Making Capitalism Fit for Society
by Colin Crouch
Political scientist Colin Crouch opens his broadside against neo-liberalism and its apologists in ominous style.
"Income inequality in the United States of America has reached such an extreme point that there are fears that it may damage the economy. These views are not just expressed by the 'progressives' who might be expected to have such opinions, but by the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD)," he writes.
Crouch then addresses Europe, which he paints as equally dogged by inequality. There, the power of corporations is spawning ever more problems for consumers, workers and citizens. Worse, the neglect of collective need is causing daunting environmental damage.
Crouch concedes that capitalism has its place - we need it to produce a dynamic, inventive economy. Still, the 2008 financial crisis exposed capitalism's hypocrisy. As the banking bailout proved, capitalism remains dependent on the state to save it from its own inadequacy: the financial elite took handouts to redress their own incompetence.
Crouch attacks the argument used to shield the financial elite, which is that critics like him are envious - clearly, as he says, if the IMF and OECD are alarmed by the breadth of the wealth gap, inequality must be out of hand. We must stop thinking of rampant capitalism as inevitable, he says, highlighting its ugly offshoots: job insecurity and the neglect of the environment and public services.
In his view, which seems wise, we should strike a balance between free-market capitalism and socialism, taking a cue from the world's most successful economies - the likes of Germany, the Netherlands and the Nordic nations. On one hand, those countries embrace the rigours of the market. On the other, with the help of trade unions, they shield citizens from exploitation by the market.
The fruitful tension between free enterprise and the state is in danger of dying, however. The dual-track system can only survive if vital civil groups, including trade unions, rally.
Crouch's previous tracts include the warmly received The Strange Non-death of Neo-liberalism. Alas, as the title of this new book suggests, Crouch has a stodgy professorial style. Although kept to a compact 192 pages, Making Capitalism Fit for Society is more suitable for wonks than the general reader. Crouch's "prospectus" for an assertive, revamped social democracy no longer ruled by rich elites seems vague and cagey, but he clearly identifies some headwinds.
One is the post-financial-crash rise of right-wing xenophobia in countries such as Greece. Another is the decline of Europe's trade unions, fuelled by the spike in the number of temporary workers.
Reversing the rot will be difficult, Crouch admits. Unless society counteracts the trends that he detects, the future could be worse than just purely neo-liberal. "Neo-feudal" might be the right word.