Sunday 28 September 2008

The coming new kind of capitalism

Geoff Payne very kindly sent me the attached essay by John Gray, which says that the collapse of the American model of capitalism is as significant an event as the collapse of the Soviet model. We are now heading for a different kind,he said:

I think that’s absolutely right. The question for Liberals is: what kind?

Because it seems to me that we might have a choice before us. We should certainly express a preference before it is too late. The two kinds of capitalism that remain on offer are:

1. The Chinese version: a technocratic and monopolistic clash of barely regulated giants, where monopoly power is allied to the authoritarian power of the state, where dissent from Tescoworld becomes downright dangerous, all underpinned by the power of sovereign wealth funds.

2. The Liberal free trade version: a model with small enterprise at its heart, where monopolies are cut down to size, where people can raise the finance they need to start in business, and where financial services assume their proper place – as the plumbing function of local enterprise, no longer the fearsome, corrosive tail wagging the dog.

It’s miserably ironic that Liberals should have been searching for the past generation or so for something to say about economics – rather than clinging pathetically to ‘sound money’ long after its funeral oration – when, all along, Liberal free trade needed re-articulation.

It’s simple really. It might feel a little rusty to start with, but we Liberals will soon get the hang of it again.

But we’d better do so quickly, because nobody else is going to do it. And we will otherwise sleepwalk into the long night of Chinese-style corporate capitalism.

1 comment:

Jock Coats said...

We certainly do need to reconnect. But I don't see your problem with "sound money" *as well*.

I am quite agnostic about the future of money. I prefer the Hayekian model of competing commercial (and non-commercial, social) currencies.

But when the money the city trades in, inflates and eflates on a corporate whim, is the same stuff nominally issued and regulated in *our name* then I don't see why we should not create a system that is inherently more stable.

Complementary currencies can of course circulate alongside that which you may be expected to pay your taxes in and may indeed account for most trade, but we can't be held hostage to private interests inflating and deflating the "common" currency in the system.