Capitalism – what is it? Can it change for the better?

If character traits are getting more inward and selfish, what does this mean for our ability to create a better future?

The recent series I did on Paul Collier’s “Future of Capitalism” makes me realise that I have never offered a serious post on “Capitalism – what is it and can it change its spots?”. This is how I had left things -

By the turn of the millennium the message seemed to be that Capitalism takes various forms; is constantly changing; and will always be with us. But increasingly, people were wondering whether it was not out of control.

And a few years back, something changed. It wasn’t the global crisis in itself but rather the combination of two things – first the suggestion that the entire engine of the system (profitability) was reaching vanishing point; and, second, a sudden realisation that robotization was a serious threat to even middle-class jobs. Now the book titles talk of the new phenomenon of “post-capitalism” 

Curious that I omitted global warming the growing appreciation of whose reality makes it a third factor. I have therefore developed a table which identifies what I consider are the most accessible books about the nature of this system “without a proper name”. In my day we knew the system as “the mixed economy” but that phrase fell out of favour in the 1980s in the face of the onslaught of privatisation.

“Neoliberalism” wasn’t a very good substitute since very few people knew what this meant – indeed it clearly registered as a term of abuse…..And any use of the term “capitalism” was banned in all but the most militant circles….. 

You almost felt the sense of relief when the phrase “post-capitalism” came along – a system whose name didn’t embarrass us!!!!

The table looks at almost a dozen very different specialisms (inc journalism, religion and policy analysts/think tankers).

I have to confess that I get very impatient with the incredible specialism in the so-called “social sciences” which has developed these past few decades with the expansion of universities. Two things in particular annoy me - first the lack of communications between these so-called “experts” is nothing short of criminal. Most of them received free education and yet, starved of the slightest contact with those developing similar thoughts in separate fields (let alone with real life), offer us, with few exceptions, boring, barren thoughts

And I get impatient, secondly, with the amnesia of these micro-specialists…their worship of the new…just look at the recommended reading they inflict on their poor students……very little before 2000….And my own lists are the same……And note what the author of one of the clearest books on capitalism said in 2008

“No social scientist over the past half century has added anything that is fundamentally new to our understanding of the capitalist economic system”

Geoff Ingham in “Capitalism” (2008)

I have selected the books which appear in the table according to whether they portray a world of “perfect competition” in which, according to the theory, no one has any power or, at the other extreme, a world of large companies and groups exercising power (legal and illegal).

We are prone these days to use ideological labels too easily – so I want to avoid that by using less obvious labels.

-      “Mixed” therefore covers those who clearly argue for what used to be called “the mixed economy” and are quite clear that they wish a better, more balanced capitalism;

-      The “critical-realist” label covers those who go further in their critical approach, extending their analysis to the role exercised by dubious and illegitimate power players who try to buy democracy and whose activities threaten the planet’s very survival.

    

Needless to say, the allocation to one particular column is arbitrary and could be disputed – as can the choice of illustrative authors and books! I shall try to say something about my choice in a subsequent post...   

Key Texts about the future of capitalism – by academic discipline and “approach”

Academic Discipline	1. Critical-Realist	2. Mixed approach	3. “market” proponents
Economics	Conceptualising Capitalism – institutions, evolution, future; Geoff Hodgson (2015) Debt and Neo-Feudalism; Michael Hudson (2012) Credo – economic beliefs in a world of crisis; Brian Davey (2015). Davey is not a career or conventional economist!	People, Power and Profits – progressive capitalism for an age of discontent; Joseph Stiglitz (2019) The Future of Capitalism – facing new anxieties; Paul Collier (2018) Shifts and Shocks – what we’ve learned, and still have to, from the financial crisis; Martin Wolf (2014) – with accompanying power point presentation	Why Globalisation Works; Martin Wolf (2004) most of the discipline
Economic history	Capitalism and its Economics – a critical History; Douglas Dowd (2000) Never Let a Good Crisis go to waste; Philip Mirowski  (2013)	Crashed – how a decade of financial crises changed the world Adam Tooze (2018)	Economic historians by definition have a strong sense of political and other institutions
Political economy	“The Lugano Report: On Preserving Capitalism in the Twenty-first Century” – Susan George (1999). Susan Strange - The Retreat of the State (1994) - States and Markets (1988) - Casino Capitalism ; (1986)	Austerity – the history of a dangerous idea; Mark Blyth (2013) Yanis Varoufakis - And the Weak Suffer what they must – Europe, austerity and the threat to global stability (2016) - The Global Minotaur (2012)	The discipline still rediscovering itself but, again, by definition, has a strong sense of the importance of institutions
Political Science	Crisis without End - the unravelling of western prosperity: A Gamble (2014) Democracy Incorporated – managed democracy and the spectre of inverted totalitarianism; Sheldon Wolin (2008)	Paul Hirst eg Revisiting Associative Democracy; ed Westall (2011). The Great Disruption – human nature and the reconstitution of social order; Francis Fukuyama (1999) Mammon’s Kingdom – an essay on Britain, Now; David Marquand (2015)	Only a few brave pol scientists trespass into the economic field – although it is becoming more fashionable
Policy analysis/Think Tanks		“The Locust and the Bee – predators and creators in capitalism’s future”; G Mulgan (2015)	An Intro to Capitalism (IEA 2018)
Sociology	Wolfgang Streeck. - How will Capitalism End?; (2016) - Buying Time – the delayed crisis of democratic capitalism (2013) End of capitalism? Michael Mann (2013) Capitalism; Geoff Ingham (2008)	Vampire Capitalism – fractured societies and alternative futures; Paul Kennedy (2017)	The sociological voice is still inspired by C Wright Mills, Veblen, Weber and Durkheim
Geography	David Harvey - Seventeen Contradictions and the End of Capitalism (2014) - The Enigma of Capital (2010) - A Brief History of Neo-Liberalism (2005).	Danny Dorling - A Better Politics – how government can make us happier (2016 - Injustice (2014)	The geographers are a bolshie lot - with a strong sense of geo-politics
Environment	Come On! Capitalism, short-termism, population and the destruction of the planet; (Club of Rome 2018).	Why we can’t agree about Climate Change; Mike Hulme (2009) Natural Capitalism – the next industrial revolution; Paul Hawken (1999)	they pride themselves on their technocracy
Journalism	Post Capitalism – a guide to our Future; Paul Mason (2015) …. The Capitalism Papers – Fatal Flaws of an Obsolete System; Jerry Mander (2012).	How Good Can we be – ending the mercenary society Will Hutton (2015) Capitalism 3.0 Peter Barnes (2006)	They don’t enjoy the tenure of the academics (altho Hutton is a college Director)
Management and man’t studies	“The Dictionary of Alternatives – utopianism and organisation”; M Parker (2007)	Rebalancing Society; Henry Mintzberg (2014) Peter Senge Charles Handy	Most mant writers are apologists – apart from the critical mant theorists
Religious studies	Laudato-Si – Pope Francis’ Encyclical (2015). Accessible in its entirety here	The Crisis of global capitalism – Pope Benedict XVI’s social encyclical and the future of political economy; ed A Pabst (2011) Questions of Business Life; Higginson (2002)	A more ecumenical bunch!

Psychology

What about me – the struggle for identity in a market based society?; Paul Verhaeghe (2014)

organising local services

Another interesting organisational perspective from BBC World Service – in the first part of a series on the Ganges River whose “magic” qualities have been worshipped by pilgrim bathers for centuries. But all is not well since many dams have been built for purposes of irrigation or general water management. You’ll forgive me said one polite Indian – for saying that the English have a lot to answer for! Water resource management apparently used to be handled by small communities along with many others such as cultural life, etc Then the English came to India and split everything into specialised functions – with irrigation being a separate function from water resource management and from cultural traditions. A crucial holistic dimension was lost as a result. A nice “take” on the silo mentality I referred to yesterday – introducing an important “systems” dimension to the discussion.

If you look at local government systems, the Brits certainly seem to have caught the rationalistic addiction much more strongly than their European neighbours. I have to confess that I was part of the first such on onslaught in the 1960s when – as part of the critical mood then in the air about our institutions - independent commissions in England and Scotland examined the local government systems in those countries and came up with radical solutions which found their way into legislation.

Scotland’s was more radical – Adam Smith’ ghost of specialisation perhaps? 625 municipalities of different sorts (large towns, small towns, Counties and communes) were converted into a two-tier system of 65 municipalities.
Literally a decimation – with 9 Regions, 53 Districts and 3 Island Authorities coming into being in 1975.

As a councillor in a large burgh of 65,000 souls (whose educational, police, water and sewage requirements were taken care of by a County Council – coveting about 300,000 people), I was a strong advocate of their replacement by a District of 110,000 people and a Region (Strathclyde) of more than 2 million whose destinies had been strongly linked by the River Clyde.

But people believed then in “economies of scale”.

In fact, the Region functioned remarkably well – with the development of a new strategic dimension into policy-making which tried to pay proper respect to political, professional and community perspectives; its scale making it the first municipal body to forge a relationship with the European Commission and also making it easier to advance the internal arguments for experimentation and decentralisation at both the county and community level.

Recently Kenneth Roy suggested that the leakage of power from the Scottish towns was responsible for the poor shape in which they find themselves now – and he made a good case (as he always does). I was glad to see, however, that Alex Wood at least put up a rebuttal, arguing how corrupt and complacent town government had become. And, he might have added, the County Councils had already taken their power away – and were not directly elected! This was the critical note I struck in my contribution (What sort of Over-government?) to the Red Book on Scotland which Gordon Brown edited in 1978.

However, it is true that Scotland is now at the far end of the spectrum of the European scale as far as municipal size is concerned – with a one tier system of 23 Districts having been introduced in 1999. A major restructuring every 25 years does not seem a good approach! The French have a reputation for excellent public services – and have held on to their small communes. And their engineers, of course, are still held in higher regard than managers!
However French and German municipal services are now threatened by the credit crunch.

By the way, for further analysis of the Kyrgyzstan developments see an article on the excellent Open Democracy site -
http://www.opendemocracy.net/od-russia/boris-dolgin/kyrgyzstan-what-will-happen-to-tulips

ps - the picture above is the Ploiesti Clock museum - with the Boulevard Restaurant to its right