My review of "Gangster Capitalism"

A very timely book! Review originally written on November 16, 2008

What makes "Gangster Capitalism" so worthwhile is that it helps in understanding what has led us to the 2007-8 financial meltdown. As the book shows, like during the 1920's, deregulation led the way for powerful companies to allow the very wealthy to get wealthier at the expense of average people by using poor working conditions, low wages, etc, plus at the same time supporting supposedly moral movements (against gambling, alcohol, drugs, etc) which mainly served the purpose of making these trades more profitable to crooks and therefore created rampant gangsterism there. The result was such a society wracked with gangsterism at all levels, but because most people felt they were prospering, few complained. But, then it all collapsed with the 1929 crash and resulting Depression, which led the way for FDR and the New Deal programs which increased regulation of corporations, repeal of Prohibition, etc. Though the Depression lingered until WWII, the New Deal was successful in restructuring our laws and public infrastructure to create a better footing for the prosperity which would follow. The book effectively traces how much of this regulation was reduced piece by piece, beginning in earnest with Nixon, using Cold War fears to tilt the nation toward more corporate power and away from reform, support of right-wing dictators around the world, re-energizing a 'moral crusade' especially by beginning the War on Drugs, thereby making the illegal drug trade super profitable, etc. The nation had shifted Right and even Democratic presidents like Carter who was instrumental in deregulating industry and Clinton who signed into law the repeal of Glass--Steagle weren't able to stop the shift. Then, the 'Gangster Capitalism" went on steroids with G. W. Bush. By 2003, corporate taxes only amounted to 7% of revenues, while payroll taxes amounted to 40%.

Of note, the book makes clear it is opportunity which leads to much crime, so the approach of massive deregulation of corporations, plus focusing on arrests and imprisonment for victimless crimes ends up with the wrong results, more entrenched crime, even allowing corporations to capitalize on a prison industry. The book is also good at highlighting how corporations and outright gangsters were able to corrupt legal drugs (price-fixing), tobacco, asbestos, body parts, autos (Pintos), etc. Some other things in the book, of note: Hamid Karzai included drug traffickers in his Afghan administration. And, our support of Suharto (Indonesia), Mobuto (the Congo), and Marcos (the Philippines) allowed 'looting' of these countries. A corrupt financial infrastructure included the BCCI bank and offshore banking to evade taxes also developed. Plus, laundering money from illegal arms sales, drugs, and so many other illegal activities passed through our financial system.

The book is definitely tilted toward a liberal way of looking at things, therefore it doesn't go into the good things about capitalism, but there are disturbing patterns which are important to understand, and this book does that very well.