Stakeholder capitalism and our economy through my physician's lens

Let me state this upfront: I do not particularly like it when non-physicians interfere with medical services. Proceeding from this, I am prepared to tolerate, as much as possible, economists, business people, industrialists, and, of course, politicians turning up their noses at what I am about to say. I say this, but I cannot help but underline it. In the normal flow of life, we only need proper medical services from time to time, but there is not a single day that we are not affected by economic conditions. This reinforces my plea for tolerance. 

Robert Reich is a jurist who also served as Secretary of Labor during the Clinton administration in the US. He spent many years as a professor of public policy at UC Berkeley. This year, he published an autobiography, Coming Up Short: A Memoir of My America. The word short in the title is, in a way, self-deprecation. Due to a congenital condition, the author remained very short in stature. 

I read his book in one sitting, saddened that it had to end. The author clearly states that he is a capitalist. However, he immediately underlines it and focuses on the differences between shareholder capitalism and stakeholder capitalism. As I understand it, shareholder capitalism is essentially the capitalism we know, the one we see in movies and cartoons—the one with sesame seeds, if you will. According to this view, the sole purpose of any capital organization that has set out to make money is, naturally, to satisfy its shareholders by increasing its profits while remaining within the laws and general moral rules. In other words, shareholder capitalism primarily protects its shareholders. Stakeholder capitalism, on the other hand, sees itself as responsible not only to its shareholders but also to the environment and even society as a whole, starting with the employees of that capital organization and their families. Going even further, it argues that the continuous profitability of an organization is directly proportional to the interests of the society in which its employees live. Here, too, laissez-faire applies. However, the method and manner of this "letting be" are different. I learn that one of the important methods of the stakeholder protection I mentioned is distributing stock to employees. The author mentions that his grandfather, a worker, had savings of nearly one million dollars in the currency of the time when he retired. 

A phenomenon frequently mentioned in the book is the reasons for the very rapid development of the US after World War II. During these years, the living standards of American society rose very significantly, and segments of society that had remained poor until then rapidly transformed into a prosperous middle class. When the scientific discoveries and technological creativity of those years are added, it was almost a golden age.

The author attributes this golden age to two main reasons:                      

1. An income tax reaching up to 70% was levied on the wealthiest in society; 

2. Young people whose education was interrupted during the war were provided with higher education at very good universities with state support (the famous GI Bill regulation). Let me point out immediately: The 70% tax bracket I mentioned belongs to 1981, when Reagan was elected president. In fact, there were even values above 90% in the 1960s. 

Things began to change with the Reagan era. For a few decades, the state administration, which had succeeded in closing the income gap in society with great success, suddenly changed course and turned toward making the rich even richer, especially by reducing their taxes. Reagan revealed this plan in his very first speech as president. After emphasizing that he had taken over a country with many economic problems, he immediately underlined: "Do not look to the government for the solution to the problem, because the government is the cause of the problem!" This is how the years that some call Reaganism-Thatcherism, also including the British Prime Minister of the time, Thatcher, began. This duo is essentially remembered as the most loyal practitioners of the neoliberalism movement, whose theoretical characteristics were defined in the middle of the century by economists like M. Friedman. 

If you will allow me, I will depart from Reich's book here and state my own thoughts. I consider the term neoliberalism an insult to the liberal thought that sees the individual and their reason, which are at the foundation of contemporary civilization, as the highest value. Let me add immediately that I do not like the term "liboş" (a derogatory Turkish slang for liberals) at all. I mean, should we call the famous philosopher J.S. Mill a "liboş" too? What I am saying is that I am strongly opposed to thinking of neoliberalism, which I equate with social banditry, as a new form of liberalism, based on its etymology. 

I learned one more thing about Reich, beyond what he discusses in his book. He was the Secretary of Labor in 1994. The economic order that began with Reagan was still continuing in his country. The professor is not at all happy about this and summarizes it as follows: "I fear that if things go on like this, in 30 years, the middle class in the US will disappear and society will be divided into two: the very rich and the poor." What an accurate prediction, isn't it? 

I also read very interesting things in the book about the background of US President Trump. It turns out that Roy Cohn, a New Yorker who was the right-hand man and lawyer for the famous ugly and ridiculous communist-hunting Senator McCarthy of the 1950s US, later advised the Trump family company and became a mentor to the young Trump. 

As far as I have seen and experienced over the years, I can easily say that the system called stakeholder capitalism has never visited my country. Now, without bothering TÜSİAD at all, let me ask our opposition parties: What are their thoughts on stakeholder capitalism in the broadest terms? Or rather, to what extent do they see this path as a way to resolve the current economic impasse? That is, regardless of what it is called, a capitalism with at least functioning anti-trust laws, labor unions, and respect for the environment, where the rich pay high taxes and the poor pay low taxes? If you prefer, if it sounds more pleasant to your ears, you can call it the "Anatolian model of capitalism" instead of "Anatolian tigers." 

I also have a question for those who govern the country. Lately, our conversation with Mr. Trump has progressed significantly. I can understand, even with my physician's mind, that economic impulses play a role in this conversation. In the same context, my question is this: Does İnönü's famous saying, "Entering into relations with great powers is like sleeping in the same bed as a bear," ever cross your mind? Finally, I cannot help but ask myself how the late İnönü would have completed his sentence if he had lived to see Trump.