947262

book-review2020
OSS0010.1177/0170840620947262Organization StudiesBook Review

Book Review

Organization Studies

Book Review
1­–4
© The Author(s) 2020
Article reuse guidelines:
sagepub.com/journals-permissions
DOI: 10.1177/0170840620947262
https://doi.org/10.1177/0170840620947262
www.egosnet.org/os

Paul Adler
The 99 Percent Economy: How Democratic Socialism Can Overcome the Crises of
Capitalism
New York: Oxford University Press, 2019, 232 pages.

Reviewed by: Paul Goldman, Corvo Partners, Portland, OR, USA

Paul Adler has written a provocative book that is especially timely as economies and societies face
possibilities for transformative changes in the wake of the Covid-19 pandemic. In 156 incisive yet
hopeful pages of tightly argued text the book highlights the crises and contradictions of financial-
ized capitalism and points the way to a democratized and efficient economy. Adler provides a
unique perspective. He is both a prolific organizational scholar and a democratic socialist steeped
in Marxist inquiry. These characteristics create a rare synergy in a presentation that is detailed,
nuanced, and argued with passionate enthusiasm. The book begins with description of one percent
capitalism as it has evolved during and after the 1980s, continues with an examination of alterna-
tive organizing possibilities, and then describes what a democratic socialist society might look like
and how that might be achieved.

Capitalism’s Six Crises

His analysis of the capitalist system is grounded in Marxist political economy and draws heavily
on recent writings by economists, sociologists, and journalists who study capitalism’s evolution
and its effects on individuals and communities (Case & Deakin, 2020; Hochschild, 2016; Piketty,
2014). Adler argues that capitalism has spawned six crises: (1) economic irrationality that produces
profound inequality and creates financial uncertainty for many, perhaps a majority, of the 99%; (2)
workplace disempowerment neither giving voice to employees nor acknowledging their intellec-
tual and creative contributions; (3) unresponsive and, in many countries, authoritarian government
at local and national levels; (4) environmental unsustainability; (5) social disintegration while
unmet material and emotional needs engender anxiety, disillusionment, and anger; and (6) interna-
tional conflict. Capitalism’s drivers are hardwired into its structure. The endemic and inevitable
drive for profit, growth, and maximization of corporate valuation overwhelms citizens’ needs and
desires for better quality of life. According to Adler the dynamics of the capitalist system are the
“root cause” of these overlapping crises, precisely because each of them influences, and is influ-
enced by, the other five in a spider web of redundant, mutually reinforcing connections.
Using largely American examples, this section explains how patent and copyright regulations
privilege corporations, how the oil and other extractive industries gain tax preferences, and how, at
great expense, corporate and financial institutions fund lobbying efforts to fight for deregulation of
2 Organization Studies 00(0)

the banking and securities sectors. He notes that the state has been reluctant to produce legislation
and create policy that supports the rights of workers, the poor, and people of color. Moreover, while
the response to gender equity issues has established new opportunities for women, sexual harass-
ment is a persistent problem as is discrimination in promotion and compensation. Equally impor-
tant, quality affordable child-care has not grown at a rate that recognizes women’s labor force
participation. And because capitalism’s dynamics creates entropic forces towards greater and
greater centralization of influence and power and corresponding increases in inequality, these
issues have not been fully addressed, at least in the United States.
And, as Marxists have argued since the mid-19th century, capitalism galvanizes contradictions
that at times threaten its hegemony. Especially during or just after wars and at other times of eco-
nomic uncertainty, the dispossessed, especially those in workers’ unions, have united to fight for
reforms. And escalating inequality and the decline of family wage jobs due to automation and
outsourcing of manufacturing, computer services, call centers, and other sectors has disrupted mil-
lions of lives and destabilized politics. This results in both intangible, quality-of-life costs to indi-
viduals, and also tangible costs—poor pay, little job security and, in the US, shorter life expectancy,
and minimal or no medical insurance.
Adler’s argument is particularly strong in his definition and discussion of socialization, that is,
in his words “the extent to which producers . . . absorb and leverage the capabilities of other pro-
ducers and of other parts of the broader society, benefitting from their know-how and their tech-
nologies” (p. 50). Firms have increasingly become clusters of interdependencies and networks of
short- and long-term relationships with their national or global suppliers and customers, whether
these are other companies or retail chains large and small. Their very size gives them immense,
often monopoly, power. Moreover, in the US and elsewhere, tax-generated government funding of
research, education, and infrastructure collectivizes costs that firms might otherwise have to pay.
Most critically, the levers of socialization are in private hands and serve private interests.
Socialization in its current form underpins technological innovation and productivity growth,
while it deprives much of the 99% of benefits resulting from what is ostensibly remarkable pro-
gress. In contrast, rentiers accumulate a greater share of societal wealth and income and top manag-
ers command salaries that vault them into the one percent. The system has an inertia, efficient for
shareholders and executives but not for the rest of society.

Organizations: The Promise and Limits of Reform

Can this change? Adler discusses structural changes at the enterprise level and suggests new pos-
sibilities for those re-imagining how individual organizations operate. His own research and prac-
tice in a variety of organizations gives credibility and weight to these observations.
He believes that the crises of capitalism cannot be resolved unless property is socialized so that
enterprise decisions reflect the priorities of the broader society, including employees, communities,
and the physical environment. To be clear, his vision of socializing property is not synonymous
with nationalizing property as the term is commonly understood. Rather, stakeholders—including
managers, line employees, local communities, customers/clients—acquire a formalized voice in
setting organizational goals and strategies. He asserts that decision-making must be democratic
and that actors must have meaningful ways to be involved on a regular and systematic basis.
Adler lauds “ethical capitalism” and the “high road firms” that incorporate and build democratic
values into organizational structure and process. Such firms-Kaiser Health, Patagonia outdoor
wear, NUMMI, a collaboration between Toyota and General Mothers, and CMMI, a software
development firm rely on democratization, participation, and on de-emphasizing hierarchy. These
companies develop and sustain widespread collaboration to strategize, innovate, learn, and work.
Book Review 3

Goals, working routines, and standards are negotiated and mutually reinforced. Another set of
examples includes large and small cooperatives that represent a significant economic and employ-
ment niche and include neighborhood groceries; Sunkist which distributes fruit juices on a national
scale, credit unions; local medical clinics; and municipally owned utilities. These companies in
entirely different industry sectors are successful and visionary, but by no means utopian.
While these organizations may be exceptions, they nonetheless demonstrate possibilities that
are not often considered in the management literature. They are often as efficient or even more
efficient than their industry competitors because their “profits” are returned to the organization to
fund training, innovation, and growth. However, they are not without contradictions and chal-
lenges, especially because once they achieve scale they must confront challenges of balancing the
competing efficiencies of hierarchy and widespread participation. They also struggle to maintain
not only employee motivation, but also their willingness to participate in the decision-making
process. Group decision-making is not just a matter of voice and voting. Similarly, they need to
foster strategies and mechanisms that incorporate and integrate those individuals with technical
skills and/or specialized expertise into a non-hierarchical and egalitarian workplace.
Do these pioneering organizations represent actual guideposts for overhauling an entire econ-
omy in the context of an unfriendly economic culture? Transitioning to a work- and community-
oriented ethos that values open-minded discussion where voices from below are respected and
heard as clearly as those of formal leaders and experts is a political as well as an organizational
challenge. Progress might be fitful, especially because smaller high road firms and co-ops are not
protected from such externalities as economic ebbs and flows, a financial crisis as experienced in
2008, and the trade wars that characterized the years from 2017 to 2020. By contrast, Kaiser and
NUMMI are enormous and have the corporate and financial slack to lower the dangers of taking
the high road.

Politics: A Democratic Socialist Society?

Over the past quarter century, Adler’s work has illustrated the potential for collaboration and the
possibility that enterprises that build consensus around goals and strategies can be successful in a
competitive world. The externalities, however, are powerful restraining forces that resist progres-
sive change. However, there are (at least) three potential scenarios that might jolt citizens and
governments to embrace systematic change. The first possibility is an economic or financial melt-
down even more serious than that of 2008. Second, an environmental catastrophe, for example
storms or tsunamis clearly linked to climate change, that put populated coastal cities under water.
A third possibility might include a revival of progressive political action on a broad scale
whereby a growing body of activists and presently apolitical citizens build electoral support for
socialist solutions, effecting change “in our workplaces . . . in our communities . . . in our schools”
(p. 153). The responses to the Black Lives Matter movement in the US suggests there may be more
likelihood of this than conventional wisdom would have led us to expect. At present we confront a
fourth scenario that Adler could not have anticipated or even imagined: a world-wide pandemic
that has destabilized economy, society, and politics and resulted in rethinking the status quo.
Adler is not naive about the barriers to an economy for the 99%. In the US, concentration has
given financial elites enormous leverage that enables them to resist challenges to their corporate
power. As increasingly skeptical Americans have noticed, the three branches of government have
been in a stalemate for most of the past three decades. As the capitalist ideology became increas-
ingly hegemonic, opportunities for egalitarian democracy seemed to have almost completely
eroded. And the degradation of work and the long-term rise in living standards may have eaten
away at the collective motivation and appetite for risk within the population. The rise of populist
4 Organization Studies 00(0)

movements in the past decade may indicate that this complacency is no longer the norm. In the US
racial, social, and economic inequities have become starkly evident as the pandemic and the Black
Lives Matter movement highlighted society’s contradictions and inequities. But American society
is bitterly divided, with a “left populism” driven for the moment by the demand for racial and eco-
nomic justice and a “right populism” combining anti-immigrant fervor and resentment towards
individuals and institutions perceived as indifferent to and contemptuous of those who have not
fared well in the 21st-century economy. The cultural gap feeds into the political divide and vice
versa.
The 99 Percent Economy explores the foundation of our current reality and offers a glimpse of
how it could be made different. The book is extraordinarily relevant in the present moment when
economy and society have become so profoundly destabilized. But it is far too soon to know
whether Adler’s analysis and prescriptions will be viewed as prescient about the consequences of
potential shocks to the capitalist imperatives which until now have reigned supreme. Will we have
an alternative reality, democratic and no longer strictly capitalistic? Locked as we are in the pre-
sent, we unconsciously share assumptions about how society works and these make it difficult to
imagine a truly alternative future. But, as the writer Ursula LeGuin (2014) pointed out, “We live in
capitalism. Its power seems inescapable. So did the divine right of kings.” If we reach the inflexion
point, Adler’s book will provide a template for a viable and humane alternative future.

References
Case, Ann, & Deaton, Angus (2020). Deaths of despair and the future of capitalism. Princeton, NJ: Princeton
University Press.
Hochschild, Arlie (2016). Strangers in their own land: Anger and mourning on the American right. New
York: The New Press.
LeGuin, Ursula (2014). We will need writers who remember freedom. Speech at the National Book Awards,
November 19.
Piketty, Thomas (2014). Capital in the 21st century. Translated by Arthur Goldhamer. Cambridge, MA:
Harvard University Press.