The Future of Capitalism: Facing the New Anxieties

282 Pages·2016·1.66 MB·English

by  Paul Collier

Dedication
for Sue
diverging lives, converging anxieties
Contents
Cover
Title Page
Dedication
Part One: Crisis
1: The New Anxieties
Part Two: Restoring Ethics
2: The Foundations of Morality: From the Selfish Gene to the Ethical Group
3: The Ethical State
4: The Ethical Firm
5: The Ethical Family
6: The Ethical World
Part Three: Restoring the Inclusive Society
7: The Geographic Divide: Booming Metropolis, Broken Cities
8: The Class Divide: Having it All, Falling Apart
9: The Global Divide: Winners, and the Left Behind
Part Four: Restoring Inclusive Politics
10: Breaking the Extremes
Acknowledgements
Bibliography
Notes
Index
Copyright
About the Publisher
Part One
Crisis
1
The New Anxieties
PASSION AND PRAGMATISM
Deep rifts are tearing apart the fabric of our societies. They are bringing new
anxieties and new anger to our people, and new passions to our politics. The
social bases of these anxieties are geographic, educational and moral. It is the
regions rebelling against the metropolis; northern England versus London; the
heartlands versus the coasts. It is the less educated rebelling against the more
educated. It is the struggling workers rebelling against the ‘scroungers’ and
‘rent-seekers’. The less-educated, toiling provincial has replaced the working
class as the revolutionary force in society: the sans culottes replaced by the sans
cool. So, what are these people angry about?
Place has become a dimension of the new grievances; after a long period
during which geographic economic inequalities narrowed, recently they have
been widening rapidly. Across North America, Europe and Japan, metropolitan
areas are surging ahead of the rest of the nation. Not only are they becoming
much richer than the provinces, socially they are becoming detached and no
longer representative of the nation of which they are often the capital.
But even within the dynamic metropolis, these extraordinary economic gains
are heavily skewed. The newly successful are neither capitalists nor ordinary
workers: they are the well educated with new skills. They have forged
themselves into a new class, meeting at university and developing a new shared
identity in which esteem comes from skill. They have even developed a
distinctive morality, elevating characteristics such as minority ethnicity and
sexual orientation into group identities as victims. On the basis of their
distinctive concern for victim groups, they claim moral superiority over the less-
well educated. Having forged themselves into a new ruling class, the well
educated trust both government and each other more than ever.
While the fortunes of the educated have soared, pulling up national averages
with them, the less-well educated, both in the metropolis and nationally, are now
in crisis, stigmatized as the ‘white working class’. The syndrome of decline
began with the loss of meaningful jobs. Globalization has shifted many semi-
skilled jobs to Asia, and technological change is eliminating many others. The
loss of jobs has hit two age groups particularly hard: older workers and those
trying to find their first job.
Among older workers, job loss often led to family breakdown, drugs, alcohol
and violence. In America, the resulting collapse in the sense of a purposeful life
is manifested in falling life expectancy for whites who have not been to college;
this at a time when the unprecedented pace of medical advances is delivering
rapidly rising life expectancy for more favoured groups.1 In Europe, social safety
nets have muted the extremity of outcomes, but the syndrome is also widespread
and in the most broken cities, such as Blackpool, life expectancy is also falling.
Redundant over-fifties are drinking the dregs of despair. Yet the less-educated
young have fared little better. In much of Europe, young people face mass
unemployment: currently, a third of young Italians are unemployed, a scale of
job shortage last seen in the Depression of the 1930s. Surveys show an
unprecedented level of youthful pessimism: most young people expect to have
lower living standards than their parents. Nor is this a delusion: during the past
four decades, the economic performance of capitalism has deteriorated. The
global financial crisis of 2008–9 made it manifest, but from the 1980s this
pessimism has been slowly growing. Capitalism’s core credential of steadily
rising living standards for all has been tarnished: it has continued to deliver for
some, but has passed others by. In America, the emblematic heart of capitalism,
half of the 1980s generation are absolutely worse off than the generation of their
parents at the same age.2 For them, capitalism is not working. Given the huge
advances in technology and public policy that have taken place since 1980, that
failure is astounding. These advances, themselves dependent on capitalism,
make it entirely feasible for everyone to have become substantially better off.
Yet a majority now expect their children’s lives to be worse than their own.
Among the American white working class this pessimism rises to an astonishing
76 per cent.3 And Europeans are even more pessimistic than Americans.
The resentment of the less educated is tinged with fear. They recognize that
the well educated are distancing themselves, socially and culturally. And they
conclude that both this distancing and the emergence of more-favoured groups,
perceived as creaming off benefits, weaken their own claim to help. The erosion
of their confidence in the future of their social safety net is happening just as
their need for it has increased.
Anxiety, anger and despair have shredded people’s political allegiances, their
trust in government and even their trust in each other. The less educated were at
the core of the mutinies that saw Donald Trump defeat Hillary Clinton in the
USA; Brexit defeat Remain in the UK; the insurgent parties of Marine Le Pen
and Jean-Luc Mélenchon gain over 40 per cent of the vote in France (shrivelling
the incumbent Socialists to under 10 per cent); and in Germany so shrinking the
Christian Democrat–Social Democrat coalition to turn the far right AfD
(Alternative for Germany) into the official opposition in the Bundestag. The
education divide was compounded by the geographic divide. London voted
heavily for Remain; New York voted heavily for Clinton; Paris eschewed Le Pen
and Mélenchon; and Frankfurt eschewed the AfD. The radical opposition came
from the provinces. The mutinies were age-related, but they were not as simple
as old-versus-young. Both older workers, who had been marginalized as their
skills lost value, and young people, entering a bleak job market, turned to the
extremes. In France, youth voted disproportionately for the new-look far right; in
Britain and the USA, they voted disproportionately for the new-look far left.
Nature abhors a vacuum, and so do voters. The frustration born of this gulf
between what has happened and what is feasible has provided the pulse of
energy for two species of politician that were waiting in the wings: populists and
ideologues. The last time capitalism derailed, in the 1930s, the same thing
happened. The emerging dangers were crystallized by Aldous Huxley in Brave
New World (1932) and George Orwell in Nineteen Eighty-Four (1949). The end
of the Cold War in 1989 appeared to usher in a credible prospect that all such
disasters were behind us: we had arrived at ‘the end of history’, a permanent
utopia. Instead, we are facing the all-too-credible prospect of our very own
dystopia.
The new anxieties have promptly been answered by the old ideologies,
returning us to the stale and abusive confrontation of left and right. An ideology
offers the seductive combination of easy moral certainties and an all-purpose
analysis, providing a confident reply to any problem. The revived ideologies of
nineteenth-century Marxism, twentieth-century fascism and seventeenth-century
religious fundamentalism have all already lured societies into tragedy. Because
the ideologies failed, they lost most of their adherents, and so few ideologue
politicians were available to lead this revival. Those that were belonged to tiny
residue organizations: people with a taste for the paranoid psychology of the
cult, and too blinkered to face the reality of past failure. In the decade preceding
the collapse of communism in 1989, the remaining Marxists thought they were
living in ‘late capitalism’. The public memory of that collapse has now receded