AudioCast: Juliet Samuel investigates western capitalism’s crisis with economists and thinkers
Our second major podcast is now available. Presented by Juliet Samuel of The Daily Telegraph and produced by Sean Glynn, it looks at the current discontents swirling around the western model of capitalism. The cast of contributors include our own regular columnists, Victoria Bateman and Liam Halligan and the author of the essay that launched our series on the economic system’s unpopularity, Ruth Davidson, leader of the Scottish Conservatives. Other interviewees include Paul Mason and Ann Pettifor – from what might be called the capitalist-sceptic end of the spectrum; and, balancing them, economic historian Niall Ferguson and Simon Wolfson, the CEO of UK high street retailer, Next.
Here are the big observations that I took from the podcast:
- That ‘end of history’ thing? History is still going: It seems a long time ago that a politician like Tony Blair would proudly say that government cannot protect people from the ups and downs of the global trading system but his words – with which the podcast begins – and his call for all people to be prepared to embrace constant change feel like much more than a decade ago.
- Helping capitalism’s casualties: Ruth Davidson readily acknowledges that capitalism has lifted hundreds of millions of people out of poverty in recent decades but for too many people in advanced nations the chances of owning their own home, of being as well off as their parents or enjoying job security all seem to be in retreat (see YouGov’s transatlantic polling for UnHerd). While inequality is down across the planet as a whole it has worsened in many advanced nations and – argues Victoria Bateman – not enough has been done by governments to help the victims of the ‘two Ts’ (trade and technology) to adjust. More investment, she says, should have been made in retraining and in helping people set up new businesses so that they can be part of the change – rather than be the victims of economic change.
- We need more regulation: According to economist Ann Pettifor, the ‘neoliberal’ era taught us that finance capitalism is a terrible master and that it must be tamed by government regulators – or democracy itself will wither.
- We DON’T need more regulation: Niall Ferguson takes a different position. Arguing that Donald Trump campaigned more against globalisation – including outsourcing, immigration and free trade (see Henry Olsen today on Steve Bannon’s message) – than against capitalism as an economic system, he also worries that we might be learning the wrong lessons from the crisis. The banks who caused so much financial destruction ten years ago were actually heavily-regulated and even more regulation – if it’s of a similar nature – could make matters worse – especially if it distorts behaviour and gives false comfort and security to consumers, investors and other counterparties.
- The stagnant wages problem: Paul Mason, author and former broadcaster, also argues for radical change. Claiming that low wages are a feature rather than a bug of global capitalism he recommends stronger union movements and investment in high skill workforces. Pettifor agrees; pointing to inadequate investment as the key reason why wages and productivity are low. When financial institutions can make more money from investing in property and a new factory, they will continue to “buy flats in London”.
- The rigged housing market: There is strong agreement that the property market – especially in Britain is a huge problem – and probably isn’t a ‘market’ at all. Citing a report by the House of Lords, Liam Halligan likens the development industry to a “cartel” which has every incentive to restrain supply in order to maintain high house prices. When fewer and fewer Britons owning their own homes, don’t be surprised – he says – if people without any capital turn away from capital-ism.
- Cronyism among the elites: Liam then goes to the heart of UnHerd’s critique of western capitalism as currently configured. The political class are simply too close to housing developers, bankers and other commercial interests – meaning that we have crony capitalism rather than a free market capitalism that is adequately open to new businesses and innovators. Future historians will be harsh judges of the cosy relations between political and economic powers during this period in British history, he claims.
- Complacency among the elites: Mason says the elites are not only cronyist but “clearly don’t know what they’re doing”. He says change that is as radical as that which characterised the Thatcher years will be necessary – although, disarmingly adds, he’s not sure if such upheaval will deliver but that it has to be tried. He distinguishes between the 5 to 10 year challenges associated with contemporary market failures and the much greater disruptions over the next 30 to 50 years that will be associated with Artificial Intelligence and mass robotics.
- Not just market failure but State failure, too: For Ferguson there’s also a need to fix the State. Noting how literacy, numeracy and even public health (on some measures) are regressing he says the State is no longer doing its key jobs – which, in her conclusion, Juliet Samuel identifies as (i) ensuring vested interests do not become monopolistic and (ii) investing in a highly educated workforce.
- There might not be an alternative but voters are increasingly open to seek one: Simon Wolfson warns that the alternatives to capitalism, including today’s Exhibit A of Venezuela are no solution. But, concludes Juliet, if friends of capitalism do not address flat wages, declining towns (such as Blackpool in North West England which is featured prominently in the podcast) and unaffordable housing, they’ll hand the keys of power to the system’s enemies. It’s “reform or revolution”.
These few bullet points are only a brief summary of the 40 minute recording – do listen when you can for all of the colour, detail and context that Juliet, Sean and their guests provide. And please do subscribe to our podcast on iTunes or through whatever system you use. We go weekly from next month.
> And here’s our first podcast – on the cultural impact of our 24/7 breaking news culture