People are talking about a Capitalism 4.0. Capitalism must change for the better, they say, and become more responsible. The financial crisis that started in 2008 has demonstrated that very clearly.
I don’t know much about macroeconomics, but I find this whole discussion almost as disappointing as I find it interesting. Surely it doesn’t take an economics professor to see that, far from promoting Capitalism 4.0, the financial crash punched market economics right in the face?
Critics of the current set-up often argue, and convincingly so, that our alleged free-market economy is far from free: rather, we’ve got fully-fledged socialism and market regulation for the rich – while indeed the 99% have to put up with the harsh conditions of the market. But neo-liberals don’t like this argument. It’s childish, they say, and it’s getting old.
The fact that the only thing they ever seem to be able to counter with is an arrogant frown or a patronising smile and head-tilt would perhaps be quite the give-away if it wasn’t for the fact that the framing of the debates they take part in is always inherently neo-liberal, making any statement critical of the free market sound absolutely absurd. Just like capitalist critiques are only ever met with the rhetorical question ‘So what do you want instead?’, those in search of a Capitalism 4.0 seem to, despite agreeing that the current system is massively flawed, base their reasoning on the assumption that there is no alternative to capitalism. It came, it saw, it conquered; and now it’s here to stay. Except it didn’t quite conquer. It fucked up.
Many have argued that, as part of Capitalism 4.0, the market needs to be more responsible. Fair trade must pay off, as must environmental consciousness. We must promote innovation and long-term strategies. When it pays off for businesses to be responsible, we will get a responsible capitalism. Voila!
Here’s the beef: these people are insisting on a free-market economy, yet they’re dreaming of ideals which are antithetical to the normative principles of market logic. The market doesn’t reward responsibility – it rewards efficiency which leads to the maximisation of profit. It’s plain and simple: the market doesn’t care. Yet we’re so wrapped up in this obsession with the market as the solution to all problems that we think we can nudge it into a position of promoting justice and equality, despite the complete opposites of those values being inevitable symptoms of a capitalist system. If anything is getting old, it’s that naivety. We clearly want state regulation of markets. We clearly have to admit that this is the end of neo-liberalism.
Oh, and one more thing: let’s just clarify once and for all what this economic growth that is being repeated like a mantra really is all about. Economic growth is about the rise in demand for commodities (we want more things!), and economic success is about consumers’ increased ability to purchase those commodities (we’re spending more money on things!). Viewed in a long-term perspective, capitalism has done a good job promoting economic growth – those numbers don’t lie. Yet, it doesn’t come as news to anyone that the inequality between the people buying those things and those unable to afford any things at all is increasing steadily.
Economic growth, then, is about comfortably rich people being able to get more comfortable. And really, in all honesty, how much more comfortable do we middle and upper class people need to get? How much stuff do we really need?
I’m sick of talking about capitalism, free markets and economic growth. Call me banal, but the only economics I want to talk about is the economics that puts people first.
