Seemingly at least once a week, I read in the Guardian an article about how capitalism is in its death throes. What’s conspicuous by its absence in every single one of these pieces is what exactly is going to replace it as an economic system.
In the middle of the 20th century, the Left had an answer to what should replace neoliberal economics: socialism. But then even the Left figured out that it had more than a few flaws in it around the time of the Berlin Wall coming down. They abandoned socialism for the sort of Keynesian social democracy that the Labour Party and most other European democratic socialist parties always carried through whenever they got into office anyhow. Socialism was still mentioned, but in hollow, meaningless terms; a sort of catch all of left thinking that didn’t really mean what it used to.
This is why these articles in the left of centre news outlets heralding the impending demise of capitalism are slim on the details of what exactly replaces it. Because if socialism in the real sense of the word has been discredited, what are you talking about in terms of alternative models?
To paraphrase Churchill, capitalism is the worst economic system, except for all those other forms that have been tried from time to time. It can create huge divides between rich and poor. It can leave those at the bottom of the socio-economic pile ruthlessly exploited. It can also lift millions of people out of poverty as well. It’s a mixed bag. Which, as I say, is a lot better than communism, which resulted in totalitarianism 100% of the times it was ever attempted.
I say all of this because I would be genuinely interested in hearing about realistic alternatives to capitalism, should they be out there. As I said, it’s the least bad system in many respects, very far from perfect. But the 20th century taught us a lot about the dangers of utopian ideas that lead to totalitarianism.
I would argue in closing that before you start talking about an economic system being on the verge of obsolescence, you’d better have whatever is supposedly going to take its place fully thought out and ready to go.
http://www.sacredeconomics.com
http://sacred-economics.com/
http://sacred-economics.com/ is the correct link, sorry
Tempered Capitalism is probably the answer. Just as existed and flourished in 1950s to 1970s. Where tax was pretty high to pay for a good welfare system – the foundation of any good society – and equality of life and wage was a key factor.
Capitalism has been commandeered by big, powerful corporations that have not been tempered in their behaviours – now it is too late as they are more powerful than governments. Wages get squeezed and the planet’s resources treated with disdain. The key problem is size – large companies have a big commitment to many employees and that largely forces them to do whatever it takes to survive.
At one point in the 19th century, Britain dismantled corporations because they were deemed to becoming too big and powerful. We can do it again – it happened in Latin America to good effect.
Ultimately, humans work best in groups of about 150 – go way beyond that and the social disconnect is a lethal problem – how often does a CEO work on the shop floor in disguise and make sweeping changes as a result of what he sees – the result of reconnecting.
@Neil Moffat “it happened in Latin America to good effect.” I’m intrigued – which country/countries are you referring to here and what changes did they make?
I absolutely agree with you. That there is no creditable alternative on the horizon. As an observation I think the Labour party is involved in a deception to keep their core vote. They do not represent labour. They are a centre right party pretending to be centre left in order to hoodwink those of the electorate of a left or centre left persuasion to vote for them. Their record in the last government involved allowing the city to do exactly what it wanted. Gordon Brown and Clinton in the USA deregulated the banks more than ever before. They are just like the Conservatives in their overall approach to the way the economy should be run. But they are just not very good at it. The Conservatives are more upfront. You get what it says on the tin and they are good at running the economy. I think they (the Conservatives) should be listening to “The Good Right” The electorate know they can run the economy but they are seen as only representing the rich and powerful. If the Conservatives were more inclusive they would win a land slide victory.
Thanks. As ever, the acquisition of power creates deceptions that hide true motives. Labour have a patchy, unconvincing attitude towards workers. I prefer the Green Party policies that are, apparently costed. But they have zero experience in large scale economic matters.
I think Georgism has the answers we seek. The idea that a person owns the value of what they fairly create but that economic value that derives from natural resources should belong equally to everyone. This is why I have become a proponent of a land value tax to replace our current property tax system. The idea is to tax the value of land minus the value of improvements and it is considered to be the most efficient, fair and equitable of taxes.
I think you are right Nick. However as Smith warns us, Capitalism has a tendency towards monopoly. We should be very aware of this and try and avoid it.
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