The System

Robert B. Reich, a professor of public policy at the University of California, Berkeley, and former U.S. secretary of labor under President Bill Clinton, argues that the fundamental divide in American politics is no longer between left and right but between democracy and oligarchy. He builds his case around Jamie Dimon, CEO of JPMorgan Chase and chair of the Business Roundtable (a lobbying group of America's most powerful CEOs), whom Reich treats as emblematic of a system in which a small number of extraordinarily wealthy individuals have accumulated enough power to reshape the rules of the economy in their favor. Reich recounts a 2018 phone call in which Dimon objected to Reich's public criticism, using this exchange to frame the book's central question: How have people like Dimon, who publicly profess concern for ordinary Americans, contributed to a system that leaves most of them behind?

Reich defines oligarchy, from the Greek oligarkhes meaning "few to rule or command" (13), as government by a small number of exceedingly rich people who control major institutions for their own benefit. He identifies three American oligarchies: the slaveholding founders, the Gilded Age robber barons, and a third that emerged around 1980. Between 1980 and 2019, the richest 1 percent's share of household income more than doubled, CEO pay rose 940 percent while typical worker pay rose 12 percent, and the richest 0.1 percent came to own almost as much wealth as the bottom 90 percent combined. Political power shifted in tandem: In the 2016 election cycle, the richest 0.01 percent accounted for 40 percent of all campaign contributions. Reich urges readers to abandon conventional frameworks and think instead in terms of power: who possesses it, how it is wielded, and for whose benefit. He insists that race and class must not be analyzed separately, as the two are aggravating each other.

Reich traces Dimon's rise from a privileged New York upbringing through mentorship under financial magnate Sandy Weill to the helm of JPMorgan Chase, which by 2018 earned $30.7 billion in net income. Dimon publicly laments stagnant wages, failing schools, and racial discrimination, and has initiated programs investing in underserved cities. Yet Reich argues these efforts are dwarfed by JPMorgan's profits and offset by Dimon's lobbying for the Trump corporate tax cut, which increased the federal debt by $1.9 trillion while delivering almost nothing to the working class. He catalogs contradictions: The bank paid $13 billion to settle fraud claims from the 2008 financial crisis, invested nearly $196 billion in fossil fuels between 2016 and 2018, settled discrimination claims against minority mortgage borrowers, and paid its tellers so little that a congressional exchange with Representative Katie Porter exposed a $567 monthly shortfall for a teller in Irvine, California. Reich broadens this critique to the Business Roundtable's 2019 stakeholder pledge, which he views as designed to preempt binding legislation rather than produce genuine change.

Reich argues that America already practices "socialism for the rich" through bailouts and subsidies. JPMorgan received $25 billion in federal bailout funds during the 2008 crisis, while 8.7 million Americans lost jobs and 10 million lost homes. The five biggest banks grew from holding 12 percent of deposits in the early 1990s to 46 percent by 2019, benefiting from an estimated $83 billion annual hidden subsidy due to their too-big-to-fail status. Meanwhile, Dimon and the big banks defeated a proposal to let bankruptcy judges restructure home mortgages for distressed homeowners. Eleven years after the crisis, no major financial executive had been convicted.

Turning to the political system, Reich cites a 2014 study by Martin Gilens of Princeton and Benjamin Page of Northwestern, which concluded that average Americans have near-zero impact on public policy. Corporate donations function as investments with extraordinary returns, and a revolving door between Wall Street and Washington ensures industry-friendly policymaking. Reich traces the Supreme Court's increasingly permissive view of money in politics, culminating in the 2010 Citizens United v. Federal Election Commission decision, which held that corporate independent expenditures do not constitute corruption. He argues that CEOs, led by Dimon, remained complicit with Trump's assault on democratic norms after the 2017 Charlottesville incident, staying silent as Trump attacked the press and berated Black athletes while tax cuts and deregulation sent corporate profits soaring.

In the book's central analytical section, Reich traces a "vicious cycle" through three systemic changes that shifted power upward. Markets, he contends, are not natural phenomena but sets of human-made rules shaped by those with political power; concentrated wealth buys rule changes that further concentrate wealth. The first change was the move from stakeholder to shareholder capitalism, driven by corporate raiders like billionaire investor Carl Icahn in the 1980s. Before the raiders, CEOs earned modestly, were rooted in communities, and felt responsible to employees, customers, and the public. Hostile takeovers forced them to maximize short-term share prices or face replacement. Reich profiles Jack Welch at General Electric as the exemplar: GE's stock value soared from $13 billion to $500 billion while Welch laid off 100,000 workers. The Reagan administration enabled the raiders, and academics like Harvard's Michael Jensen provided intellectual justification for shareholder primacy.

The second change was the collapse of union power amid weakened antitrust enforcement (government policies to prevent monopolies). Two-thirds of American industries became more concentrated, while union membership dropped from 35 percent of private-sector workers in the mid-1950s to 6.4 percent. Corporations replaced striking workers, threatened to move jobs overseas, and relocated to right-to-work states, which bar unions from requiring dues. The result: A larger share of national income went to profits and a smaller share to wages than at any time since World War II.

The third change was the deregulation of Wall Street. As wages stagnated, Americans coped by sending more family members into the workforce, working longer hours, and borrowing heavily against rising home values. Sandy Weill, with Dimon's assistance, orchestrated bank mergers and lobbied to repeal Glass-Steagall, the Depression-era law separating commercial banking from investment banking. With $300 million in industry lobbying, Glass-Steagall was repealed in 1999. When the housing bubble burst in 2008, the last coping mechanism collapsed. Between 1999 and 2018, the economy grew 48 percent, but typical household income did not grow at all.

Reich documents the popular fury this stagnation produced. Traveling through swing states in fall 2015, he found working- and middle-class Americans angry at employers, government, and Wall Street. None mentioned establishment candidates; they spoke of Bernie Sanders and Donald Trump. Reich argues that racism was a proximate but not underlying cause of Trump's 2016 victory: The root cause was unchecked corporate power that squeezed all people of modest means. He faults Democrats for complicity, noting they pushed free-trade agreements without worker protections, allowed antitrust enforcement to stagnate, and relied on corporate campaign funding.

Reich identifies three strategies by which oligarchies retain power: belief systems like "market fundamentalism" that cast market outcomes as natural and just, masking how the powerful shaped the rules; bribes to a professional class of lawyers, consultants, and lobbyists whose livelihoods depend on the system; and manufactured divisions along racial, cultural, and identity lines that prevent the majority from uniting. Despite these obstacles, Reich points to a pattern of democratic renewal in American history, from the progressive era to the civil rights movement, and envisions a multiracial coalition of working-class Americans, disillusioned professionals, and small businesses united by commitment to democratic citizenship. Quoting Justice Louis D. Brandeis, he warns: "We can have democracy in this country or we can have great wealth concentrated in the hands of a few, but we can't have both" (186).

In a closing chapter addressed directly to Dimon, Reich urges the oligarchy to support systemic reforms: worker representation on corporate boards, mandatory union recognition, higher corporate taxes, revived antitrust enforcement, and limits on money in politics. He expresses doubt that Dimon will act and warns that if the oligarchy stands in the way, it will be complicit in whatever dysfunction follows.