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Making Capitalism Fit For Society, by Colin Crouch
Download PDF Making Capitalism Fit For Society, by Colin Crouch
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Capitalism is the only complex system known to us that can provide an efficient and innovative economy, but the financial crisis has brought out the pernicious side of capitalism and shown that it remains dependent on the state to rescue it from its own deficiencies. Can capitalism be reshaped so that it is fit for society, or must we acquiesce to the neoliberal view that society will be at its best when markets are given free rein in all areas of life?
The aim of this book is to show that the acceptance of capitalism and the market does not require us to accept the full neoliberal agenda of unrestrained markets, insecurity in our working lives, and neglect of the environment and of public services. In particular, it should not mean supporting the growing dominance of public life by corporate wealth. The world’s most successful mature economies are those that fully embrace both the discipline of the market and the need for protection against its negative outcomes. Indeed, a continuing, unresolved clash between these two forces is itself a major source of vitality and innovation for economy and society. But maintenance of that tension depends on the enduring strength of trade unions and other critical groups in civil society - a strength that is threatened by neoliberalism’s increasingly intolerant onward march.
Outlining the principles for a renewed and more assertive social democracy, this timely and important book shows that real possibilities exist to create a better world than that which is being offered by the wealthy elites who dominate our public and private lives.
- Sales Rank: #1597794 in Books
- Published on: 2013-10-07
- Original language: English
- Number of items: 1
- Dimensions: 8.50" h x .72" w x 5.50" l, .60 pounds
- Binding: Paperback
- 216 pages
Review
"Crouch has offered another powerful contribution to the debate about the choices that we face."
LSE Review of Books
''A new book explains why attempts by western countries to 'ring fence' themselves against immigration are failing''
John Moore, Morning Star
"A lively argument, sometimes sour, sometimes hopeful, but always backed up by telling facts on the future of capitalist society."
Richard Sennett, London School of Economics
"Faced by a dominant neo-liberal ideology and stripped of a historic agent, social democracy needs to transform itself. Colin Crouch is unique in his ability to dissect the dilemmas and suggest positive strategies. Making Capitalism Fit For Society is the best book so far for anyone wanting to start the journey of renewal."
Neal Lawson, Chair of Compass
"A very good book with many thoughts for a more social policy in Europe"
CLR
About the Author
Colin Crouch is Professor Emeritus at the University of Warwick, and the External Scientific member of the Max-Planck-Institute for Social Research at Cologne.
Most helpful customer reviews
4 of 4 people found the following review helpful.
Making the case for social democracy
By Jonathan Gifford
The central argument of Making Capitalism Fit for Society is that it is time for social democracy to promote its benefits more assertively in the face of what Crouch sees as the growing ascendancy of free-market neoliberalism.
Crouch has some interesting things to say about neoliberalism, the most interesting of which is that the reality of neoliberal politics (I think we can take it that Crouch has the USA particularly in mind) is not, actually, neo-liberalism.
Crouch identifies three kinds of neoliberalism. The first,'pure' neo-liberalism, seeks to establish perfect markets in all areas of life; the role of the state is limited but important, focussing on protecting property rights and ensuring that there is genuine competition in the markets which increasingly are relied on to deliver all of society's needs. The second form accepts that market forces in their pure form are not appropriate for delivering certain public goods or for dealing with 'externalities'(the unintended by-products of free market behaviour, such as pollution, for which the unregulated polluter may not pay the full 'social' cost). The third form is what, Crouch argues, currently passes for 'neoliberalism' in practice, but is in fact a kind of plutocracy, because huge amounts of wealth and power have been accrued by large corporations and a few individuals, the effect of which is to create 'a politicized economy very remote from what economists understand by a neoliberal economy.'
'Once it engages in politics,' Crouch argues a little later in the book, 'neoliberal economics loses its innocence.'
His argument against the ability of markets to run every aspect of our lives are, essentially and familiarly, that there is seldom sufficient competition or information to create the conditions necessary for a perfect market and, as mentioned earlier, that markets are bad at delivering public goods and at dealing with negative externalities.
Crouch is interesting on the subject of the growing tendency to outsource public services to private companies, by way of example. In fact, he argues, very few organisations are involved in tendering for these services, and the main field of expertise of the successful companies is their knowledge of how to win government contracts. Such contracts then typically run for a substantial period of time, since it would be disruptive to change providers too often. The result is an effective monopoly, and there is an inevitable tendency to re-appoint the established incumbent when the contract is up for renewal. Not very 'free market' at all, then. Private contractors are more able to pay very low wages than the state, for which this is politically difficult, allowing proponents to argue that the outsourcing has lowered costs to the benefit of the public. But the state often ends up subsidising these low wages through tax credits and other subsidies paid for by the tax payer. It is uncertain, argues Crouch, that such outsourced services are genuinely more cost-efficient than a state-run service.
Crouch is, of course, on especially strong ground when discussing the effects of limited or absent regulation on financial markets. We've all seen where that led, and we've all helped to pick up the tab for the bankers who made themselves extremely rich by taking excessive risks, threatening the global economy and requiring a publically funded bail-out. I also liked Crouch's highlighting of the fact that the conditions imposed by the European Union, the IMF and the OECD when bailing out failed economies - such as Greece - tend to insist on the kind of unregulated, free labour markets that do not actually exist in reality in other, non-failed economies.
Crouch suggests that neoliberalism is a 'one size fits all' solution, based in essence on the role of corporations and the maximisation of shareholder value, whereas social democracy can embrace and encourage a far healthier variety of solutions: mutualism, cooperatives and the funding of enterprises by (ideally small) banks rather than by the stock market, a form of funding that was common when the industrial revolution was catching hold in nineteenth-century Britain.
Crouch's philosophy is summed up by his call for 'widespread use of markets where possible and useful, but a willingness to check, regulate and offset their effects where they threaten to destroy some widely shared goals and values.' It hard to argue with that (unless, of course, you are a neoliberal of the first kind).
It is a little ironic that Crouch himself acknowledges that social democrats can be seen as fitting into the category of 'neoliberalism of the second kind', which leaves one wondering whether we are indeed 'all neoliberals now' after all, in which case Crouch's argument for the desperate need for `assertive social democracy' would seem a little Quixotic: social democracy is alive and well, and disguised as a form of neoliberalism. And I suspect, in fact, that many neoliberals (especially 'neoliberals of the third kind') would argue that we are, in fact (and unhappily so, as they would see it) actually 'all social democrats now.'
The book is not an easy read - not in the sense that the concepts are difficult to grasp, but in the sense that Crouch, perhaps inevitably, does tend to assume that the reader is just as enthralled by the detail of the argument as he himself is, and his writing style tends towards the academic. I did find my mind wandering on several occasions - to such interesting topics as `those windows are a bit dirty; I really should give them a good clean.'
Crouch is a heavyweight sociologist and political scientist, and this book will make an important contribution to the debate which will be mainly held, one imagines, between political scientists, economists, policy makers and people made of sterner political stuff than I.
One final comment: Crouch does tend to write about 'us' and 'them'; he implies that 'people' need to be defended, not just against unfettered market forces, but against business in general, which is implied to be rapacious, immoral and untrustworthy. It is not impossible to hope that corporations - which are led, managed and staffed by 'us' - will, as seems to be happening, become increasingly conscious of their social obligations and even a force for good. Crouch does talk about other, better forms of organisational structure, but it seems a little old-fashioned to argue that the classic shareholder-owned corporation is, in effect, inherently malicious. To give an example of Crouch's apparent stance: 'Of course general product advertising does much to give giant corporations a popular friendly image that they would not enjoy if the public saw them just as vast accumulations of wealth and power.'
3 of 4 people found the following review helpful.
Let Markets Work For Us
By Diziet
Colin Crouch's new book follows on from his previous Post-Democracy and The Strange Non-death of Neo-liberalism. The latter, in particular, analysed how Neoliberalism has managed to survive, indeed thrive, even in these times of financial crisis. It went on to propose how a defence could be mounted against the privations of this all-conquering 'One True Faith' but, as he acknowledges at the start of this book, his proposals lacked any real concrete agenda, relying on a rather nebulous 'civil society'. In this volume, not only does Professor Crouch strengthen and deepen his analysis of the global dominance of Neoliberalism, he also comes up with a much clearer set of pathways and objectives to finding a way between the Scylla and Charybdis of actually existing (and failed) state socialism and the total corporate dominance of the global agenda.
To start with, Professor Crouch identifies three forms of Neoliberalism. These are:
'...[P]ure neoliberals, who believe that society will be at its best when the conditions of perfect markets can be achieved in all areas of life...This does not imply a weak state; it is strong in protecting property rights, extending the role of markets to ever further areas and guaranteeing competition.' (P23-4)
'...[T]hose who, while accepting the value and priority of markets in the economy, are aware of their limitations and deficiencies, in particular their inability to cope with externalities and public goods. They also believe that the market is not appropriate in some areas of life and wish to protect these from it.' (P24)
'...'actually existing' neoliberalism, which refers to the amalgam of corporate lobbying of governments and the deployment of corporate and other private wealth in politics that today usually accompanies introduction of the neoliberal agenda.' (P24)
The first sounds to me very much like classic Austrian or Hayekian neoliberalism.
The second, while accepting the basic tenets of Neoliberalism, see its almost viral-like spread as essentially corruptive - Michael Sandel's 'What Money Can't Buy: The Moral Limits of Markets' springs very much to mind, especially with its emphasis on 'moral limits'.
The third is, as Professor Crouch states, pretty much what we have got. It is perhaps at its most overt in the US (see, for example, Thomas Frank's excellent discussion of the power of corporate lobbyists in Washington. A current example would be the debacle over the 'Affordable Care Act', opposition to which has been largely funded by the Koch brothers).
Professor Crouch takes the second position. A free market is the best way yet devised to avoid the pitfalls of an over-arching and all-powerful state. However, an all-conquering free market almost by definition leads to the loss of competition, the emergence of cartels and (along with globalisation) corporatocracy, oligarchy, kleptocracy etc. It is only the development of a strong social democratic movement that can balance the demands of individual and corporate 'freedom'.
Clearly, this approach risks being seen as a 'middle way', New Labour's 'Third Way', as compromise, as essentially defensive. But Professor Crouch strongly rejects this defensive posture, instead developing his ideas into what he terms an 'assertive social democracy' - asserting the rights of those who work within, and who may fall victim to, a rigorous utilitarian free market (and its guiding 'invisible hand') and a burgeoning and manipulative corporate transnational Neoliberalism.
This is an almost wholly convincing approach. Somehow, he largely manages to avoid the vaguely religious/spiritual proselytising of writers such as Roberto Unger, the Skidelskys and Jeffrey Sachs in favour of a reformulation of social democracy as 'The Highest Form of Liberalism' (P134). He can, like Guy Standing, actually call for greater commoditisation as a way of getting employers to pay a true and fair price for labour, by putting a price on the negative externalities caused by industry and by enforcing the 'rules of the game'. But Professor Crouch does not following Standing in proposing a 'basic income', preferring instead the flawed but still suggestive 'flexicurity' systems developed in Denmark and the Netherlands - providing a high degree of income security and opportunities for personal development (training etc.) as a counter-balance to the employment 'flexibility' (read 'hire and fire') demanded by a fast-moving global free market. This does sound a bit like Roberto Unger's view that the European left:
'...has retreated to the last ditch defence of a high level of social entitlements giving up one by one many of its most distinctive traits, both good and bad. The ideologists of this retreat have tried to disguise it as a synthesis between European-style social protection and American-style economic flexibility.' (P172)
But Professor Crouch, by emphasising the 'assertive' nature of his social democratic model (and its roots in the very neoliberalism it proposes to both sustain and ameliorate) avoids, to my mind, both Unger's critique and the critique levelled at Unger by Zizek, in that Crouch is not denying the 'underlying Real of capitalism' but is seeking a way to couple this Real with the Real of the human social animal. As an aside, it has been pointed out by many that so much of the supposed inventiveness and innovation of the free market is based on the 'pure' research carried out, or at least paid for, by governments - the Internet, the World Wide Web, discovery of DNA, many pharmaceutical breakthroughs, IT and advances in microchips etc. etc. etc.
There are many, many dangers ahead. The current crisis is giving rise not just to greater pressure from corporate lobbyists, but to xenophobic and racist right-wing movements, from the Golden Dawn party in Greece, to the apparently more socially and politically acceptable face of UKIP in the U.K. Professor Crouch suggests that, in the case of these right-wing parties:
'...neoliberalism wants unfettered global markets; if mass populations are engaged in mutual suspicion and intolerance, they are also unlikely to accept the transnational regimes that are the only institutions that might regulate these markets.' (P4)
Apart from reading virtually like a definition of UKIP, this also points out the crucial importance of transnational organisations in the development of a new 'assertive social democracy'. As Professor Crouch later suggests, in relation to the EU:
'The most straightforward means of democratizing the EU and encouraging parties and governments to work constructively would be a formally very simple rule that said that the Commission should be elected by the European Parliament and not nominated by member states. That would transform the Commission into being a government of Europe and would lead parties of all kinds to develop serious cross-national programmes and to take elections seriously.' (P187)
Professor Crouch knows perfectly well that this is not going to happen as the national governments are not going to give up their power to appoint commissioners, but, as he suggests, it is important to 'place the simple proposal on the agenda, as without that it will never even be debated.' (P187)
This short book is packed with ideas, with practical proposals, with clear insights and with a degree of theoretical underpinning which, although I do not agree with 100% (being a bit of an old Marxist), I am sufficiently a 'left libertarian' (whatever that is) to feel a huge amount of sympathy with. O.k. people - this is What Needs To Be Done - let's get on with it.
1 of 1 people found the following review helpful.
Interesting Work on the Future of Capitalism
By A Customer
Crouch's "Making Capitalism Fit for Society" raises many concerns about the future of capitalism, especially the potential for it to devolve into an oligarchy or even a corporatist state. The concerns are laid out, but the answers are less clear here.
The type of book that puts an issue on people's agendas.
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