Nader; for readers who admire these minds, Democracy at Risk will be a volume. --John J. Miller --This text refers to an out of print or unavailable edition of this title.

From Publishers Weekly

Gates is enthusiastic about both capitalism and democracyAbut he's a little concerned that one (capitalism) is advancing at the expense of the other, and that today's profit-or-perish economy endangers the viability of community. "My goal," he writes, "is to smarten up free enterprise." So, in this well-meaning populist primer, GatesAformer counsel to the U.S. Senate Committee on FinanceAmaps out a plan for a more "democratic capitalism" that would make the world safe from the ravages of global financial markets that benefit the few at the expense of the many. Among other things, he proposes a "freeloader's levy" that would take money from the $8 trillion now stashed in the world's tax havens and redistribute it to humanitarian projects in the developing world, and he imagines a scheme for reinvesting retirement assets to assist self-reliant pensioners. Most compellingly, he proposes a series of strategies (based in part on his 1998 book The Ownership Solution) for "peoplizing ownership"Aexpanding the edges of corporations through various customer, employee and citizen stock-ownership plans. Gates is at his best when analyzing specific tactics to back up his rhetorical salvos. But a number of his critiques lose their focus as he barrels pell-mell through an onslaught of subject matterAforeign relations, monetary policy, bioterrorism, Gandhi, perceived misdeeds of Wal-Mart, and cybernetics. Still, even if the answers Gates turns up don't always hit the mark, at least he's raising an important set of questions. (June)
Copyright 2000 Reed Business Information, Inc. --This text refers to an out of print or unavailable edition of this title.

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Product Details

• Paperback: 464 pages
• Publisher: Basic Books (April 20, 2001)
• Language: English
• ISBN-10: 0738204838
• ISBN-13: 978-0738204833
• Product Dimensions: 9.2 x 6 x 1 inches
• Shipping Weight: 1.6 pounds (View shipping rates and policies)
• Average Customer Review: 3.6 out of 5 stars  See all reviews (5 customer reviews)
• Amazon Best Sellers Rank: #1,672,177 in Books (See Top 100 in Books)

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14 of 16 people found the following review helpful:

3.0 out of 5 stars A vision for a populist form of capitalism, June 13, 2002

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Malvin (Frederick, MD USA) - See all my reviews
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This review is from: Democracy At Risk: Rescuing Main Street From Wall Street (Paperback)

In "Democracy at Risk", author Jeff Gates opines that democracy in the United States has actually become a plutocracy. Average citizens have little to no influence with legislators when compared with the access extremely wealthy capitalists have gained from years of dominating the financing of the major political parties. Declining voter turnout suggests that citizens are resigned to a condition of powerlessness, one of many symptoms of an unhealthy democracy.

Against this backdrop, Gates believes that the time is ripe for a new form of populist politics. He boldly sketches out a proposed populist political agenda that he believes could connect with today's disillusioned voters. Gates includes an interesting section where he describes the type of personality an ideal populist Presidential candidate might need to possess in order to attract voters and deal effectively with opposition parties.

As a veteran Beltway insider and architect of the legislation that created ESOPs (employee stock ownership plans) in the 1970s, Gates knows a lot about finance, ownership and public policy. He shows how current laws privilege finance at the expense of labor and the environment but argues that such laws can be changed if the people demand it. Therefore, Gates believes that an important task for a populist party will be to educate the public about the link between concentrated financial power and ownership with economic and environmental sustainability.

Gates writes with knowledge and passion, but at times the rush of ideas is so intense that the book tends to wander off course. For example, there are dozens of brilliant and imaginative ideas sprinkled throughout the text. But this is sometimes confusing for the reader, given that Gates organized the book into four distinct sections; shouldn't these important solutions have been grouped in one place to facilitate ease of reference?

But Gates does in fact reserve section four of the book for his cornerstone idea: "Share Our Wealth", a highly controversial program of wealth redistribution (from the rich to everyone else). Understanding that this proposal will raise more than a few eyebrows, Gates includes a Question and Answer section to address objections to his plan. But while the idea may have some merit, I think that the proposal would generate such intense opposition that it might overshadow and crush the otherwise adminrable populist agenda that the author has successfully envisioned. Indeed, "Share Our Wealth" is an idea of such magnitude that it more rightly deserves a separate book to flesh out the idea more fully and provide the support it needs to make the idea defensible.

Overall, this book in my view accurately diagnoses much of what is wrong with our democracy and proposes some useful populist-flavored solutions, but unfortunately does not convincingly make the case for the "Share Our Wealth" concept. Nevertheless, "Democracy at Risk" is recommended reading for those who may be pondering how a fully-functioning democracy might be restored in this country.

10 of 13 people found the following review helpful:

5.0 out of 5 stars Democracy as if People Matter, July 6, 2001

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Geoffrey Holland (Portland, Oregon, USA) - See all my reviews
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This review is from: Democracy At Risk: Rescuing Main Street From Wall Street (Paperback)

Jeff Gates is clearly a powerful thinker and a thoughtful human being. He writes with conviction and credibility. He knows what he's talking about. He was the consummate 'insider', having spent more than a decade on Capital Hill as counsel to the Senate Finance Committee. DEMOCRACY AT RISK provides stark evidence that 'we the people' are no longer citizens who are served by the 'common good'. Instead, we are 'consumers' being herded and manipulated to serve an all powerful 'marketplace' and the small number of people who have become obscenely wealthy as a result. For example, 70% of all earnings growth in the U.S. since the 1970's has gone to less than 1% of the people. Gates says that highly concentrated wealth patterns aren't forces of nature: they're political choices. We can choose something quite different and far more inclusive - provided we're offered that choice. Gates calls for a society built on a more natural, caring form of capitalism, with broad ownership patterns. Gates argues that this 'populist' agenda is neither liberal or conservative; Democratic or Republican. It's about restoring a democracy that is badly broken. It's about removing corruption from a political system awash in influence money. He does not suggest making things right will be easy; only that it is necessary. If you want to understand the powerful, largely hidden forces shaping our society; if you want a vision for something better; if you want to be part of the solution, read this book.

1 of 1 people found the following review helpful:

5.0 out of 5 stars Broadening the Ownership of Capital, March 20, 2008

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Drew Field (Carmel, CA USA) - See all my reviews
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This review is from: Democracy At Risk: Rescuing Main Street From Wall Street (Paperback)

Jeff Gates met Lou Kelso while Jeff was in law school, where he wrote articles about Lou's ideas for his law school newspaper. At Lou's suggestion, Jeff worked on Stuart Speiser's book, A Piece of the Action. Jeff then went on to be counsel for Russell Long's Senate Committee on Finance during the 1980s, where "I crafted much of the federal legislation encouraging employee stock ownership plans." He became special counsel to Kelso & Company and has since been a consultant to governments and other organizations on "ownership engineering." His books are The Ownership Solution: Toward a Shared Capitalism for the Twenty-First Century, Addison-Wesley, 1998 and Democracy at Risk: Rescuing Main Street from Wall Street, A Populist Vision for the Twenty-First Century, Perseus, 2000.

In The Ownership Solution, Jeff suggests "a steady broadening of ownership, in the knowledge that a vigorous effort in that direction will, in time, correct the current concentration." Beyond the economic effect, he sees shareownership "as a social tool for linking people not only to things (productive assets) but also to each other, to their community and (importantly) to their endangered environment."

Jeff presents a clear, compelling analysis of the current ownership of financial assets and the "closed system" of business finance. However, he does not believe that new shareowners will be created if shares must be purchased "from their already stretched paychecks." He argues that the "best way . . . is for government to intervene with a foresighted policy environment that induces capitalism to create a broader base of capitalists." Examples from his own consulting work are ESOPs and extensions to RESOPs (Related Enterprise, such as a company's vendor's employees); CSOPs (Customer) and GSOP (General, "in which ownership is based on geography or citizenship.")

Jeff uses his experience in federal government policy to suggest "twelve areas where the government's presence could be retooled to broaden ownership." They include favoring companies with ESOPs or "certifiably broad-based ownership" in making government purchases, licenses, access to public property, trade assistance, loans and loan guarantees, public pension plan investments and antitrust enforcement. He adds ten changes in taxation "to foster broad-based capital accumulation," as well as a "major education and communication campaign to better school citizens about finance, business and the various paths to ownership." Combined, all of these measures are to achieve "a `critical mass' of encouragement so that the current closed system of finance (which concentrates ownership) becomes less attractive than financial techniques that broaden ownership."

In Democracy at Risk, Jeff describes the current "people-disconnected capitalism" and argues for a "people-responsive economy." In chapters like "Killer Capitalism," he documents many of the negative effects on people and our environment from poverty, erosion in real income from work and the continuing concentration of capital ownership.

The chapter on "Education for Democratic Capitalism" proposes an education campaign for voters to learn about "today's economic disparities, . . the unmet obligations due our children, . . the antidemocratic nature of our current financial structure," and "the threat that economic centralization poses to the democratic tradition."

However, Jeff also says that "the idea of people accumulating significant capital through personal saving is a particularly vigorous exercise in futility." Our experience has shown that people will choose to buy shares with some of the earnings they have left after paying for necessities. Loan guarantees, tax benefits and other government programs could increase the amount of those purchases, but the political agenda today does not even include any studies about broadening the ownership of capital.

We see the work to be done as a marketing and education challenge. In direct offerings, a business presents itself to its own communities and helps individuals decide whether they want to become shareowners. No new government program is required. While the actions that Jeff suggests would seem to be helpful, they risk involving the law of unintended consequences that so often follows the political process. Direct offerings can be completed with no new attention from government.