The latest failures of the capitalist system, the financial crash of 2008 and the subsequent worldwide recession, have led to calls for a rational reassessment, both of its theoretical value and of its practical application. There is rising discontent with what capitalism has offered, compared to the price it extracts in return, and people want to explore new ideas, and new possibilities and alternatives (Skidelsky, 2014).
In the beginning though, capitalism had all of the makings of a radically progressive economic system. As the merchants found resources and traded them, they broke the economic stranglehold held by the traditionally powerful landowning classes. Enterprising individuals could become wealthy, and free themselves from the strictures of social class, while also furthering the erosion of those class boundaries by creating paid work that distributed wealth.
In the beginning though, capitalism had all of the makings of a radically progressive economic system. As the merchants found resources and traded them, they broke the economic stranglehold held by the traditionally powerful landowning classes. Enterprising individuals could become wealthy, and free themselves from the strictures of social class, while also furthering the erosion of those class boundaries by creating paid work that distributed wealth.
Eventually, however, the power of the capitalists broke the power of landowners, and toppled their social order - but only to replace it. Capital has become the foundation of a new establishment, and its interests have become the new guiding motivation for the society that has sprung up around it.
Now, its failures have exposed it to criticism from which it was previously safe. While it continued to improve conditions for people in general, even in just a peripheral way, its excesses and inequalities where excused. But when those benefits cease to be generally seen, discontent swells and questions begin to be asked. Are there other ways we might go? Can we do better?
The call for new ideas
Economics students around the world have led the call for a fresh look at economic theories. They want broader studies of the impacts and flaws of present theories, and the freedom to study new or alternative economic ideas - and with good reason (Skidelsky, 2014). Inequality, failure to predict catastrophic crashes and the subsequent fallout all demand answers.
Andy Haldane, the Bank of England's former Director of Financial Stability, and the present Chief Economist, supported their announcements (Inman, 2014), saying:
"The crisis has laid bare the latent inadequacies of economic models. These models have failed to make sense of the sorts of extreme macro-economic events, such as crises, recessions and depressions, which matter most to society."
But the concerns of students go beyond theoretical and practical accuracy (Husnain & Parekh, 2013). There is also a belief that economics can be about more than exploiting conditions for immediate selfish profit. That the study of economics can be used to increase our knowledge of how systems work in order to develop more effective and more sustainable ways of supporting people, without flaws like massively unequal social stratification.
The Gift Economy
Lily Cole, through her website impossible.com, which promotes a vision of an economy based around gifts and reciprocity (Cole, 2014). Using the internet as a medium, Cole's site allows people to post the things that people need or want, and allows others to answer those needs for free - for nothing other than a thank you.
The idea of a reciprocal economy tie in with certain anthropological views on the role of reciprocity and exchange in human societies (Green, 2014). It seems that, rather than barter, early human social groups completed tasks and exchanged their product with others as needed. These exchanges were conducted on the understanding that, through gratitude and debt, they built trust and social cohesion, leading to those positive actions later being returned in kind.
While our communities are far less personal, and far more widespread, the internet certainly does have the potential to break down those barriers and distances. Lily Cole's approach is none the less, however, still a fairly extreme example and utopian in nature. As an overnight alternative to the capitalist economic orthodoxies, it would be outright revolutionary. In the short and medium term, simply reforming the present systems is the more practical alternative.
The John Lewis Economy
Back in 2012, Nick Clegg announced Liberal Democrat backing for what he called a John Lewis Economy (Clegg, 2012). Clegg vision has workers as stakeholders in a business, with an active shareholding that gives them a tangible investment in the well-being of the organisation. There is a hope that, through these means, the wider economy might benefit from the stability, productivity and long-term sustainability of employee-owned businesses (Ashton, 2012).
And yet, this is only a limited form of co-operative or mutual. Through the offering of a stake, the form of a material benefit, it only offers to include - at arm's length - the workers into the present system without the requirement of a major change in systemic habits. To find a fix for inequality and exploitation, co-operative and mutual models would have go further, and really embrace the right of individuals to autonomy.
In an economy where paid work is essential for survival, it is of the utmost importance that people receive a truly fair portion of the product of their own work. Part of that means protecting autonomy, and the right to an equal say in their working conditions, who their management are and how they behave, and in how the organisation's profits are used.
However, even the level of autonomy offered by co-operative and mutual models fails to address an essential lack of autonomy within mainstream market societies.
A Basic Income
One way of addressing the most fundamental lack of autonomy - the necessity of paid work for survival - is to introduce a Basic Income. At present, out of mainstream UK political parties, only the Green Party is offering the Basic Income as a real possibility (Fearn, 2014). Basic Income, also known as Citizen's Income, represents, within market economies, an expression of a belief in a person's essential right to live - counter to those value systems that demand people earn the liberty to live.
It offers to citizens a universal safety net to guarantee that, no matter their living conditions - working, retired, student, teacher, single parent or 'traditional' family - they will have the ability to support their most basic needs. In principle it eradicates poverty, and raises the baseline standard of living that we have a right to expect up from nothing, to the basic capacity to interact with the world, and to survive it.
Such ideas do however have the tendency of running into ideological barriers.
Economy & Ideology
The primary issue facing reform of capitalism has been ideology. In particular, conservative ideologies have defended the competitive and their segregation of society into 'strivers and skivers' (Coote & Lyall, 2013), with others going further still, to even praise greed (Watt, 2013).
These ideological views have protected capitalism from the attempts of students to study and test new theories, and from the attempts of reformers to change its selfish, greedy and accumulative motivations into more socially constructive attitudes. Economic theorist Thomas Piketty has criticised mainstream economic thought, stressing that rather than being a broken element, inequality is in fact an active feature of capitalism (Piketty, 2014).
Capitalist theories are usually defended against these attacks by pointing to its certain elements - stressing that it is a 'natural' system that replicates efficient 'natural orders', or by stressing the idea that capitalism represents the 'end of history', the end point to which progress has been heading. That capitalism has found the essential elements of society and economics, and that our material pursuits within its framework represent a pure and distilled lifestyle, of which other ideologies are only a distortion.
These are, however, extremely materialist views. A more idealistic perspective might demand a search in a different direction than financial accumulation for a societal focus. In the opinion of Oscar Wilde (1891):
"For the recognition of private property has really harmed Individualism, and obscured it, by confusing a man with what he possesses. It has led Individualism entirely astray. It has made gain not growth its aim. So that man thought that the important thing was to have, and did not know that the important thing is to be. The true perfection of man lies not in what man has, but in what man is. Private property has crushed true Individualism, and set up an Individualism that is false. It has debarred one part of the community from being individual by starving them. It has debarred the other part of the community from being individual by putting them on the wrong road and encumbering them."
Breaking through these barriers to reform is a vast challenge, of which reforming the study of economics is but one aspect. Other reforms will need to follow. Getting there will require understanding how economics works, but also how it can, and how we want and need it, to serve us.
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References:
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+ Phillip Inman's 'Economics students call for shakeup of the way their subject is taught'; in The Guardian; 4 May 2014.
+ Robert Skidelsky's 'Economics faces long needed upheaval as students demand right to dissent'; in The Guardian; 18 June 2014.
+ Mahim Husnain & Rikin Parekh's 'Economics students demand an education that reflects post-crash world'; in The Guardian; 13 November 2013.
+ Lily Cole's 'Lily Cole: welcome to the gift economy, where the kindness of a stranger rules'; in The Guardian; 19 March 2014.
+ John Green's 'Money & Debt'; Crash Course World History 202, on YouTube.com; 17 July 2014.
+ 'Nick Clegg calls for a 'John Lewis economy'' on the BBC; 16 January 2012.
+ James Ashton's 'Nick Clegg set for 'John Lewis' economy'; in The Independent; 28 October 2012.
+ Hannah Fearn's 'How about a 'citizen's income' instead of benefits?'; in The Guardian; 8 April 2014.
For other information on a basic income:
http://www.citizensincome.org/
http://policy.greenparty.org.uk/ec.html
+ Anna Coote and Sarah Lyall's 'Strivers v skivers: real life's not like that at all'; in The Guardian; 11 April 2013.
+ Nicholas Watt's 'Boris Johnson invokes Thatcher spirit with greed is good speech'; in The Guardian; 27 November 2013.
+ Thomas Piketty's 'Capital in the Twenty-First Century'; Harvard University Press; 2014. [Buy Now]
+ Oscar Wilde's 'The Soul of Man under Socialism'; London, 1891.[Buy Now]
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