The Future of Capitalism by Paul Collier
I first came across Paul Collier in college. I found his book The Bottom Billion in an Oxford bookstore at a time when I was enamored with solving the poverty of African countries. The book put the issues that many African countries face in a new light, and, if I’m being honest, woke me up from that dream of saving African countries as I realized it would take a lot more than youthful optimism and sheer determination.
Almost a decade later, it is now the United States I’m worried about. I’m worried about the failures of capitalism and the rising interest in socialism. This time, I was in a bookstore in Arizona when I saw that Collier has a new book out, The Future of Capitalism.
From the beginning, Collier recognizes that capitalism has failed many, but it has particularly failed older workers and those trying to find their first job. This has resulted in a sort of collective unconsciousness made up of “anxiety, anger, and despair,” which has fueled the a sort of political extremism that has given the USA Trump, the UK Brexit, and so on. The failure of capitalism has created a rift, or as Collier puts it, a vacuum, that begets populists and ideologues both of which are sustained by anxiety and anger. A line I rather liked on populism and ideology was Collier describing how “Populism offers the headless heart; ideology offers the heartless head.” Put this way, it is no wonder so many feel like the world has gone mad.
While it might seem like our political culture changed overnight, the world we find ourselves can be traced back to the likes of Jeremy Bentham and John Stuart Mill. So what has changed? According to Collier, citizens were stripped of their moral responsibilities and became consumers while the state took on moral responsibility, which has undermined social democracy and has led to the failure of Capitalism. His solution: an intellectual reset; not an overthrow of capitalism but a reform of capitalism. We need ideas that work, not ideas that conform to an ideology.
What I like most about this book is that Collier does not just stay 10,000 feet above the problem. Unlike many commentaries on the state of the world, Collier offers food for thought on where to begin rewiring how we view our role and the state’s role in society. According to Collier, we have lost our shared identity, which has striped us from a sense of obligation to one another and one thing that greatly undermines this is the narrative of a country, which is often set by media. Turn on cable news or log into Twitter and it is not hard to determine that our current narrative is toxic and divisive, on both sides. To be clear, Collier is not calling for a form of Nationalism. In fact, he states that nationalists have hijacked what he calls “the ethical state.”
Collier touches on varies ways we reform capitalism through taxation, company boards, regulations & public interest, education, and even immigration. He addressed productivity and specialization, and the advantages and disadvantages of cluster cities like Silicon Valley. One point I found particularly interesting was Collier’s suggestion that in cities like San Francisco, landlords are taking all the gains from agglomeration, and since it is the accrual and interactions of specialized people that make San Francisco what it is today, that the benefits should be shared. Collier also touches on ‘broken cities’ like Detroit and the need to encourage new clusters to form and he offers creative ways to ease first-mover disadvantage that is not just tax breaks for low-paying jobs. Another suggestion I really liked was how we need to reset the role of universities and education. In short, Collier suggests that schools should not be allowed to take substantive or any fees for degrees in fields that offer limited employment prospects.
The Future of Capitalism is not a long book but it makes up for it with the weight of the ideas presented. More importantly, Collier provides lots of ways a society can begin to reengineer capitalism for the future. It is also helpful how Collier approaches the current state of affairs from more of a philosophical and economical framework. This allows the reader to consume the information with very limited political biases, which strengthens the argument that the future of capitalism is not a political problem, as much as we might be led to believe otherwise.