What Capitalism Needs: Forgotten Lessons of Great Economists

Capitalism is in trouble and ill-prepared to cope with the challenges of the coming decades. Sociologists John L. Campbell and John A. Hall trace the historical development of capitalism as a social, political, and economic system throughout the twentieth and early twenty-first centuries, comparing it across eras and around the globe. They argue that capitalism's performance depends on the strength of nation-states, the social cohesion of capitalist societies, and the stability of the international system, which are in short supply today.

Format: Hardback
Length: 1 pages
Publication date: 02 September 2021
Publisher: Cambridge University Press

Capitalism faces numerous challenges in the coming decades, ranging from unemployment to Brexit to climate change. While contemporary economists and policymakers often overlook the political and social dimensions of capitalism, some of the great economists of the past, such as Adam Smith, Friedrich List, John Maynard Keynes, Joseph Schumpeter, Karl Polanyi, and Albert Hirschman, did not make the same mistake. Sociologists John L. Campbell and John A. Hall have traced the historical development of capitalism as a social, political, and economic system throughout the twentieth and early twenty-first centuries. They draw comparisons across eras and around the globe to demonstrate that there is no inevitable logic to capitalism. Instead, capitalism's performance depends on the strength of nation-states, the social cohesion of capitalist societies, and the stability of the international system, all of which are in short supply today.

The rise of capitalism in the late 18th century marked a significant shift in economic and social structures. Prior to this period, feudalism was the dominant system, with land ownership and production controlled by the aristocracy. However, with the Industrial Revolution, new technologies and machines were developed, leading to the growth of factories and the emergence of a new class of industrialists. This shift in power led to the development of capitalism, characterized by private ownership of the means of production and the pursuit of profit.

One of the key features of capitalism is the market economy, which is based on the principle of supply and demand. In a market economy, businesses produce goods and services in response to consumer demand, and prices are determined by the interaction of supply and demand. This system has been successful in promoting economic growth and innovation, but it has also been criticized for its lack of social responsibility and its tendency to create inequality.

Another important aspect of capitalism is the competition between businesses. In a capitalist system, businesses are free to enter and exit the market, and they are motivated by the desire to profit. This competition can lead to increased efficiency and innovation, but it can also create a race to the bottom, where businesses prioritize profits over social and environmental concerns.

Capitalism has also been associated with the development of a consumer culture, where individuals are encouraged to consume as much as possible. This culture is driven by advertising and marketing campaigns that promote the idea that consumption is a way to achieve happiness and success. However, this consumer culture has also been criticized for its environmental impact and its contribution to social inequality.

Despite its many criticisms, capitalism has also been successful in promoting economic growth and innovation. It has provided opportunities for individuals to earn a living and achieve their goals, and it has led to the development of new technologies and industries. However, it is important to recognize that capitalism is not a perfect system, and it requires ongoing regulation and intervention to ensure that it works for the benefit of all.

One of the key challenges facing capitalism today is the issue of inequality. In a capitalist system, wealth and income are often concentrated in the hands of a small number of individuals, while the majority of people struggle to make ends meet. This inequality can lead to social unrest and political instability, and it can also undermine the long-term sustainability of the economy.

Another challenge facing capitalism is the issue of climate change. The burning of fossil fuels and the release of greenhouse gases have contributed to global warming, and this has significant implications for the economy and the environment. Capitalism has been criticized for its contribution to climate change, and it is important for businesses and policymakers to take action to reduce their carbon footprint and promote sustainable development.

In conclusion, capitalism is in trouble and ill-prepared to cope with the challenges of the coming decades. While contemporary economists and policymakers tend to ignore the political and social dimensions of capitalism, some of the great economists of the past recognized the importance of these factors in shaping the economic system. Sociologists have traced the historical development of capitalism as a social, political, and economic system throughout the twentieth and early twenty-first centuries, and they have demonstrated that there is no inevitable logic to capitalism. Capitalism's performance depends on the strength of nation-states, the social cohesion of capitalist societies, and the stability of the international system, all of which are in short supply today. It is important for businesses and policymakers to recognize the challenges facing capitalism and take action to address them. This may include promoting social responsibility, reducing inequality, and promoting sustainable development. By doing so, we can ensure that capitalism continues to be a successful economic system for the benefit of all.

Weight: 510g
Dimension: 223 x 148 x 27 (mm)
ISBN-13: 9781108487825