The Multiple Futures of Capitalism
The Multiple Futures of Capitalism
In our rapidly changing world, the future of our economic system—capitalism—seems more unpredictable than ever. Digitalization is already having a significant impact on the labor market. Intensive globalization has led to the emergence of new forms of capitalism that are very different from the Western free market economies. And contemporary critiques of capitalism present another challenge to our economic system.
This volume looks at capitalism’s future from different perspectives and tries to find possible creative approaches to the current challenges. The aim is not to abandon the current economic system in its entirety, but to look forward constructively and critically and thus to shape the future not only of our economy but of our society as well.
Growth is a very important political goal for governments, since it facilitates reelection and assuages distributive conflict. However, there is no single blueprint for growth, but different “growth models.” Growth models, in turn, rest on “dominant social blocs,” which produce a legitimating discourse, i.e. they are able to present the interests of the bloc as coinciding with the national interest.
Today, in light of technological and social developments, many future forms of market economy are conceivable. Some commentators even envisage complete collapse. It is also possible that capitalism might disappear. What can be established with certainty is that capitalism is in transformation.
Corinne M. Flick
Until the Middle Ages, religious and institutional barriers presented an impediment to the emergence of capitalism by means of a separation between invested and risk capital. Medieval Italian trading companies were a first step towards overcoming these obstacles, while in the Netherlands the development of markets for limited liability share capital created the breakthrough. From the very beginning, capitalist methods of finance have been associated with seafaring and globalization, and equally financial crises have been crises of globalization.
The market-based economic system with private property has brought unprecedented prosperity to very broad strata of the population in Europe. Industry 4.0 (the fourth industrial revolution) might continue this development, however for this to happen society must be open to progress and change. If European societies are not prepared to do so and block these changes, prosperity will be created elsewhere in future.
Kai A. Konrad
The relationship between the market and democracy is ambivalent. Economic and political freedom can be mutually supportive. However, free markets can also undermine the willingness to engage in fair, collective cooperation in the interests of the common good. In principle, economic freedom can also be protected by authoritarian regimes. The only question is whether this can succeed in the long run.
The future of capitalism will largely be defined in the People’s Republic of China. This is not entirely without irony given that the ruling Communist Party is officially committed to Marxism and the “socialist market economy.”
The secret of China’s success is her use of both the “invisible hand” and “visible hand,” forming an organic integration, complementation, and mutual improvement of the functions of the market and the state.
Justin Yifu Lin
Without a political voice, it is hard to imagine that legal certainty can be guaranteed. Equally, a state that the people no longer trust to act in their interests will pay for this with a decline in economic momentum.
Digitalization is accelerating tax competition. The high mobility of intangible assets and the decreasing importance of real investment and labor means that corporation taxes are decreasing while sales taxes are increasing. This calls into question the fundamental ability of tax systems to create equality in society. It remains doubtful whether this trend can be counteracted by stepping up income taxes, property taxes, or inheritance taxes.
Free economic activity as one of the basic requirements of capitalism can only develop if the state provides the conditions that allow an exchange of goods and services, if it ensures a financial market and a functioning banking system, and if legal rights are guaranteed by the state and, if possible, enforced through independent courts. The tax state thus proves to be the ideal state form in which a free-market economy can develop.
Capitalism’s transformation can also be seen in the way that artificial intelligence is making entire professions disappear and cutting off armies of citizens from work and income opportunities. Equally, this is a massive threat to democracy. What may help with regard to this scenario is the unconditional investment in education. Knowledge and education for all must become the universal program of European politics.
Christoph G. Paulus
The element of the abstract, that which is detached from an immediate emotional relationship, was originally a great advance in terms of freedom and an engine of progress. However, the phenomena of our current crisis demonstrate that the old balance between the concrete (community) and the abstract (society) has been lost.
What Adam Smith said right at the beginning about the whole idea of morals is central to his idea of capitalism. It’s not just about the market. It’s about you having the capacity and wanting to think about how other people feel and how possibly you could make them feel better. And maybe that is what is coming, and that is maybe what is going to rescue capitalism.
If we place exclusive reliance on regulations and rules in the fight against corruption, we will simply invite circumvention. What we need is not a culture of compliance but a culture of values. Indeed, we need to have public officials and private actors who do the right thing even though no one is watching.
The brain’s reward mechanism makes us pursue prosperity and accumulate riches. We can see greed for more as a relic of our phylogenetic development and as the burden or blessing of evolution. However, it must be clear to us in all our actions that, in a certain sense, we humans still act using our frog brain and that primitive, neuronal control circuits influence our decisions.
Herbert A. Reitsamer
The involvement of artists at the center of society is extremely interesting when we talk about the future—the future not only of art but of society. Every company, every ministry, every corporation should have an artist-in-residence.
Hans Ulrich Obrist
Growth is not a decision variable, but rather a target variable. It is produced by creativity, mutually beneficial trade, and work—that is through human endeavors. Arbitrary interventions, as demanded by radical growth critics, represent a huge infringement of freedom and could quickly lead to an authoritarian system.
Now a public issue, platform capitalism describes a new digital economic system, namely an enhanced form of capitalism. Capitalism is essentially defined as “private ownership of the means of production.” In the age of platform capitalism, this relationship is in part dissolved: private ownership of information becomes the constituent principle of platform capitalism.
The future of scientific and economic development should more fully reflect their consequences for the political community and for society as a whole. Where do we really want to go?