The Raging 2020s

The Raging 2020s Plot Summary

Introduction

The social contract that once balanced the interests of corporations, governments, and citizens has fundamentally broken down. Over the past half-century, corporate power has expanded dramatically while government authority and labor influence have simultaneously declined. This imbalance has led to unprecedented wealth concentration, stagnant wages for workers, and diminished capacity for governments to address pressing social challenges. The consequences extend beyond economics into the realm of democratic governance itself, as concentrated economic power inevitably translates into political influence. This exploration examines how the delicate equilibrium between market forces and democratic institutions has been disrupted through systematic changes in tax policy, labor relations, corporate governance, and government capacity. By tracing the historical development of these imbalances and analyzing their interconnected nature, we gain insight into both the causes of our current dysfunction and potential pathways toward a more equitable system. The analysis moves beyond simplistic ideological positions to engage with practical questions about how power can be rebalanced in ways that preserve economic dynamism while ensuring broader prosperity and democratic accountability.

Chapter 1: The Broken Balance: How Corporate Power Overwhelmed Society

The social contract that once balanced the interests of businesses, governments, and citizens has fractured beyond recognition. For decades, corporations have prioritized shareholder value above all else, creating unprecedented wealth for investors while leaving workers, communities, and the environment behind. This shift began in the 1960s when economist Milton Friedman argued that a business's only social responsibility was to increase profits. His philosophy, which became known as shareholder primacy, drew a stark line between shareholders and stakeholders—employees, communities, customers, and the environment. The effects of this philosophy became most visible in the 1980s, as companies embraced hostile takeovers, mergers, and acquisitions while antitrust enforcement weakened. Corporate raiders identified companies they could reorganize to maximize returns, often through job cuts, relocating headquarters, and taking on debt. The threat of takeovers forced many companies to shift toward shareholder primacy simply to survive. Meanwhile, lobbying became more sophisticated, allowing businesses to shape the laws that governed them. This transformation has led to extraordinary corporate concentration. In 2019, the 500 largest companies in the United States generated a combined $14.2 trillion in revenue—about two-thirds of the country's total economic output. The top 50 firms alone accounted for a third of national GDP. When the Fortune 500 list was first published in 1955, the 50 largest companies generated less than 16 percent of economic output. This concentration has stifled competition, innovation, and entrepreneurship. The consequences are visible across industries. In healthcare, pharmaceutical companies have raised prices on essential medications like insulin, putting lives at risk. In agriculture, family farms have been replaced by corporate operations that maximize efficiency at the expense of rural communities, workers, and the environment. The consolidation extends to airlines, telecommunications, beer, internet search, and countless other sectors. Even niche industries like portable toilets, prison phone services, and cheerleading equipment have fallen victim to monopolization. As corporations have grown larger, they've directed more of their gains to shareholders rather than workers or investments in innovation. S&P 500 companies spent $4.3 trillion on stock buybacks over the last decade—more than half of their net income—with another 39 percent going to dividends. These are trillions of dollars not spent on research and development, employee training, or equipment that would increase productive capacity. The result has been stagnant wages for workers even as corporate profits and executive compensation have soared. Since the 1970s, the top 1 percent have grown $21 trillion richer while the bottom 50 percent have grown $900 billion poorer.

Chapter 2: Government Decline: The Systematic Weakening of Public Institutions

When Hurricane Maria devastated Puerto Rico in 2017, the US government's response was catastrophically slow and inadequate. It took four days for the first shipments of food and water to arrive, thirteen days for a navy hospital ship to reach the island, and eleven months to fully restore power. Meanwhile, a nonprofit led by chef José Andrés was serving 146,000 meals per day within a month of the disaster. This failure exemplifies a broader decline in government effectiveness that has occurred alongside the rise in corporate power. The weakening of governmental power stems from several interconnected factors. Political polarization has created a "vetocracy" where obstruction becomes the dominant mode of governance. With numerous veto points built into systems like the US government, it has become increasingly difficult to pass meaningful legislation or eliminate outdated regulations. This leads to "kludgeocracy," where new laws are layered onto old ones, creating complex and inefficient systems that are difficult to administer. At the same time, key government institutions have been systematically weakened. The Internal Revenue Service, for example, saw its budget cut by 21 percent between 2010 and 2020. It now employs fewer auditors than it did in 1953 and audits less than half as many tax returns as it did a decade ago. Similar trends can be seen at the Environmental Protection Agency, Federal Trade Commission, and other regulatory bodies. These weakened institutions struggle to keep the private sector in check. The government also suffers from brain drain. Throughout the Cold War, many talented graduates were drawn to government service by a sense of mission and purpose. Today, few of the brightest minds view government as an attractive career path. The appeal of better pay, more independence, and sometimes even more power draws many public servants to the private sector while they still have decades left in their careers. This exodus of expertise leaves government less capable of developing and implementing effective policy. Perhaps most significantly, the private sector has played a striking role in sterilizing the state through lobbying and campaign finance. In 1975, federal lobbyists collectively drew less than $100 million in revenue. By 2019, that figure had grown to $3.5 billion. Companies and business associations now spend fifteen times more on lobbying than public interest groups and labor unions. This influence extends to legislation itself—one investigation found that more than 2,100 state laws enacted between 2011 and 2019 were copied nearly verbatim from lobbyist proposals. The Supreme Court's Citizens United decision in 2010 further empowered corporations by allowing unlimited "independent political spending." Outside groups spent $680 million during the five national election cycles preceding the decision. In the five cycles after the ruling, they spent $4.4 billion. This money has a clear impact: in 2018, 83 percent of Senate races and 89 percent of House races were won by the candidate who spent the most. The result is a government that prioritizes the interests of corporations and wealthy elites over those of average citizens.

Chapter 3: Labor's Diminishing Voice: The Erosion of Worker Bargaining Power

The golden age of American labor emerged from the 1936-37 sit-down strike at General Motors. Workers occupied the factory for 44 days, bringing production to a halt until the company agreed to recognize the United Auto Workers union. This victory galvanized union activity across industries. Within a year, UAW membership increased from 30,000 to 500,000, and between 1934 and 1943, the proportion of unionized workers more than tripled. By the early 1950s, one in three American workers belonged to a union. These unions helped win critical protections: minimum wage, unemployment insurance, the forty-hour workweek, sick leave, antidiscrimination laws, child labor laws, and pensions. The very foundation of the middle class emerged from the labor movement. However, union membership in the United States peaked in 1954 at 35 percent of the workforce and has steadily declined since. By 2019, only 10.3 percent of workers belonged to a union, with just 6 percent in the private sector. This decline stems from multiple factors. The PATCO strike of 1981 marked a turning point when President Reagan fired 11,000 air traffic controllers who had walked off the job. This sent a clear message to employers across the country: do not let strikes intimidate you. Companies began simply replacing striking workers rather than conceding to their demands. The number of major strikes plummeted from an average of 234 per year before PATCO to just 15 per year in the 2010s. Globalization and technological change further eroded labor power. As manufacturing jobs moved overseas, union strongholds disappeared. The knowledge- and service-based jobs that replaced them were more dispersed and difficult to organize. Meanwhile, labor laws were weakened, making it harder for workers to form unions. The shift toward shareholder capitalism incentivized companies to minimize labor costs, while the decline of unions left workers with less bargaining power. Today's labor movement faces additional challenges from the changing nature of work. Jobs have become more mobile and short-term, with many workers classified as independent contractors rather than employees. The "gig economy" exemplified by companies like Uber and Lyft has created a workforce that is isolated and difficult to organize through traditional means. However, some workers are finding innovative ways to mobilize, such as Rideshare Drivers United, which used social media and a custom app to organize thousands of drivers for a nationwide strike in 2019. Looking to the future, labor movements need to adapt to these new realities. They must fight for portable benefits that follow workers from job to job, opportunities for continuous skill development, and greater say in corporate governance. Models from northern and central Europe offer potential paths forward. In countries like Denmark, Finland, Norway, and Sweden, unions negotiate at the national, industry, and company levels, covering more than 70 percent of workers. Germany and other nations require worker representation on corporate boards through "codetermination," which has been linked to greater job security, lower income inequality, and more long-term decision-making.

Chapter 4: Tax Havens: How Global Avoidance Undermines Social Foundations

When an Italian consumer buys a leather belt online through a Google ad, they might assume the transaction is simple: money flows from buyer to seller, with a small cut going to Google and appropriate taxes paid to the Italian government. In reality, Google has constructed an elaborate system to ensure that almost none of the revenue it generates in Italy is taxed there. Through mechanisms like the "Double Irish with a Dutch Sandwich," Google routes profits through subsidiaries in Ireland, the Netherlands, and Bermuda, reducing its effective tax rate from Italy's 24 percent to a mere 0.7 percent. This tax avoidance strategy is not unique to Google. Multinational corporations around the world use similar techniques to shift profits from high-tax jurisdictions to tax havens. They employ transfer pricing, manipulating payments between their subsidiaries to minimize taxable income in countries with higher rates. In 2019, American corporations reported earning $577 billion in profits outside the United States, with nearly 60 percent of that money "earned" in just seven low-tax jurisdictions, many with tiny populations and economies. The scale of this problem is enormous. Economists estimate that governments worldwide lose more than $500 billion annually due to corporate tax avoidance, with another $200 billion lost to tax evasion by wealthy individuals. The United States and European Union each lose about $190 billion in taxes every year, but developing countries are hit even harder proportionally. For these nations, corporate tax typically comprises 15 percent of total tax intake versus 10 percent in developed countries. Tax havens enable this system by offering drastically reduced tax rates and secrecy. These jurisdictions come in various forms—countries like Ireland and Luxembourg, states like Delaware and South Dakota, or semi-sovereign territories like Bermuda and Hong Kong. Many specialize in certain services: hedge funds prefer the Cayman Islands, insurance companies favor Bermuda, and Wall Street financiers gravitate to Delaware. What they all offer is an escape from the laws of other places. The modern offshore system emerged after World War II, with the United Kingdom playing a central role. The City of London helped transform British territories like the Cayman Islands into tax havens, creating a network that now includes eight of the thirteen jurisdictions worldwide with no general corporate income tax. Meanwhile, the United States has taken half measures against other tax havens while becoming one of the world's leading secrecy jurisdictions itself. The Tax Justice Network ranks the US as the second-most secretive jurisdiction globally, behind only the Cayman Islands. This race to the bottom in tax policy has shifted the burden of funding government from corporations to individuals. In 1952, corporate taxes accounted for approximately 32 percent of US federal tax revenue. By 2019, that figure had fallen to less than 7 percent. During the same period, the proportion of revenue from individual income and payroll taxes rose from 52 percent to 86 percent. Between 1980 and 2019, the average corporate tax rate worldwide fell from 40.4 percent to 24.2 percent.

Chapter 5: Corporate Diplomacy: When Companies Become Geopolitical Actors

Historically, companies have been subservient to the state. For centuries, loyalty to one's country was simply a cost of doing business. During World War II, General Motors, Ford, and Chrysler stopped assembling cars and started building tanks, airplanes, and ammunition for the Allied war effort. Throughout the Cold War, Western multinational businesses and democratic governments worked in lockstep on foreign policy issues, representing two faces of the same political and economic model against Soviet communism. When the Cold War ended, however, this relationship fundamentally changed. With the dissolution of the Soviet Union, capitalism became the triumphant economic model. Western democracies rolled back many financial and legal guardrails that had tethered businesses to government while simultaneously building infrastructure for a global economy. Companies, now free from constraint and with the whole world accessible to them, increasingly set up global operations. The number of multinational companies increased from approximately 7,000 in the late 1960s to 82,000 by 2008, and likely twice that today. As these companies grew and invested across global markets, their ties to their home countries weakened. Once bound by patriotic obligations, companies' loyalties shifted to wherever most benefited their balance sheets. With enough resources, a multinational can effectively customize its social contract—adhering to the tax laws of the Cayman Islands, the labor regulations of China, and the trade policies of the United States. Its customer base is global, and its political alliances are flexible. This shift has created both challenges and opportunities in addressing global problems. In some areas, like artificial intelligence and cybersecurity, companies possess expertise that governments lack. When Chris Lynch joined the US Defense Digital Service in 2015, he discovered that the Pentagon needed help with basic technology tasks like converting JPEG files to PDFs, while companies like Facebook were developing sophisticated AI systems. This expertise gap has made tech companies crucial partners in national security. The rise of cyber warfare and AI-powered military applications has further blurred the lines between corporate and government roles. Unlike traditional weapons, digital tools like AI have dual uses—the same facial recognition technology that can identify terrorism suspects can also track ethnic minorities. The regulatory frameworks that governed arms control during the Cold War do not adequately address these technologies. Companies must therefore make their own ethical judgments about what they will and won't develop. This places enormous responsibility on technology firms. When Lynch founded Rebellion Defense to provide AI tools to the US military, he established monthly meetings where employees discuss which projects and customers they would refuse to work with. The company has already determined it will not build domestic surveillance technology or aid in rounding up undocumented immigrants. Other companies have drawn different lines—Google withdrew from the Pentagon's Project Maven after employee protests, while Microsoft has continued working on military AI applications.

Chapter 6: Stakeholder Capitalism: Measuring What Matters Beyond Profit

The absurdities of shareholder capitalism have become so clear and extreme that the tide seems to be turning. Even business leaders have begun advocating for a return to stakeholder capitalism, where companies consider their impact on employees, customers, communities, and the environment alongside shareholders. In 2019, 181 members of the Business Roundtable signed a letter committing to this broader view of corporate purpose, effectively calling for a return to the more holistic approach that dominated the mid-20th century. For stakeholder capitalism to work, however, we need concrete metrics and accountability mechanisms. Just as companies have countless ways to measure shareholder value—return on assets, return on equity, price/earnings ratio, internal rate of return, gross and net margins—we need similar standards for calculating stakeholder value. Former British cabinet member Douglas Alexander suggests creating the equivalent of generally accepted accounting principles (GAAP) for corporate impact, providing "a common metric or common language" to measure both positive and negative externalities. One approach is to use the tax code to drive behavior change. Companies respond to incentives, so we need to provide incentives for them to stop the race to the bottom on environmental damage and workers' rights. Former Bank of England governor Mark Carney has suggested linking executive pay to climate risk management—the more a company contributes to goals set out in the Paris climate accord, the more its executives get paid. Companies like Patagonia demonstrate that stakeholder capitalism can work in practice. Founded by rock climber Yvon Chouinard, Patagonia has prioritized environmental sustainability throughout its history. In 1996, it switched to 100 percent organic cotton despite higher costs. The company has launched initiatives to fight "fast fashion," including a platform for customers to trade, sell, or buy secondhand Patagonia clothes. In 2017, it sued the federal government over plans to reduce the size of national monuments in Utah. These decisions have not hurt the company's bottom line—if anything, they have strengthened customer loyalty. Similarly, Walmart has used its market power to drive positive environmental change. In 2007, it began selling only concentrated liquid detergent, which used less water and smaller packaging than traditional detergent. This saved 400 million gallons of water, 95 million pounds of plastic, and 125 million pounds of cardboard over three years. The company has also phased out harmful chemicals from products sold in its stores and pressured suppliers to embrace sustainability and reduce greenhouse gas emissions. Even Wall Street firms like Goldman Sachs are finding ways to use their influence for good. In 2020, CEO David Solomon announced that Goldman would underwrite initial public offerings only for companies with diverse boards. This policy has pushed venture capitalists and private equity firms to prioritize diversity at companies preparing to go public. Solomon notes that the policy makes business sense—among US companies Goldman has taken public since 2016, those with at least one woman on the board had a median return rate of 19 percent, compared to just 2 percent for those with all-male boards.

Chapter 7: Toward a New Social Contract: Principles for Rebalancing Power

The social contract that allowed stable democracies to emerge was a historic innovation. It cracked an ever-present problem—that those who gained power were likely to abuse it. Through democracy, it became possible for individuals to come together and use their collective power to make life better for the whole, while guarding against the rampant abuse that is always possible when power ends up in the hands of a few. However, this social contract has been steadily eroded over the past half century. To rebuild a functioning social contract for the digital age, we must address the fundamental imbalances in power between corporations, governments, and citizens. This requires action on multiple fronts, beginning with a complete overhaul of our tax system. The current race to the bottom in corporate taxation has shifted the burden from companies to individuals while depriving governments of resources needed for essential services. A global minimum tax and automatic information-sharing agreements between countries would help ensure that everyone pays their fair share. We must also reimagine labor for the 21st century. As work becomes more mobile and short-term, workers need portable benefits that follow them from job to job. They need opportunities for continuous skill development and greater say in corporate governance. The labor movement must think beyond traditional organizing tactics and immediate economic concerns to address broader issues of democracy, inequality, and corporate power. Most importantly, workers need access to capital ownership—not just wages—to benefit from the wealth creation of the digital economy. Corporate governance must evolve to balance the interests of all stakeholders. This means developing clear, transparent, industry-specific measures with goals and benchmarks that define who a company's stakeholders are and how performance against stakeholder goals will be measured. It means giving workers seats in the boardroom and creating accountability mechanisms for environmental and social impact. And it means aligning executive compensation with long-term value creation rather than short-term stock price manipulation. The role of government must also be reimagined. Rather than continuing to weaken public institutions in the name of "efficiency," we need to invest in government capacity and expertise. This includes reforming political systems to reduce polarization and gridlock, strengthening regulatory agencies to keep the private sector in check, and addressing the brain drain that has left government less capable of developing and implementing effective policy. Countries like Singapore offer models for recruiting and retaining top talent in public service through competitive compensation and prestigious career paths. In the international arena, we need new frameworks for addressing global challenges like climate change, cyber warfare, and pandemic disease. These issues transcend national borders and require coordinated responses. Companies have a role to play here as well, using their expertise and scale to help create a more stable global order. But their involvement must be guided by clear ethical principles and accountability to the public interest.

Summary

The fractured social contract between corporations, governments, and citizens represents one of the most significant challenges of our time. The systematic concentration of corporate power, coupled with the deliberate weakening of government institutions and labor organizations, has created profound imbalances that threaten both economic prosperity and democratic governance. Tax havens enable corporations to escape their social responsibilities, while the transformation of companies into geopolitical actors further complicates the relationship between private and public power. Rebuilding a functional social contract requires a comprehensive approach that addresses these imbalances across multiple dimensions. We need tax systems that ensure corporations contribute their fair share, labor policies that give workers meaningful bargaining power, corporate governance structures that balance the interests of all stakeholders, and government institutions with the capacity to serve the public good. Only through such fundamental reforms can we create an economy that works for everyone, not just shareholders and executives. The path forward demands not just policy changes but a deeper reconceptualization of the relationship between economic power and democratic values in the twenty-first century.

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Alec J. Ross

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