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September 4, 2018updated 06 Sep 2018 4:26pm

The New Capitalism: The titanic struggle of our times

By Spear's

Capitalism faces a titanic battle and must adapt – which is why Spear’s believes that global markets and commerce need to reform themselves and put sustainability at their hearts

When the history of our times comes to be written, we can fairly bet that the economists are going to be get a basting. Why, as the Queen so memorably asked of 2008, did none of them see the financial crash coming? The bankers and policymakers who oversaw the debt and derivatives tulip mania will fare worse, and rightly so.

A decade on, the long shadow of 2008 continues to hang over our lives. Most notably, it’s there in the concerning rise of populism across the continent of Europe and in the US. This is coupled with and not unconnected to a rising sense of economic inequality and ties into a broader fin de siècle fatalism that the West’s best days are somehow numbered. This apes the demographic fear that millennials will be the first generation to have it worse than their predecessors.

There’s something else seismic going on, too. As the cover story of this edition of Spear’s makes clear, we are in the midst of a paradigm shift in capitalism. This is not just in response to what’s happening in the environment, though climate change is occurring and rightly concerns a good number of right-thinking people. It’s also in the impact that our capitalism is having on our societies and how it’s making us feel as members of those social groups in an ever-more connected world.

Perhaps unsurprisingly, these impulses are felt strongest among the newer members of our society, the ones who are experiencing the world afresh.

Of course, some on the Left are scenting blood. Seeing the turmoil in the West – stagnant wages growth, faltering economic growth and a loss of economic and democratic self-confidence – they look at the rise of the digital economy, of the sharing economy, of trends such as ‘dematerialisation’ among the young, and predict that Marx is about to deliver what they’ve always wanted. An end to capitalism.

But this is far-fetched. Capitalism – as Max Weber put it, the ‘economic action which rests on the expectation of profit by the utilization of opportunities for exchange’ – is not about to give up the ghost. On the contrary, it will persist; it must persist – even if the things that people value in it or aspects of the exchange that forms its core evolve. As Adam Smith, the giant of the Scottish Enlightenment, opined, human beings live by exchange. We are economic and social animals.

Among those with a compelling response to the current pain affecting society is the Conservative MP, public intellectual and self-confessed Smithian, Jesse Norman. Drawing on the wisdom of Smith, Norman notes that if commercial society is failing to benefit all members of society, then it’s a sign that the markets that form its basis need fixing. Markets per se are still the answer, but they need to be reviewed.

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In the same way, advocates of a New Capitalism believe that it must become sustainable, because if it doesn’t then Old Capitalism will undermine its ability to achieve profit in the future. Sustainability means jam today, and jam tomorrow.

If we destroy the ability of future farmers to grow crops, for example, by ignoring the need to rein in carbon dioxide emissions now, then it’s bad for business as well as the planet. If we ignore the need of the coffee-store manager commuting on the Jubilee line to have affordable housing, it’s bad for business, as well as the fabric of our society. If we ignore the need to have accessible excellence in education for all, it’s bad all round – because ultimately we’re wasting talent and, as Guy Hands makes clear, it narrows our understanding of the world.

While some regard notions of ‘sustainable’ investment as bogus, or marketing-speak, or simply naïve, as our cover story makes clear, very large sums of money are now walking the walk when it comes to sustainability. As one of the interviewees in the story says, we just want capitalism to keep working. Trillions of dollars of investable assets agree. And so does Spear’s.

Capitalism, the commercial society, the market economy, with its concomitant dependence on personal liberty, is the basis for the ascent of mankind. We must not endanger it by ignoring the natural limitations of our planet.

In the aftermath of the sinking of the Titanic in 1912, the authorities held an inquiry. It included among its recommendations: ‘The provision of lifeboat and raft accommodation on board such ships should be based on the number of persons intended to be carried in the ship and not upon tonnage.’

Hindsight, they say, is a wonderful thing. In situations like that, however, it also becomes a crushing reminder of the frailty of humankind and its capacity for folly, greed and vanity. The Titanic has lessons for us now. Instead of travelling at breakneck speed towards an immovable object, we must change course. And unlike the Titanic, we must do so before it’s too late. Because there can never be enough lifeboats when it comes to our planet, and the nine billion people that it will feed, clothe and house in 2050.

Photo credit: Cliff @ Flickr

This article first appeared in the September/October edition of Spear’s. Buy your copy at your nearest WH Smith travel store or subscribe


The new capitalism: how wealth is changing the world

Interview: Yanis Varoufakis on the end of Europe — and capitalism

‘The sense of injustice is real’ — Nigel Lawson on the dark side of globalisation

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