What is your opinion on anti-capitalists

Anti-capitalism as the new zeitgeist

Guest comment. As the world goes through a dramatic change, capitalism is becoming less and less attractive.

We are witnessing the most dramatic technological and economic change in human history. We are also experiencing that capitalism is becoming less attractive worldwide. Is there a connection between these two trends? And if so, which one?

It is tempting to say that the growing unpopularity of capitalism is simply a symptom of Luddism - the impulse that led artisans in the early stages of the Industrial Revolution to destroy the machines that threatened their jobs.

But this explanation falls short of the complexity of today's anti-capitalist movement, led less by needy workers than by intellectuals and politicians. The current anti-capitalist wave comes at a time when neoliberal free market policies and globalization are being branded almost everywhere. Resistance to neoliberalism originally came from the left, but has since been discovered - perhaps even more energetically and bitterly - by the populist right.

Response to destabilization

After all, there was more than a hint of the anti-capitalist sentiment we know from the interwar period in the 2016 speech by former British Prime Minister Theresa May, who denounced cosmopolitan “world citizens” as “citizens of nowhere”. Or as her successor, the current British Prime Minister Boris Johnson, put it even more succinctly: “Fuck business”.

In the United States, Fox News host Tucker Carlson emulated the pathos of Trump's right in long tirades of rant against capitalism, complaining about "mercenaries who feel no long-term commitment to the people they rule" and the " don't even bother to understand our problems ”.

The new zeitgeist can in part be explained as a predictable response to financial destabilization. Just as monetary conditions after World War I seemed unfair and sparked a violent reaction, the 2008 financial crisis fueled a widespread belief that the system is a game of rigor.

As governments and central banks rescued large financial institutions to prevent a collapse of the entire global financial system and a recurrence of the Great Depression, the millions of people who had lost their homes and jobs were left to fend for themselves.

The financial crisis alone was enough to pave the way for anti-capitalist sentiment. But it also coincided with much broader technological and social change. Innovations like smartphones - the iPhone was introduced in 2007 - and new internet platforms have fundamentally changed the way people communicate and do business with one another.

The new business world is at odds with capitalism in many ways because it is based on opaque payments and asymmetrical or two-sided markets. We now get services by "selling" our personal data. But we are not really aware that we are involved in a market transaction because there is no visible price tag: we pay with our privacy and our personal autonomy.

Zero-sum thinking is fashion

At the same time, zero-sum thinking has become the predominant form of economic analysis. This, too, clearly has its roots in the financial crisis. But it was also promoted by the new information technologies (IT), as network effects play an important role in markets where one wins and the rest goes empty-handed - especially in relation to the platform economy and the development of artificial intelligence (AI).

The more people there are in a network, the more valuable it becomes for each user, and the less space there is for other players in the market.

A famous Avis advertisement from 1962 reads: “When you're only No. two, you try harder ”(“ If you're only number two, you try harder ”). But if you're number two these days, there's no point. One has already lost. In addition, the new IT and AI capitalism has a certain geographic location. It has its roots in the US and China, but the Chinese want to dominate by 2030.

Banks will go away

Capitalism has been synonymous with America since the interwar period. Today, however, it is increasingly associated with China and raises objections from different sources than in the past.

Looking to the future, the radical changes in the world after the financial crisis will continue to unfold, and the IT / AI revolution will change the nature of most economic activity. The banks will disappear, not because they are evil or pose systemic risk, but because they are less efficient than the new alternatives.

Despite all the improvements in electronic communication, banking costs and fees have barely decreased. For many customers in regions with zero or negative interest rates, fees have even increased. At some point in the not too distant future, most banking services are likely to be unbundled and offered individually - and in new and improved ways - through online platforms.

The ingenuity of capitalism lies in its ability to find fundamental answers to many problems of scarcity and resource allocation. Markets tend to reward ideas that prove most useful and punish dysfunctional behavior. Unlike states, they can produce broad-based results by getting countless individuals to adjust their behavior in response to price signals.

We are all asked now

With global warming, there appears to be a need for effective ways to limit greenhouse gas emissions. But even a problem as complex as climate change should not be left to the technocrats. We are all in demand, as citizens and as market participants.

For their part, the proponents of capitalism must figure out how to make the system more inclusive again so that they can regain public support.

Translated from the English by Sandra Pontow
Copyright: Project Syndicate, 2019.

The author

Harold James (* 1956 in Bedford) studied economic history in Cambridge. He has taught history and international politics as a professor at Princeton since 1986 and is a Senior Fellow at the Canadian Center for International Governance Innovation. Numerous publications. His study “The Euro and the battle of ideas” was most recently published in 2016.

Emails to: [email protected]

("Die Presse", print edition, November 26th, 2019)