The Illusion That Democracy Threatens the Economy

This chapter challenges the conventional view that there is a deep tension between democracy and a profit-oriented economy. It argues, on the contrary, that democracy has been critical to the vitality of developed economies, because it provides the protection against the slide into oligarchy and economic stagnation.

The Illusion of Global Order Organized by Capitalism

This chapter shows that it is incorrect to imagine that the logic of capitalism dictates a particular organization of the global economy. That organization has been a function of great power politics and has changed significantly across different time periods.

The Illusion of an Unchanging System

This chapter challenges the idea that the essence of capitalism has not changed, despite transformations in what is produced and how it is produced. The contrast between the United States and Germany is used to show how market societies are politically constructed.

The Illusion That Greed Is Good

This chapter shows that theorists going back to Adam Smith have recognized that the pursuit of economic self-interest has to be moderated by social and legal restraints. The failure to recognize this in recent decades has produced an epidemic of corporate crime and threatens prosperity.

Beyond Illusions

This chapter elaborates the kind of reforms that would make sustainable economic growth possible both in the United States and in the world economy. It emphasizes the parallel between the crisis of the 1930s and the problems of the global economy since the 2008 crisis.

The Capitalist Illusion

This chapter lays out the thesis of the book—that an incorrect understanding of capitalism has become hegemonic in recent decades. It shows how the acceptability of the word itself changed radically over the last fifty years, and it identifies the role of conservative intellectuals and business writers in infusing the term with a specific set of meanings.

Afterword

This afterword develops a brief critique of the way analysts and activists on the left continue to use the concept of capitalism. My main argument is that the term “capitalism” was effectively stolen by the right wing in the 1970s and 1980s and infused with a meaning that emphasizes capitalism’s durability and its unchanging nature. So when those on the left use the term, they inadvertently reinforce the problematic claims of their political opponents. A similar episode of linguistic larceny happened earlier. Between 1890 and 1910, political thinkers in England and the United States effectively stole the term “liberalism” and redefined it from “economic liberalism” to “political liberalism.”...

Elaborating an Alternative

This chapter provides an overview of a more fruitful way in which readers should understand how capitalism or market economies operate. It stresses that market societies are constantly being reconstructed and that government and politics are always intertwined with economics. It proposes that the United States is now a habitation society but that we lack the institutional arrangements to support this new kind of economy.