Simon Caulkin is, in my opinion, one of the best business witers there is.
He's written a powerful piece on why it is hard to be an optimist now which includes this telling, and I think true,paragraph:
Let’s face it, if the private sector, the engine room of capitalism, is now too feeble to keep people in work, in food and shelter and in decent retirement, then either capitalism ceases to be defensible, or the engine room needs a complete and urgent overhaul.
It's worth reading the rest.
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I’m with Marx. Capitalism needs to be done away with, not overhauled.
When the Observer stopped Simon’s regular slot on management, I stopped taking it seriously as a newspaper (also because Rawnsley’s hatchet job on Brown in time for the election didn’t help either) – I only read it now for William Keegan’s economics slot.
If you watch the the documentary film ‘The Flaw’, it has an excerpt from a cartoon film on capitalism from the 1950’s that defines capitalism as:
‘delivering the greatest amount of social welfare to the greatest amount of people’.
These days capitalism seems to be delivery the greatest amount of social welfare to those only at the top so I agree that this latest version is not functioning.
As to why this is so, then I’d point the finger at neo-libreralism. It seems to me that Western Capitalism ran into trouble with the oil shock of the early 1970’s.
This shock of increased prices gave the Chicago boys the opportunity to peddle their lies about welfare systems etc. This meant that the West could hide the fact that there had been a shift in power and blame their woes on self-generated things like free healthcare, pensions, full employment and the like.
That’s when the great ‘unravelling’ of a lot of our post war achievements started to happen.
The reality is that we are ALL stakeholders in capitalism – there is enough money for everyone to benefit well. Neo-liberalism is actually creating serfdom – not social security – as witenessed by zero hours contracts, low pay and niggardly pension contributions and the exporting of perfectly good jobs abroad to increase shareholder value.
I just wish there was the political will to help save capitalism from itself for it sows the seeds of its destruction – as history tells us.
I tend to agree with your analysis of the Observer, which now frequently disappoints
And of capitalism too
“These days capitalism seems to be delivery the greatest amount of social welfare to those only at the top so I agree that this latest version is not functioning”
Mark C- No versions have worked in respect to equitable distribution-in the early decades of the 19th century the basic necessities of life were HARDER for most to get than in the 15th (See Rowbotham: The Grip of Death).
Marx quotes Sismondi thus ‘the indefinite multiplication of the productive powers of labour can have no other result than the increase of luxury and enjoyment of the idle rich’. he goes on to further quote another writer that ‘in poor nations (without capitalist accumulation) the people are comfortable, in rich nations they are generally poor.’ Marx was clear that Capitalism was not fundamentally about wealth diffusion-without FDR/Liberal party reforms/Post war Labour there would have been no wealth diffusion but a society similar to Lang’s Metropolis.
We have to be careful when we say that it is ONLY this version that is screwed up lest we subconsciously succumb to the ‘capitalism spreads wealth’ myth that has become the mental wallpaper. Without organised labour exerting pressure on the system of capitalist accumulation it tends towards the greatest INEQUALITY possible before social unrest doesn’t let it get further (as we now see,perhaps, in Greece). I think this is also supported by the work of Picketty.
Hi Simon
My observation above was in relation to what I think we see in post-war Europe – that we had a short period of progressive capitalism before the oil shocks of the early 1970’s.
This period is also picked up by Picketty but he sees it as an aberration (I’ve only just started to read his book having just completed Richard’s most excellent tome) but I’m picking up that Picketty sees the long term trend as one of increasing capital accumulation throughout history.
Having said that, I’m sure that we can agree that the capitalism of post war Europe was more redistributive than it is now and that is what I would like to see again because I see it as the best compromise.
I am neither a Marxist nor a neo-liberal. I am at heart a humanist who is all too aware of how excessive riches and excessive poverty can twist people’s minds – as history tells us – it dehumanises the rich and the poor.
The neo-lib narrative attracts people because it talks of state coercion by taxes and regulation as a limit on personal freedom and promises something different. However, what neo-lib orthodoxy actually does is replace one form of coercion with another – that of the major players of so called free markets who coerce our future with less security so that the markets can have more certainty; all the risk is put on ordinary people. Apparently only Goldman Sachs is worthy of security!!
We have been trying to inject morality into these markets since we started to deregulate them and it still has not worked so therefore the State needs to step up to the plate and enforce some form of morality. That is what it has come down to. The problem is that the State may have already been captured by market thinking.
I’m sorry, but capitalism has and can spread wealth. Henry Ford believed that if he paid his workers adequately, they also became his customers; Robert Owen’s New Lanarkshire Mills provided decent homes and education for his workers because he observed that his work force maintained and even improved productivity because of these things he provided.
Today’s capitalism however is financialised to such a degree that it can only ever redistribute to the few. This is why wages, pensions and working conditions/zero hours contracts hurt us today – because everything is being asset stripped – the great hollowing out as Will Hutton called it.
Read the book ‘The Puritan Gift’ for example.
People, and plant are being sold off to create money that can be used to finance lending that creates a greater return of the investor than running boring old factories and having to provide toilets for the work force.
This finance-driven capitalism is as dangerous to the world as any threat from Islamic fundamentalism; it is toxic strain of capitalism that gives capitalism a bad name.
As for the alternatives, communism and socialism have not really provided any alternatives that I can see. No doubt you will tell me that America in particular has worked against such states and that their failure was due to being undermined. Fair enough – you have a point. Socialism works better when it is skilfully woven into capitalist structures by intelligent politicians – but I’m not sure it can work by itself.
Modern politics is nomothetic in nature – it is an act of belief in only one way as the true way. How many times was Thatcher or Blair made out as ‘conviction politicians’?
The reality is that there are many ways that can be made to work alongside of each in order to create a fairer society. Our failure to realise this is the human catastrophe of our age.
Capitalism means the ownership of land and capital by those who do not use them. Surely if we all paid a fee for exclusive access to our common wealth, land (LVT) and workers owned the capital goods they use, we’d have a much more equitable and efficient system.