Book Review: The Future of Capitalism: Facing the New Anxieties by Paul Collier

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Is there is crisis of Capitalism?

What is the future of Capitalism?

Collier wrestles with a tough problem. If you measure by things like GDP growth and lifespan, life is better for more people around the world than it has ever been. And yet many people are questioning the capitalist system that produced those gains.

There is an understandable sense that the system is in crisis.

Paul Collier is one of the world’s most influential development economists. In this personal, passionate and original book, he has taken on the discontent of contemporary high-income western countries.

Collier is unhappy with the direction that societies have taken, especially the western countries.

People have lost their sense of obligation to fellow citizens and place too much emphasis on the individual and on profits.

Collier suggests that widening social divisions, between booming cities and backwaters, between well-paid workers and those who are falling behind, have made individualism and capitalism as we know it unsustainable.

Drawing on extensive research, he suggests several policies, such as representing the public interest on company boards, that might narrow the gaps.

The book is especially interesting on education, covering both preschool and adult learning. Collier concludes that a revived communitarian national identity can counter the trend toward shallow individualism.

Rating

9/10

Thoroughly enjoyed this book. This has to be the best book I have read about what is broken in our current political / economic system and some interesting ideas on how to fix it.

Although I don’t agree with all of Collier’s suggestions, I think he is right more often than not.

Ultimately, I agree with him that “capitalism needs to be managed, not defeated.” We should do more to curb its excesses and minimize its negative aspects.

But no other system comes close to delivering the innovations and economic growth that capitalism has sparked around the world. This is worth remembering as we consider its future.

Favourite Quotes

  • “As we recognize new obligations to others,we build societies better able to flourish; as we neglect them we do the opposite…. To achieve the promise [of prosperity], our sense of mutual regard has to be rebuilt.”
  • “Fortunately, these problems are not inevitable features of capitalism but the results of fixable mistakes of public policy. Public policy has gone wrong because of the trivialization generated by the strident rivalry of antiquated ideologies. The ideology of the right asserts faith in ‘the market’ and denigrates all policy intervention. Its solution is ‘get the government off the back of business: deregulate!’ The ideology of the left denigrates capitalism and condemns the managers of firms and funds as greedy. Its solution is state control of companies, and state ownership of the commanding heights of the economy. Both these fundamentalist ideologies are ill-founded, but between them they have set the terms of public discussion, impeding productive thought. The starting point for a new approach is to recognize that the role of the large corporation in society has never properly been thought through. The boards that run large companies are taking decisions of overarching importance for society. Yet their present structure is the result of individual, unco-ordinated decisions, each of which happened to lead to some further decision that had not been anticipated. The system of corporate governance has lacked any process remotely equivalent to the intense and shrewd public discussion, embodied by the Federalist papers, that produced the American Constitution and its system of national governance. Public policies towards business have been incremental, and so have never properly addressed the fundamental issue of control. Any viable solution must begin with rebalancing the interests in which the power of control is legally vested.”
  • “Encouraging your firm to have a decent sense of purpose is your contribution to society, but continuing to work for one which lacks purpose is personally soul-destroying.”
  • “If state tries to impose a set of values different from those of its citizens it forfeits trust and its authority erodes.”

 

 

 

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