…Capitalism has always had crises, and will go on having them. Rather, it comes from the feeling that Western civilization is increasingly unsatisfying, saddled with a system of incentives that are essential for accumulating wealth, but that undermine our capacity to enjoy it. Capitalism may be close to exhausting its potential to create a better life – at least in the world’s rich countries.
By “better,” I mean better ethically, not materially. Material gains may continue, though evidence shows that they no longer make people happier. My discontent is with the quality of a civilization in which the production and consumption of unnecessary goods has become most people’s main occupation.
This is not to denigrate capitalism. It was, and is, a superb system for overcoming scarcity. By organising production efficiently, and directing it to the pursuit of welfare rather than power, it has lifted a large part of the world out of poverty.
Yet what happens to such a system when scarcity has been turned to plenty? Does it just go on producing more of the same, stimulating jaded appetites with new gadgets, thrills, and excitements? How much longer can this continue? Do we spend the next century wallowing in triviality?
Skidelsky said his thoughts weren’t necessarily prompted by the current crisis, but it’s worth thinking about the times: the crisis is general over the western world, whether we’re talking about the quality-of-life-oriented precincts of Europe or the relatively-capitalist U.S. Everyone’s got problems, big ones.
And while Skidelsky might protest that Europe is being measured by hyper-capitalist standards, it’s not: the machine has to go on somehow, and if it’s stopped by debt, it doesn’t work. The thoughts that Europe might have to abandon the Euro aren’t idle and have very serious consequences if pursued. And the only real way to avoid being crushed by debt is to grow out of your problems, which implies an appreciation of many of the virtues that Skidelsky thinks capitalism has.
The other problem is that while Skidelsky seems to think the west is approaching an end to economic history, there are broad swaths of the world that would still benefit from capitalism’s ability to make do with scarcity. Perhaps Skidelsky prefers a world that’s half-socialist and half-capitalist, but what would that do for the capitalist parts? Would they grow?
Unfortunately, it’s a short essay, but one that’s too interesting to be so short. (For example, Skidelsky has the somewhat-Marxist suggestion at the end that “Perhaps socialism was not an alternative to capitalism, but its heir.”) Oh well—worth thinking about.