This is the clearest evidence one can have – if evidence was needed – that capitalism has failed:
Almost two-thirds of people believe the current generation of children will have a lower standard of living than their parents, as concern about the economic crisis hardens into long-term pessimism, a new poll shows.
And I say this because an essential part of capitalism’s dynamics is the belief and confidence its subjects have in the future. Without these two elements, people do not invest; do not battle with the challenges; do not take risks. So it is that capitalism is mortally wounded.
The temptation must be very great – as we are always going to be sons and daughters of previous generations – to do an Iraq on capitalism even as it is on its last legs: bomb it to bits (figuratively speaking, that is) and then wait and see what flowers all on its lonesome.
I would, however, prefer to believe we are capable of avoiding getting involved in such a destructive cycle for the second, third or fourth time in a generation and – instead – learn from such experiences to a wider societal benefit. Two initiatives do make me wonder if other people think the same. First, this rather idiosyncratic presentation (no web-based context – just an almost automatic download of a .pdf file) of how important the concept of business should be to Labour (more context from Next Left to this project can be found here). Its Foreword provides sufficient background thus:
Foreword
Chuka Umunna
I welcome this collection, which brings together
many important contributions to the discussion on the new
economy we seek to create, and crucially the role of enterprise
within it.
Our economy faces huge challenges, both in terms of increased
competition from the emerging economies of Asia and
Latin America, but also the fact that it is not working for enough
people in the way it can and should. Because of the government’s
decision to cut spending and raise taxes too far and too fast, our
recovery was choked off well before the crisis in the Eurozone.
Living standards are being squeezed harder than in living
memory, unemployment is at its highest in seventeen years and
the ‘British promise’ – the understanding that each generation
will benefit from better opportunities than the last – is at risk
of being broken.
But underlying this are deeper, structural problems which
urgently need to be addressed. Since 2003 wages for middle
and lower income earners have stagnated while rewards at the
top have grown exponentially and so for many in our society,
pay has not kept up with the rising cost of living. Growth has
become too dependent on a small number of sectors and too
few regions, making us more vulnerable to external shocks.
We need an economy structured to deliver the jobs and growth
of the future; which is focused on sustainable, long-term success
rather than the fast buck; which enables us to complete globally;
and which creates high-skilled, better paid jobs for our workforce.
In addressing and overcoming these challenges, the role of
enterprise is paramount: we are clear that growth must be private
sector led – so we need more people setting up, leading
and working in businesses. Our record here is strong – in our
thirteen years in government, over a million new businesses
were created and the turnover of small and medium sized enterprises
grew by over a third.
But, as this collection reflects, we need to do more to champion
entrepreneurship: those who go into business, turning their
ideas into reality, generating profit and creating employment
in the process, taking pride in their work providing consumers
with greater choice or even a new product or service. These
are the values Labour represents. We do not underestimate
the capacity for enterprise to act as a motor of aspiration and
social mobility, providing a ladder of opportunity and enabling
people to make the most of their ingenuity and talents. As ever,
we are ambitious for British business.
Where we fundamentally disagree with the government’s
approach is that we see the state playing a crucial role in
creating the conditions in which businesses thrive. Where
they see the best government as that which does the least, we
see the capacity for active, intelligent government acting as a
partner, enabler and friend, setting the rules of the game, with
the capacity to shape and even create markets. For example, the
last Labour government set the target for all new homes to be
carbon neutral by 2016 – this helped create whole new markets
in architecture, retrofitting and green design.
Government has a wide range of tools at its disposal
including regulation, procurement, competition policy and
taxation – and must use these to support business, developing
and driving an ambition for the new economy. This means
ensuring that markets are competitive, encouraging innovation,
working with business to drive success and backing business
approaches which invest in the long term and do right by
employees, customers, country, and communities.
Clearly, this requires change on the part of government. We
cannot ignore the debate going on in the business world about
how productive businesses can add value to the bottom line
in the form of profit and do the same for the communities in
which they are located – businesses and their communities are
after all interdependent.
That is why the contributions in this book are so important,
exploring how enterprise can deliver the better outcomes we
need: spurring a return to growth and creating jobs, as well as
addressing the longstanding challenges which face our economy.
I have no doubt that Labour’s Business will help inform
and shape this debate as we move forward.
Chuka Umunna MP
Shadow Secretary of State for Business, Innovation and Skills
It’s not time to reinvent politics – for politics simply piggybacks on the prejudices and mindsets of business. Politics is the mouthpiece – no longer (was it ever?) the agent.No. We need to go much further that.
It’s now time to reinvent business itself – for only then will we half a chance of rescuing our scalps. The root problem is business – and so the solution must also lie there.
Meanwhile, today in the Observer we find David Miliband spot-on, at least in this phrase I pick out of his thoughtful piece:
[...] The point of politics is not to compromise values. It is to understand dynamic forces in economy and society, and inch forward changes in the reality of life according to your values.
I think I can agree with many of the things I have quoted from in this post – or, at least, I can agree with them if I take an entirely textual approach to their content. If I forget about who has written them and the political baggage they carry along with them – their biography and and their attributed psychology – then, in a sense, the option of valuing with greater equanimity does become possible.
Time to destroy, then, or time to engage? Do we follow Bush Sr or Bush Jr?
I would hope we could be wise. If politics were as it should be, I would be able to say it’d be up to you and me to decide.
But it’s not.
So the question hangs heavily in the air: who will really decide – and, indeed, when? And how will they choose? Will they engage or, alternatively, destroy everything that is before them?
And will they do it for us all – or simply for themselves?
What about China? Capitalism has raised GDP per capita by one and a half orders of magnitude. OK, with a fairly high Gini coefficient, but nevertheless with massive improvements in the life experiences of the average Chinese.
We can't look at the UK in isolation. Without free movement of the factors of production, developing countries are condemned to capitalism. If we experience static GDP per capita, surely this is 'a price worth paying'.
China is a giant capitalist goldfish bowl.
China doesn't need the rest of the world to keep its economy ticking over because it has its very own incredibly cheap workforce (economic slaves).
Capitalism relies on slavery – in the old days Rome used to house, clothe and feed their slaves; nowadays the slaves aren't paid enough for all three basic requirements.
We have economic slaves in europe – Thatcher made sure of that and Cameron and Clegg are making sure that continues so that 'Britain can remain competitive'.
An economy is a thing – a thing that should serve the population that create that economy, not be grateful for any crumbs half a dozen super rich let trickle down from their table feast.
The UK is not in isolation, it is now totally dependent on business required by other countries since 70% of the economy is now service based.
It's ultimately a kind of economic war where the slaves benefit or suffer as the casualties of said war.
What good is a GDP per capita if the standard of living of the 'capita' falls the way it is doing through inflationary pressures, brought about by excessive borrowing and ever ever lower production.
GDP is a business figure that benefits rich stockholders and the other 99.99% of the population 'suffer'.
Hi – thanks to you both for your comments. Yes, it is true – perhaps I *am* looking at capitalism from a UK/Euro-centric view. But I do get the feeling that the much-trumpeted decade of continuous growth we've just emerged from with such potentially awful consequences is entirely as a result of the slavery Stevie mentions – and very little to do with any innate virtues of capitalism itself. The benefits of all this growth lie mainly in those $80 billion cash mountains (and growing) which large companies like Apple have accumulated on the back of this supposed miracle. But I would've thought most people could make money if the equation involves paying the Chinese so very little and charging the Western customers so very much.
Is that a capitalism I'd like to be associated with? Is it, indeed, the only capitalism we can really contemplate? I would hope most people might answer no to the first – whilst to the second, although I'm not qualified to provide a definitive answer, more and more it seems that capitalism reverts unhappily to monopolistic competition.
So as always. No answers. Just more questions.