Political choices for capitalism: beyond left and right

esdm-coverSome more clear words of inspiration about the potential directions for capitalism from institutionalist economist Geoffrey Hodgson:

“Thatcherism was seen by many Marxists as the only rational response by the capitalists to the crises of the 1970s. Hence the viable choices were either Thatcherism or a workers’ revolution to overthrow capitalism.

This view was profoundly anti-institutionalist. An institutionalist would argue that there is no reason to presume that Thatcherism is (or was in Britain at that time) the only viable version of capitalism. There are other versions of capitalism, and these can begin to develop at any point in time. After all, there are manifest  varieties of capitalism throughout the world. The consequence is that we do face very real choices, even within capitalism. We are not confined to these rather narrow political alternatives proposed by many Marxists: either socialist revolution or accept an extreme and exploitative version of capitalism.

In contrast, there is the possibility of a politics that engages with the present more directly. It talks about real, immediate alternatives and opens up areas for discussion. These areas would include, for example, about different kinds of market, different degrees to which the market may operate, different kinds of planning, the role and limits of the state, different planning agencies, a pluralism of structures and agencies operating at the economic level, different types of mixed economy and so on. This debate becomes possible once you escape from the false dichotomy of accepting either the most rapacious version of capitalism or socialist revolution. This dichotomy disables serious discussion and analysis about what is possible in the present.”

Geoffrey M. Hodgson (2006), Economics in the Shadows of Darwin and Marx

Political turmoil and a new Prime Minister. Time for One Nation?

Theresa_May

Theresa May. Image from ukhomeoffice via Wikimedia Commons

A new Prime Minister is on her way, starting tomorrow. This is the latest chapter in the political turmoil that has engulfed the UK since the vote for Brexit a few weeks ago. Theresa May, formerly the Home Secretary, is to become the UK’s second female PM. Now I am not a great supporter of things Tory, at least from the perspective of economic policy, but I was interested to read some excerpts from May’s speech which formally launched her campaign to become the next leader of her party. Of course, this was before the dramatic withdrawal of her only remaining opponent in the contest, Andrea Leadsom.

Some of the details of the speech can be found here. I know that skilled politicians are good at making the right noises to attract voters and ultimately win power. Her bid was to unite her party and the country in the aftermath of Brexit, which will be hard going. But some of the quotes from her speech could have been taken from speeches by Ed Miliband, the former Labour leader. Miliband championed a ‘One Nation’ Labour party, and policies which would aim to promote his centre left, social democratic vision of Britain. Continue reading

Postcapitalism: Paul Mason’s ‘guide to our future’?

MasonCoverI said I would post something on Paul Mason’s thought-provoking book, Postcapitalism – a guide to our future, which has just come out in paperback. It makes a good read, and contains a wealth of ideas from economics, political economy, and futurism, all mixed together in the author’s aim to inspire a progressive transition beyond capitalism, but not to socialism, which he admits has been a huge failure for the left. Instead, he calls his utopian vision ‘postcapitalism’.

Mason starts by describing the current political economic paradigm, neo-liberalism, as having reached its limits with the crisis of 2008 and the subsequent tepid, or in many cases absent, recovery. There has been sluggish output and productivity growth, alongside wage rises for those at the very top of the income distribution but barely any change for the middle and bottom. In fact, these trends were only temporarily overcome by the excessive expansion of credit prior to the crisis which allowed consumption to grow in countries such as the US and UK despite stagnant wages. Continue reading

A Marxist economics editor on tv?

According to the UK’s Independent newspaper, ITV news’ new economics editor, Noreena Hertz, is some sort of Marxist, and this has caused a stir. There is some doubt about this, and she has herself denied it. But is it a problem to be even influenced by Marx in one’s thinking?

The piece linked to above contains some errors. It names economists Joan Robinson and Michal Kalecki, as well as Andrew Glyn, as Marxists. Robinson was influenced by Marx, as well as by Kalecki, but she was critical of the work of the former, and was far more a left-wing (or post) Keynesian. In her work, she favoured a reformed capitalism, somewhere between socialism and the free market, which she hoped would achieve material prosperity and social justice in society.

Kalecki was a major influence on the post-Keynesian tradition, and was again influenced by Marx, while Glyn was perhaps more of a socialist, but even he drew on the work of Kalecki and Keynes in his thinking.

The furore over Hertz’ appointment is whether the influence of Marxism will cloud her reporting, due to its ideology. But in my view, we cannot escape from ideology in social science, and those on both the left and the right should admit it. Continue reading

Left and right, radicals and conservatives, and economic utopias

DSC00234Since beginning my studies in economics more than twenty years ago, my attention has often been drawn to the differences between schools of thought and their various prescriptions for the economic system. Many of them seem to want to achieve some sort of utopia, or idealised society. To this end they have different and conflicting policy proposals for governments in power.

The far left and right often seek an authoritarian solution to economic problems, with forms of socialism and nationalism to the fore, although a democratic socialism is sometimes proposed by those on the left. A far-reaching transformation of society is demanded. This must stem from a deep dissatisfaction with the status quo, which may sometimes be warranted. Continue reading

The rise of Trump and Sanders: inequality and the middle class

BernieSanders

Bernie Sanders

The rise of Donald Trump and Bernie Sanders in the US reflect the same economic and social trends. The two of them seem to be rather different politically, coming from the right and the left respectively. But they both reflect a new populism, drawing on disaffection with political and business elites alongside a failure of the economy to deliver widely shared prosperity. Continue reading

Bernie Sanders: democratic socialist or social democrat?

BernieSanders

Senator Bernie Sanders

The results in yesterday’s Iowa caucus in the US, with the Democrat race between Hilary Clinton and Bernie Sanders virtually neck and neck led me to take a quick look at Sanders’ website. He claims to be a ‘democratic socialist’, which puzzles me.

Socialism is, as far as I am aware, much more of a dirty word in America than in much of Europe, or at least it has been. For sure there are socialists across the pond, but they have seemed to be much more in a minority than over here. Calling yourself a socialist brings an association with anti-capitalism and the history of socialist and communist regimes past and present. Compared with the UK, France, Germany etc, politics and politicians, whether Democrat or Republican, have in recent decades been to the right of their transatlantic contemporaries. Continue reading