How to make a more decent capitalism

Written By: - Date published: 6:45 pm, September 2nd, 2011 - 11 comments
Categories: capitalism, Economy - Tags:

Professor Robert Wade of the London School of Economics and author of the acclaimed Governing the Market will speak on this topic in association with Victoria University School of Government at Lecture Theatre 2, Rutherford House, Wellington at 6pm on Thursday 22nd September. All are welcome to attend this free lecture; if you would like to attend please register here as places may be limited.

He writes in his abstract: “Some may consider “decent capitalism” an oxymoron, like “MIT nightlife” or “LSE sports”. I start from the premise that it makes sense to distinguish “more decent” and “less decent” capitalism. I first give some indicators – relating to income inequality, social mobility, child well-being and mass education – which serve to place European and North American national capitalisms on this scale. Then I suggest what social democrats should be arguing for, in contrast to “taken for granted” standard/mainstream/conservative prescription, in four areas: the role of the state and  markets, the solution to the eurozone crisis (the finger points at German wages); the use of northwest European capitalisms rather than Anglo-American ones for inspiration about decent capitalism; and development strategy in developing countries. Then I briefly discuss the elephant in the room, the possibility of continuous “green growth”.”

Robert Wade is Professor of Political Economy at the London School of Economics. He won the Leontief Prize for Advancing the Frontiers of Economic Thought in 2008, and his book Governing the Market: Economic Theory and the Role of Government in East Asia’s Industrialization (1990, 2004) won the American Political Science Association’s Best Book in Political Economy award.

He was a guest lecturer at the Treasury in 2008; a copy of his speech my be found here. His recent work has dealt with: financial booms and busts; world income distribution; global economic governance (especially the G20, World Bank, IMF and WTO); neoliberal (“Washington Consensus”) policy prescriptions, with particular reference to East Asia, the US and the UK; the fights over environmental norms inside the World Bank; industrial policies; and Iceland. He was a guest lecturer at the NZ Treasury in 2008: a copy of his speech titled “The first world debt crisis and the desirable policy response” may be found here. It is prescient.

He graduated from Otago University and Victoria University in New Zealand, and took a PhD at Sussex University. Subsequent employment at the Institute of Development Studies (Sussex University), the World Bank, the US Congress’ Office of Technology Assessment, Princeton University (Woodrow Wilson School), MIT (Sloan School and Department of Political Science), and Brown University (Political Science and Watson Institute of International Relations). He has taught at LSE since 2001.

11 comments on “How to make a more decent capitalism ”

  • Comments are now closed

  1. randal 1
    2 September 2011 at 8:03 pm

    I am not sure capitalism can be made decent. It exists to exploit resources for the benefit of the few and the misery of the many.

  2. Afewknowthetruth 2
    3 September 2011 at 1:03 am

    The preview indicates it will BS not worth listening to.

    Capitalism is inherently iniquitous and always will be.

    And global capitalism is in its death throes due to resource depletion and the corrupt nature of money, neither of which is even factored into mainstream economics.

    As has been said before, mainstream economics has no principles that can be relied upon from one day to the next because it ignores most of the factors crucial to the functioning of an economy. Therefore economics is by definition dysfuntional BS.

    How one can have a ‘school of economics’ to teach a non-subject full of BS is one of the great mysteries of the modern age.

  3. Campbell Larsen 3
    3 September 2011 at 1:14 pm

    You are too quick to judge AFKTT – Prof Wade is definitely worth a read. If making assumptions based on previews is the kind of diligence that you approach all of your ‘research’ with how can you expect people to take your often repetitive and not particularly original posts seriously?

    • Jim Nald 3.1
      3 September 2011 at 5:03 pm

      Would it be possible for someone to record it on mp3 and then upload it somewhere and have The Standard link to it?

      I can’t be there but would like to listen and judge for myself.

  4. Bill 4
    3 September 2011 at 1:47 pm

    Recent history shows us that attempts to manage the market through legislative prescriptions are subject to roll back.

    And slightly less recent history shows us that attempts to defeat the market by imposing a command economy comes at the cost of political freedoms.

    And you don’t have to be a professor to ‘get that’. In fact, it probably helps if you aren’t one.

    Professors and academics in general, tend towards forms of orthodoxy and will dance on pin heads to explain away contradictory empirical evidence or smother it in fine sounding obfuscations. It’s how they avoid being unrecognised and unsuccesful.

  5. Tiger Mountain 5
    3 September 2011 at 4:16 pm

    The holy grail of social democrats has always been ‘well behaved bosses’. Over a century of experience shows it is not now, or likely ever, going to be a happening thing.

    That is not to negate the importance of reforms during social democratic led governments. Reforms however get rolled back periodically, so it is the ongoing struggle of the people that matters most ultimately.

  6. johnm 6
    3 September 2011 at 5:06 pm

    Decent Capitalism : Plans A, B, C, D As In the U$$$$$$$$$$$$$$$$$$$$$$ also in NZ Currently led by an ex currency speculator from the failed Ponzi scheme outfit Merrill Lynch. Refer link to article by Richard Wolff

    Plan A: You will recall that Plan A entailed a crisis-response program of bailing out the banks, insurance companies, large corporations and stock markets to achieve “recovery”. The theory behind Plan A – we used to call it “trickle-down economics” – was that recovery would spread from financial markets and financiers to everyone else. It never did. So now the same servants of capitalism who imposed Plan A are dishing out Plan B.

    Plan B:Governors Cuomo in New York and Malloy in Connecticut had very similar Plan Bs. They threatened the public employee unions and the people of their states in nearly identical ways. Either the unions accept new contracts with wage freezes and raised contributions to their health insurance plans (and other declines in their basic remuneration) – or the governors would fire tens of thousands of unionized state workers. In Connecticut, the state workers first voted to reject and then re-voted to accept that contract. In New York, the state workers accepted on the first vote.

    Corporations and the rich bankroll the parties and governors who design and impose Plans A and B, while avoiding Plan C.

    ———————————————————————————————-
    Decent Capitalism:

    Plan C:Each governor refused to even consider an obvious alternative Plan C: increasing taxes on corporations and the rich enough to avoid either public service cuts or wage cuts. Instead, each governor snubbed his nose at the public by forcing unions to choose between two awful options.

    Plan D:The best response to capitalism’s crisis, to its failed Plan A and to its unjust Plan B would be a Plan D: to change how we organize productive enterprises in our society. Profits should be distributed by the democratic decision-making of all those who produce and depend on them, the workers and affected communities
    Refer http://www.countercurrents.org and go back to August views and read Wolff’s article.
    I agree with AFKTT this turnbull house talk will be just feel good BS Enjoy!!

  7. lefty 7
    3 September 2011 at 5:45 pm

    If the energy that has been spent trying to make capitalism decent had been used to build socialism we would be there by now.

  8. Afewknowthetruth 8
    4 September 2011 at 9:18 am

    Campbell,

    ‘Abstract
    The current first-world debt crisis is generally said to be rooted in pockets of the US financial system. This essay finds deeper causes in the global financial architecture which has enabled US policy makers to run the economy for the past decade spending 5 to 7 % more than it produces, importing twice as much as it exports. The US has reaped large benefits, including fast growth, low unemployment, and easy financing for US military activities in Iraq and elsewhere, even with tax cuts. The same mechanism has helped to generate fast growth in much of the rest of the world.

    The essay identifies two zones of the world economy – one with substantially fixed exchange rates, linking the US deficit economy with the Asian surplus economies, in a system popularly known as Bretton Woods II; the other with floating exchange rates. The different dynamics of both zones tend to the same result: large and persistent current account deficits and surpluses, which constitute a force for financial instability in the world at large. The essay also finds deeper causes of the crisis in the feedback from political conditions to economic conditions. The feedback suggests a worrying parallel between today and 1929. The last section proposes a number of policy changes at national and multilateral levels designed to reduce the chances of repeat crises, including tighter “capital management techniques”.’

    According to the abstract Wade’s analysis does not even mention the real reasons for the meltdown we are experiencing, i.e. overshoot, resource depletion and declining EROEI..

    I stand by what I wrote.

  9. Campbell Larsen 9
    4 September 2011 at 11:52 am

    AFKTT – He may be working within/ trying to fix a fundamentally flawed system but I think he may be loosely regarded as being ‘on our side’ – even if his prescriptions do not go far enough to satisfy you (or me)

    Robert Wade: Today’s financial caretakers take cue from ancient Rome:

    “Western nations may well be in for a period of sustained turbulence over the next decade, fuelled by income inequality, fiscal austerity, energy uncertainty, the rise of large, super-competitive non-Western states, climate change, and the need for far-reaching respecialisation of Western economies.

    Elites who have made money hand over fist during the good times (the share of US income accruing to the top 1 per cent of the population rose from 9 per cent to more than 22 per cent between 1980 and 2006) may try to impose authoritarian, even fascistic rule to defend their privileges.

    The question is how more generous social movements can counter them.”

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10605721

    I am still interested in what he has to say.