The Future of Capitalism: Facing the New Anxieties

by Paul Collier

From world-renowned economist Paul Collier, a candid diagnosis of the failures of capitalism and a pragmatic and realistic vision for how we can repair it. Deep new rifts are tearing apart the fabric of the United States and other Western thriving cities versus rural counties, the highly skilled elite versus the less educated, wealthy versus developing countries. As these divides deepen, we have lost the sense of ethical obligation to others that was crucial to the rise of post-war social democracy. So far these rifts have been answered only by the revivalist ideologies of populism and socialism, leading to the seismic upheavals of Trump, Brexit, and the return of the far-right in Germany. We have heard many critiques of capitalism but no one has laid out a realistic way to fix it, until now. In a passionate and polemical book, celebrated economist Paul Collier outlines brilliantly original and ethical ways of healing these rifts--economic, social and cultural--with the cool head of pragmatism, rather than the fervor of ideological revivalism. He reveals how he has personally lived across these three divides, moving from working-class Sheffield to hyper-competitive Oxford, and working between Britain and Africa, and acknowledges some of the failings of his profession. Drawing on his own solutions as well as ideas from some of the world's most distinguished social scientists, he shows us how to save capitalism from itself--and free ourselves from the intellectual baggage of the twentieth century.

Genres: Economics, Nonfiction, Politics, Business, History, Finance, Society

231 pages, Paperback

First published December 4, 2018

About the author

Paul Collier, CBE is a Professor of Economics, Director for the Centre for the Study of African Economies at the University of Oxford and Fellow of St Antony's College. He is the author of The Plundered Planet; Wars, Guns, and Votes; and The Bottom Billion, winner of Estoril Distinguished Book Prize, the Arthur Ross Book Award, and the Lionel Gelber Prize.

Reviews

[Bill Gates · Rating 4 out of 5]

I’m a big fan of Paul Collier. A highly respected Oxford economist (and a knight!), he has spent his career trying to understand and alleviate global poverty. His book The Bottom Billion is still on the short list of books that I recommend to people, even though a lot has changed since it was published 12 years ago.

So I was a little surprised when I learned that Collier’s latest book isn’t about poverty at all. But when I saw that it was about something I’m also keenly interested in—the polarization we’re seeing in the U.S., Europe, and other places—I was eager to see what he had to say. I’m glad I did. The Future of Capitalism: Facing the New Anxieties, is an ambitious and thought-provoking book.

Collier wrestles with a tough problem. If you measure by things like GDP growth and lifespan, life is better for more people around the world than it has ever been. And yet many people are questioning the capitalist system that produced those gains. There’s an understandable sense that the system is in crisis.

Why is this happening? Collier says we’re experiencing three big rifts: 1) a spatial divide between booming cities and struggling small towns; 2) a class divide between people who have a college education and those who don’t; and 3) a global divide between high- and middle-income countries on the one hand, and fragile states on the other.

Collier has a personal perspective on all three divides. He grew up in industrial Sheffield, England; now he makes his home in an upscale college town. Both of his parents left school when they were 12; he went to Oxford. He lives in a rich country, but because of his work, he spends a lot of time in some of the poorest places in the world.

As a result of the three trends, Collier says, capitalism is delivering for some people but leaving others behind. For example, he makes a point that should feel familiar to anyone living in London, New York City, or my hometown of Seattle. Highly skilled workers have a big incentive to move to cities, where they can get high-paying jobs. When all those big earners cluster in one place, more businesses sprout up to support them. This large-scale movement into the city drives up the cost of land, making it less affordable for everyone else. It is a virtuous cycle for a lucky few and a vicious one for others.

This all adds up to a compelling description of the problem. What should we do about it?

I found myself agreeing with a lot of what Collier has to say. I was especially struck by the central idea of his book, that we need to strengthen the reciprocal obligations we have to each other. This won’t directly address the divides, but it will create the atmosphere where we can talk more about pragmatic solutions to them. “As we recognize new obligations to others,” Collier writes, “we build societies better able to flourish; as we neglect them we do the opposite…. To achieve the promise [of prosperity], our sense of mutual regard has to be rebuilt.”

He looks at four areas where we can do this: the global level, the nation-state, the company, and the family. Globally, for example, he argues that we need to revitalize groups like NATO and the EU while also recognizing the need to help the world’s poorest people escape poverty (an area that is of special interest to me given the Gates Foundation’s work).

At the corporate level, Collier criticizes the notion that a company’s only responsibility is to make money for its shareholders. This sole focus on the bottom line, he argues, means many companies no longer feel responsible to their employees or the communities where they operate. This has been a big driver, he says, of “the mass contempt in which capitalism is held—as greedy, selfish, corrupt.”

I agree that companies need to take a long-run view of their interests and not just focus on short-term profits. It matters how businesses are viewed in their communities and by their employees. I think the profit motive encourages companies to take such a broad view of their interests more often than Collier acknowledges, although there are plenty of exceptions. And when we want companies to act a certain way—for example to reduce pollution or pay a certain amount of taxes—I think it’s more effective to have the government pass laws than to expect them to voluntarily change their behavior.

If I had the chance, I would ask Collier more about this. I finished the book wondering if he thinks we can change the incentive structure so companies act differently. Or perhaps some companies don’t realize that their long-term interests require valuing things other than the bottom line. It would be fascinating to discuss with him.

I would also take Collier’s world/nation/company/family argument one step further. I would add a fifth category: community. We need to re-connect at the local level, where we’re physically close enough to help each other out in times of need. Churches can serve this purpose. So can community groups. Digital tools have also helped people connect with their neighbors, though I think there’s still more that could be done there.

With a complex subject like this, it is always easier to describe the problem than to solve it. The Future of Capitalism devotes a lot of time to how we might ease people’s anxieties, including more vocational training, support for families (what he calls “social maternalism”), and policies designed to make companies behave more ethically.

Although I don’t agree with all of Collier’s suggestions, I think he is right more often than not. Melinda and I will have more to say about inequity in our next Goalkeepers report in September. But to take just one example, I think the U.S. government needs more revenue to meet its commitments, and that means raising taxes on the wealthiest. Similarly, Collier makes a good case for raising taxes on the unearned income of high-wage workers in cities (like when the value of their land goes up simply because they can afford to live in a place where other well-off people want to live).

Ultimately, I agree with him that “capitalism needs to be managed, not defeated.” We should do more to curb its excesses and minimize its negative aspects. But no other system comes close to delivering the innovations and economic growth that capitalism has sparked around the world. This is worth remembering as we consider its future.

[Justus · Rating 2 out of 5]

I found this to be a pretty terrible book. It has the kernel of some good -- or at least interesting -- ideas but it does such a poor job of putting forward arguments in favor of its suggestions that I end up feeling like I wasted my time reading this. It doesn't help that few of his suggestions seem practical and the few times he addresses practicality he throws up his hands.

It also veers off into tangents that seem totally unrelated to "The Future of Capitalism". When you discover that the genesis of the book was an essay on the 'state of society' (and not capitalism) per se, these tangents make a bit more sense. But writing a book about the "the future of society" seems so absurdly over-broad (which society? US society? UK society? European societies? All societies in the world?) that any attempt is bound to be unsatisfying.

It is also a tale of two books, where the first half and the second half feel like totally different books that were glued together.

In the first half, Collier puts forward the intriguing thesis that the fundamental problem in capitalism/society today is the destruction of "community". His strawman argument (and he abuses strawmen, more of this later) is that the left destroyed community in favor of The State and the right destroyed community in favor of hyper-individualism. And this shift by both of ends of the political spectrum has wreaked havok with the traditional notion that rights come with responsibilities. Now everyone (for different reasons) has rights with no responsibilities.

And so the first half of his book is an attempt to restore "ethics" via a rebirth of community and shared identity. It is an interesting idea but the primary flaw of the book soon becomes apparent: Collier never really grapples with the hard problems of any of his suggestions. How do we build a "shared identity" in the modern world? He acknowledges that nationalism has an ugly history, so that's not the way forward. But what is?

He makes the claim -- hard to believe -- that "in many societies, traditional national identity was genuinely inclusive of everyone in the society". Many people will see a claim like that and wonder if the author is completely detached from the reality of late 20th century. Indians in London in 1960 felt "genuinely included"? Gays in 1950 Manchester felt "genuinely included"? Blacks in 1960 Birmingham felt genuinely included? Latinos in 1960 California farms felt "genuinely included"? It is hard to square this obvious reality with Collier's position.

And because he doesn't seem to understand this diversity and the reasons for the many strains of anger over the past ~50 years among these kinds of groups, his calls for a shared identity come without any workable approach. How do we build a shared identity in the modern world without re-creating a monoculture?

Ultimately Collier calls for patriotism, not nationalism; "In contrast to nationalism, patriotism is not aggressive." But how does someone actually create patriotism, especially in places like Sudan or Papua New Guinea. Collier makes it sound like a trivial task but, for instance, Francis Fukuyama recent two-volume set on "The Origins of Political Order" and "Political Order and Political Decay" is 1,300 pages showing how hard -- borderline impossible -- this task is.

Ironically, during the entire book -- despite his focus on shared identity -- Collier never refers to himself as British or a UK citizen. Instead he constantly thinks of himself as a Yorkshireman (despite not having lived there in decades). So it feels like even a product of the golden 1950s-1970s failed to be instilled with a sense of true nationalism and instead kept the tribalism of his childhood.

In the second half of the book, Collier embarks on a scattershot of policy suggestions, many of which seem unrelated to "the future of capitalism". He holds a personal animus for the system of foster care & adoptions, simply because he personally experienced it. I dare anyone to show a relationship between that and "the future of capitalism". Likewise, there's a long section on how to provide better support for teen parents.

In this section, the arguments become even thinner on the ground and less likely to convince anyone. Here are my two favorite examples of this weakness:

He talks about the problems of de-facto social, cultural, and racial segregation in schools due to the fact that schools get their students from a certain geographic area and nowadays we see increased self-sorting. (A theme that Tyler Cowen talks about in more depth in his book The Great Stagnation.) He suggests the solution is to change the catchment area of school -- base them on purpose (perhaps a school for arts, a school for engineers, etc) rather than geography. Then he admits he tried this in his own home town of Oxford and it failed miserably due to popular backlash. He lamely concludes, "They succeeded in blocking us; perhaps you might have better luck."

In another instance he talks about the failings of modern retirement systems -- at least in the US & UK -- and all he has to say is "As with minimum wage laws, French policy looks to be superior to the Anglo-Saxon model: the high contributions required by employers ensure that as long as people work they build up an adequate entitlement to a pension". This is emblematic of many of Collier's arguments. First, what is "the French model". Does anyone reading that passage actually understand what the concrete policy proposal is? Secondly, there is a lot of research on pension systems around the world. If we look at one such source of actual research, the Melbourne Mercer Global Pension Index, France hardly looks like a good model. France receives a "C" grade -- the same as the US. Why is Collier recommending the French model and not, say, the Danish model (#1 in the world according to the Mercer index) or the Dutch model (#2) or the Australian model (#3, plus an "Anglo-Saxon" country).

The weakness of Collier's policy recommendations is the fundamental flaw of the book. But the most annoying part of the book is his constant reliance on absurd strawmen. And the end of the day, virtually every single one of Collier's proposals ends up being extremely left-wing/socialist. For instance, he suggests that property owners be FORCED to sell property at below-market prices to renters. He recommends forcing companies to limit working hours ("long work hours can be discouraged by taxation") & increasing the amount of vacation. He wants to tax financial transactions. He wants to tax private litigation (to reduce the number of court cases).

Eventually, Collier realises this and even has an entire section defending against this and writes "What I advocate is not a variant of Marxism". When you have to write "I am not a Marxist" you are probably not advocating centrist, "common sense", "practical" suggestions.

Yet Collier is at such pains to paint himself as centrist & practical that he is forced to create absurd caricatures of "The Left" to give himself enough space to pretend to be a centrist. Here are some of his claims about The Left:

* they are "discrediting family obligations in favor of equal obligations to all children [around the world]". Didn't you know that every single Democrat thinks we should abandon obligations to our children?
* "Those on the left want to return to the rent controls of the 1940s". Didn't you know that every single Democrat is in favor of rent control?
* When presented with the idea of subsidizing anti-HIV drugs to poor countries, "Health economist, imbued with Utilitarian ideology, opposed this use of money." That's right, every single health economist in the world agreed it was a dumb idea.....
* "Ironically, the left wants nationalized industries". Didn't you know that every Democrat wants tons of nationalised industries?!
* "The currently fashionable alternative is public ownership." Can you name a single industry that you've seen a mainstream article about nationalising?
* "Instead, applying Unitarian principles, they make no distinction between their less educated follow citizens and foreigners." Really? No distinction?

And so on. It isn't just The Left who comes in for this strawmanning. Politicians also get a lot of it. "Yet, for decades, mainstream politicians have consciously avoided narratives of belonging. Indeed, they have actively denigrated them."

It is a shame that the rhetoric is so poor because I think that Collier does have some genuinely good ideas and some genuinely interesting suggestions -- even if I don't agree with them all, I think they are worth discussing and thinking about. If Collier threw away 80% of the book and revisited the parts about rebuilding communities & shared identity -- but did a less superficial take on the plethora of identities in the modern world and the challenges that has for building a shared identity -- I think this could have been a really interesting book.

Ultimately, this book feels like the finger food you get at a business conference. You never feel satisfied or full & the quality is often disappointing. You end up wishing you had just gone to a real restaurant that specialised in a few good dishes.

[Nataliya Yaneva · Rating 2 out of 5]

Бъдещето на капитализма на практика е бъдещето на световната икономика (добре де, Китай отчасти все още милее за комунистическата си принадлежност). Това ще рече, че горди хвалби като „25 години народна власт – 25 години цирк“ спокойно могат да отлежават някъде заедно с портрета на Маркс. Като се замисля, всъщност невъзпетият баща на комунизма вероятно е не Маркс, а Робин Худ, защото, както се твърди, доста ефективно преразпределял блага от богатите към бедните. Въпреки това от капитализма в сегашната му разюздана форма се облагодетелстват малцина, докато всички останали безрадостно шляпат в блудкавия бульон на сивото ежедневие. Както впрочем винаги е било, но сега е по-така. Това особено болезнено се усеща от тоя стълб на обществото – средната класа, която бавно бута със Сизифов труд нагоре по жизнения склон и междувременно се утешава с някоя нова технологична измишльотина.

Още в самото начало на книгата си Пол Колиър гръмко заявява, че ще ни даде най-добрите решения, които няма да се люшкат между популисткото ляво и лобисткото дясно, а ще са безкомпромисно центристки и ще обединят каймака от характеристиките на горепосочените. Това, което авторът прави обаче, е в доста голяма част от изложението си да се занимава с настоящето и отчасти миналото на капитализма. Разглежда основни проблеми в развитите държави, откъслечно и причините, довели до тях. Някои примери:
• Обединителният признак национална идентичност е изместен от идентифициране с група хора на база образование. Получава се разслоение между „образовани“ и „необразовани“ – едните ползват новите технологии, за да получат полезна информация, другите – за безмозъчна разтуха, при което затъват допълнително. Оставям на вас да се сетите кое действие за коя група се отнася.
• Масово обезлюдяване на малки градчета, струпване на хора в мегаполиси. В големите градове има добре платена работа за пичове с модерни професии, докато от рутинните се печели кофти и като цяло отпадат. Поради струпването на хора цените на всичко стават безумни, но пък особено добре печелят рентиерите, които не са допринесли с нищо.
• На ниво семейство също има разлики между образовани и не чак толкова. Първите планират дали и колко деца ще имат, акцентират върху образованието им и осигуряват контакти с други образовани семейства. При вторите забременяването е нещо като руска рулетка, после гръмналият патрон сам се оправя със себе си, започва да работи от крехка възраст, забърква се в неприятности и като цяло трудно отлепя от дъното.

Всички тези неща и още много други ще ви разкаже професор Колиър, но т.нар. решения, които предлага, са меко казано ерзаци. Вливането на свежи сили в НАТО или ЕС звучи твърде абстрактно. Осъзнаването на развитите държави, че трябва да наблегнат повече върху „реципрочни задължения“ също е доста мъгляво. Големите компании би следвало да се грижат повече за служителите и най-вече за клиентите си, не само да мислят за печалби – постигнато чрез разумни държавни мерки. Хайде де, наистина ли? Пък аз си мислех, че е толкова хубаво да има монопол и да ни цедят до последна капка кръв за всичко…

Самият Колиър почти извинително пише, че дава просто предложения, които следва да бъдат обект на доста разработки. Интересно ми беше, че не се спря върху нашумелия въпрос с универсалния базов доход. При част от решенията, които даваше, ми се струва, че би следвало да му е защитник. Ако на хората най-големият им проблем е, че са бедни, да им дадем пари просто? Или не чак толкова просто. За мое огромно съжаление хората, оставени сами на себе си и без очевадна мотивация за нещо, най-често се придържат към нищото (намигам на всички 30-годишни и нагоре, които още си живеят при мама и тате и не работят). Може би по-интересното решение е отрицателният данък върху доходите, но авторът мистериозно и дума не обелва за него.

Трудът на Пол Колиър е по-скоро разбор на текущото статукво и случайно вметнати факти от политическия и корпоративния живот основно в Европа. А, и носталгичен поглед към младините на капитализма между 40-те и 70-те, когато по негови думи били най-хубавите години. Видно е, че не е стъпвал в България или друга съветска сателитна държава по онова време.

[Mehrsa · Rating 3 out of 5]

Collier makes some excellent books in here, but the idea needed some time to mature and become clear. The book offers a hodgepodge of problems and a few hodgepodge solutions. Problems go from feminism and the decline of marriage to offshore tax havens. Basically, lack of morality infuses the market and the family and it must be recovered. How? Through communities. I enjoyed a few sections here and there, but that story just doesn't work as an indictment or even a description of capitalism. He doesn't shy away from blaming people, but he seems to want to blame everybody and do the both-sidism that is common these days. I read about this book in a David Brooke's column that tried to do the same. perhaps there are certain center right men who have been stalwart defenders of capitalism who may need this book because it allows them to blame the right for lack of morality (so long as they can keep blaming the left for destroying the family).

[Dax · Rating 4 out of 5]

Collier's pragmatic approach to social and economic issues facing western capitalism today is a refreshing read. This book focuses on how to renew our sense of reciprocal obligation towards one another. Collier constantly refers to the golden years of capitalism, 1945-1970, and compares that to this situation today.

The flaws of populism are pretty evident, but Collier goes deeper than simply attacking it. He explains where this populist movement came from, and how to get rid of it. Here he focuses on taking from the Metropolis and redistributing to the provincials (i.e, diminish the advantages that big cities receive via agglomeration). This will diminish the divide between the educated rich of the big cities, and the forgotten members of rural societies who feel they have been left behind.

From a revenue standpoint, Collier details a new focus for economists; taxation of economic rents rather than regular income. It's a concept that neither republicans nor democrats will love, but it should come as no surprise to anyone that a possible solution just might exist somewhere in between the two extreme positions developed by the the right and the left.

I also liked the idea of transitioning our educational system to vocational training, rather than simple cognitive development. The Germans have implemented this system to great effect. Collier makes a convincing argument that the cause for lower wages in capitalism is a low productivity, low cost model that stems from poorly trained employees. People should be willing to pay more for their goods if it means they are paid more for their work, and Collier believes vocational training will steer us down this path.

I am in danger of writing a synopsis of the entire book, so I will stop there. I don't love all of Collier's proposals, but 'The Future of Capitalism' is a very good read and will appeal to any open minded readers. Far left and far right individuals probably won't like it, but they are the ones who most need to read this.

[Kostina Prifti · Rating 1 out of 5]

Reading a centrist's point of view on politics, sociology and economy is always a challenge for me, but I accepted this one with interest because of the good reviews and credentials of the author. I was, however, disappointed and at times enraged by the superficiality of this book. I have seen past readers give a bad review to the book because it was supposedly "too academic", but I think its worst quality was exactly lack of academic methodology when discussing different ideological approaches. An example of this basic assertion is when the author clearly states in the beginning of the book that, in his view, in order to have prosperity and people working hard for social improvement we have no choice but to accept capitalism as our economic, socio-political order. However, there is no academic (or otherwise) explanation, reasoning, or clarification as to how the Oxford-educated economist has reached this conclusion. Why is it that no other system other than capitalism can bring prosperity and remove deep social rifts? You won't find it in the book. The presumption that only capitalism can take the world to a prosperous future is taken as an axiom, without any kind of reasoning.
One could go into many details and further examples encapsulating the lack of academic methodology of the author when he discusses different political and economic ideologies, but in essence I conclude that the only worthy discussion of this book was how capitalism has created deep rifts in societies with different build-up, how the way we are leading our capitalist lives leads conclusively to new anxieties, but the solutions to these issues are contradictory and will ultimately lead to fixing symptoms but not the actual disease which is - well - capitalism.

[Kursad Albayraktaroglu · Rating 1 out of 5]

Too academic, dense and basically has nothing to do with its title or the subjects listed in the blurb. I was expecting a cogent analysis of the current state of capitalism and the way forward. What I got is an incoherent collection of essays on ethics, society, and nothing on capitalism in the first half of the book. Skip this one, and leave it to social science grad students.

[Marks54 · Rating 4 out of 5]

This is a wonderful book, even better than I expected. The author is a respected and well published Oxford economist. The intent of the book is to provide a thoughtful overview of the problems facing global capitalism and even offer some possible fixes, perhaps in conjunction with his retirement thoughts. The result is a complex and well done integration of economics, politics, history, philosophy, ethics, and culture that spans continents and crosses multiple levels of analysis with ease. All of the issue areas one would expect are present and accounted for - Brexit, Globalization, China, Trump, tariffs, taxes, ideology, populism, and so on.

So what is the punch line? READ THE BOOK. He does present a general argument that spans levels, perhaps too easily. His focus is on relational logics as bases for personal meaning rather than atomized individualism. This is joined with a story of how social order at all levels has been corrupted and weakened due to disruptions of governance at the level of the society, the firm, and the family - among other collectivities. One of the more striking arguments in the book for me concerned the growing prosperity of major huge metropolitan areas, coupled with the decline and decay of medium and smaller urban areas - think London versus the rest of the UK or New York and Chicago versus Detroit and Milwaukee.

When he gets to fixing problems, the book seems a bit thinner, although it is still good for the genre, perhaps due to the author’s familiarity with development economics. He also makes a good case for pragmatism versus theoretical and ideological purity.

The is an impressive work for 250 pages. It reads well and is accessible to general readers. The references are good for readers who want to go deeper.

[Karl-O]

https://www.economist.com/books-and-a...

[Dan Graser · Rating 4 out of 5]

What Oxford professor Paul Collier has written here is not only a very involved work of economics but also a deeply felt expression of ethics surrounding the current socio-political climate and how that has tainted and marginalized rational discussion of purely economic issues. He frames the idea of confronting the new anxieties surrounding capitalism and within the world's most successful capitalist countries as:

Restoring Ethics - operating at the State, Firm, Family, and World
Restoring the Inclusive Society - examining the class and global divides as well as the disparity between the "booming metropolis and broken cities"
Restoring Inclusive Politics - finding a way to operate politically without pervasive echo-chambers and the extreme distortions we find ourselves with which we are working.

Thankfully, this work is not just yet another call for pure centrism without any practical suggestions, conveying an opinion that all sensible people likely already agree-upon; it is a dense work of economics with clear analyses (albeit sometimes written in impenetrable prose) that makes real-world suggestions that will make demands on folks of both ends of the political spectrum. A book with which to take your time as Professor Collier speaks in very academic prose on certain matters, however, his message is important and his opinions are very stimulating, even when they're wrong...

[Daniel · Rating 1 out of 5]

Es tut mir Leid - aber dieses Buch war ein absoluter Reinfall. Ich habe es gelesen weil Bill Gates es empfohlen hat. Nach der Lektüre bin ich mir nicht sicher ob das in Zukunft für mich noch ein Argument sein wird. Andererseits: Selbst Gates hat angemerkt, dass er in vielen (oder einigen? Ich erinnere mich nicht genau und werde jetzt bestimmt nicht nachsehen) nicht Colliers Meinung ist oder war.

Collier schreibt, dass er hofft dieses Buch würde viele Politiker inspirieren. Ich hoffe, dass er in diesem Punkt eine Enttäuschung erlebt. Nicht, dass ich ihm generell übles wünschen würde - aber seine Vorstellungen sind, im Kern, völlig veraltet. Mir scheint manchmal, er hat Fakten um Fakten gelernt, aus ihnen aber nur bedingt gelernt.

Ich bin sicher, dass er größtmögliche Sorgfalt hat walten lassen, wenn er seine Thesen auf deren Wahrheitsgehalt geprüft hat. Aber was hilft es zu wissen, dass die Schienen völlig in Ordnung sind, wenn man im falschen Zug sitzt? Sicherlich nicht nichts - aber auch nicht unbedingt viel.

Das Klima-Problem geht Collier, wie viele Ökonomen seines Baujahrs, nicht mit dem notwendigen Ernst an. Man merkt in den meisten Kapiteln deutlich, dass er mit dem Kopf noch in der Vergangenheit steckt und Probleme anzugehen versucht, die auf der Liste der dringendsten Bedrohungen ganz bestimmt nicht auf den ersten Plätzen stehen können. Seine Visionen sind, im wesentlichen, die gleichen wie jene der Politiker von vor 30 Jahren. Er will einen Zustand wiederherstellen (oder sagen wir: sich einem Zustand wieder annähern), dessen Glanzzeit definitiv vorbei ist. Ich (und die meisten anderen unterhalb der 50-Jahre-Grenze, da bin ich sicher) haben schlicht andere Sorgen, im Augenblick.

Colliers Buch ist für mich leider wertlos. Es mag vielen etwas geben, die sich in elitären Kreisen bewegen deren Epizentrum entweder politische Partien oder ökonomische Studien sind. Menschen, die mit beiden Beinen fest in den Wolken stehen, die ihnen ihre Lehrer aus dem frühen 20. Jahrhundert zur Verfügung stellten. Für alle anderen, die - wenn sie den Blick tatsächlich einmal heben - in die Zukunft schauen wollen gibt es bessere Vorschläge, bessere Ratgeber und bessere Inspiration.

Überhäuft den Herren also gerne mit Preisen, journalistischem Lob und akademischen Ehren. Klatschen werde ich dazu nicht.

[D. St. Germain · Rating 5 out of 5]

In The Future of Capitalism, Paul Collier, a development economist most known for his work The Bottom Billion, tackles the rise of poverty and the "grim rifts" that have begun to define the politics of his own country, the United Kingdom.

Economists who study developing countries have particularly interesting insights into how policies can work or not work at alleviating poverty and creating inclusive growth. Collier is interested in a new pragmatic politics that rejects both ideology and populism, one which works to build a common narrative, shared identity, and sense of purpose to tackle the big structural problems industrialized countries face 30 years into globalization.

The rise of the "psychopathic selfishness of economic man," he writes, has led to a deep fracturing in our sense of a common future, a common narrative, and a sense of obligation to our fellow countrymen. It has led to a fracturing of a common identity, and in that, skilled people have come to believe they know better than the less educated and are thus "entitled to override the values of others," eroding trust and cooperation. And cooperation is the basis for a well-functioning economy.

Policy is spatial, Collier reminds us, and only by renewing a sense of belonging and togetherness can we begin to address the rifts tearing polarized polities apart.

The Future of Capitalism is not a typical rehash of how-we-got-heres; this is a deeper meditation on what makes human societies flourish or flounder together, and what a moral sense of belonging to each other, and to our countries, could do to transform the world. For a longer discussion on the themes of this book, see here.

[Colby · Rating 4 out of 5]

The diagnosis is better than the prescription

[Antti Värtö · Rating 4 out of 5]

I haven't made this many notes from a book since The Righteous Mind: Why Good People Are Divided by Politics and Religion. Collier has a very engaging style: he raises up tough questions, boldly declares how both the right and the left are incapable of answering them, then gives his own suggestions for answers.

And the thing is, Collier's proposals feel at the same time common-sensical and surprising. This seemingly paradoxical feat may be due to the fact I'm very used to the standard political positions: the left wants to raise taxes and supports immigration, the right wants the opposite. So when someone comes along and wants to raise taxes but control immigration, it feels surprisingly novel, although it really isn't very uncommon sentiment outside the political arena.


Collier calls his politics "social maternalism" and "Pragmatism", but really he could've just said "conservative"; Not in the Tory or Republican sense of the word, but in the political philosophy sense. With this book Collier takes place among the growing group of intellectual conservative voices, who advocate the merits of traditional societies and values, such as Jonathan Haidt, Robert D. Putnam or James C. Scott.

Collier's thesis could be summed in one sentence as "reciprocal obligations, not rights or freedoms, make happy and prosperous societies". The political right have been obsessed with individual freedom, but people are social animals; we don't really cope well as individuals without any bonds. The political let had been obsessed with (human) rights, but rights without obligations are hollow; we want to feel useful and part if something, not just recipients of benefits from a faceless bureaucracy.

From this thesis Collier proposes several ideas how to fight against the ills in our societies.

The book is very good, but still shy of great. Collier over-extends himself many times and some of his proposals sound like wishful thinking. "A nation needs a shared identity". Sounds great, any ideas how to actually build one? No? Oh well.

[Dani · Rating 1 out of 5]

The occasional sliver of an interesting idea really cannot outweigh the endless radical centrist drivel here.

[James Hogg · Rating 1 out of 5]

The 'hard centre' has finally found its most stalwart defender - liberal economist Paul Collier. Starting from the premise that Capitalism is fundamentally good, he decries the current political divisions in liberal-democratic society as the result of a few bad apples running some big firms, the fading of an undefined 'sense of victory' that bound the west together after the second world war, and (for some reason) the writing of John Rawls. Despite professing to delve beyond his discipline, you get the vibe that Collier (like most centrists) got his education in the social sciences from Alain De Botton's 'the school of life'. For those that want to experience this book without spending the capital on a hardback copy, I'd suggest going to the nearest beach, digging a hole, and burying your head in the sand. Or, if you don't live near the beach - build two men out of straw, place one to your left, and one to your right, and pat yourself on the back after knocking them both down.

[Michael · Rating 4 out of 5]

Overall, I’d recommend this as a necessary view from an economist on the deeper reasons why some Western first-world societies are experiencing shifts toward nativism and populism, and what is causing the widening gap between rich and poor. Collier does this by cogently explaining how excesses in both liberal and conservative thought have led us here.

The corrective policy recommendations, though good in theory, are so far out of the political norms of the past three-plus decades as to feel hopelessly utopian even when Collier claims they will be difficult.

100% recommended as a diagnosis, but not as a treatment plan.

[Lydia · Rating 3 out of 5]

this book made me want to have children lolol

[John McDonald · Rating 5 out of 5]

This is an important book which outlines a format for capitalism that, if practiced, likely would relieve any number of conflicts and dysfunctions that worldwide societies and economies face. It's a longshot but a longshot worth debating and, with some fine tuning, implementing.

Although the author, Paul Collier is a Nobel Laureate from Oxford University, this is not a scholarly work. It is, rather, the effort of a scholar tasked with global duties and advisory functions to her Majesty's government to meld his experiences and scholarly insights as an economist with his observations of the world in which he lives and works. He comes from place of the shared sense of community values, common good philosophy, and a view of the world shared by ordinary people who shared his early years and his roots in Sheffield and the devastation wrought upon families, workers, and communal solidarity as capitalism and the capitalist mandate failed the town he lived in before his notable career in economic.

Collier provides a general theory, not really itemized, that is based on ethics, law, community, and the family. To him, it is a workable theory, and the major flaw is not in the theory, but in the implementation of it: how do we demand and enforce those on the extremes of the right and the left to join forces in a unified effort to ensure that commonly accepted community goals, a theory of the common good, are agreed to. It seems obvious to me as someone who generally accepts Collier's plan that the vested interests on the fringes of ideology--the capitalist billionaires who control how much they pay in taxes on the right and the vested interests of the rent-seekers of both the left and the right--stand to lose status and will fight to preserve those statuses even in the face of a shared belief that is time to return to a 'common good' for families, communities, the state and the nation.

Here is the foundation of Collier's important work, expressed in his own words:

" Families, firms, and states are the essential areas in which our lives are shaped. . . .
" The peole at the top of organizations in families, [business and private] firms and states are more powerful than those beneath them, bugt usually they have responsibilities that far exceed their powers. To meet their responsibilities, they need other people in the group to comply, but have only limited means of enforcement. In my role as a father, I try to insist that Alex goes to sleep at night. But raw power is hard work and not very effective: Alex reads under his bedclothes.
In all successful organizations, whether families, firms, or states, leaders discover that they can radically increase compliance by creating a sense of obligation. . . . [i]f I can persuade him to go to sleep, the challenge of enforcement is reduced [and] my power is tsansformed into authority. More grandly expressed, this is the construction of moral norms for strategic purposes. The crucial power of leaders is not that of command: it is that they are positioned at the hub of a network. They have the power to persuade . . . to shape our lives. . . . It is a healthy process that has enabled modern societies to be [in] better places than all previous societies. . . .

"Despite the promise of prosperity,what modern capitalism is currently delivering is aggression, humiliation, and fear: the Rottweiler society. To achieve the promise, our sense of mutual regard has be be rebuilt. Pragmatism tells us that this process will need to be guided by context and evidence-based reasoning." (excerpts from pages 39-46]

Collier proceeds to identify what may be the single most important component to forging and implementing his theory. Reciprocity and ignoring of rent-seeking in defining duties and formulating benefits and costs.

As it happens, Collier's statement of leadership largely coincides with that leadership shown by a truly remarkable political leader of my time, Nelson Mandela, who marched at the front showing by example how the common good could be achieved and who took into his heart the greatest symbol
of black South African oppression, Springbok rugby. Great leaders persuade other first before they march. Collier identifies what may be the most important components to forging and implementing a lasting theory of capitalism. Reciprocity and ignoring of rent-seeking in defining duties and formulating benefits and costs.

How do we get where Collier would like us to go? A sense of place, he says, gives us an immediate identity with the values and actions that made us who we all become. Collier's is Sheffied, of course. Even though I have lived in every region of the U.S. except the Deep South and the Southwest, I still identify with the values and childhood I lived in Gloucester, New Jersey, a small town of 14,000 (even today) across the Delaware River from Philadelphia. [This idea led me to think of how I still identify with the Phillies, or how those from Boston identify with the Red Sox--maybe hometown sports teams have a place in this, as in 'I'm from Arsenal or Tottenham, or from the Mets).

The parts of the book I found truly inspiring from the standpoint of economic interest was Collier's treatment of economic rents, taxation of rents and agglomeration of rents, and rent seeking. I will not dive deeply into these theories here, because they require focus to understand the complexities of the thinking behind it. What sealed my appreciation for Collier's integrity was this statement"
"the resources spent on rent-seeking are a total waste." Boom. There it is: eliminate (if possible) dramatically marginalize resources spent on attempting to create an economic advantage from something that does not expand value or expand the economic pie, e.g. lobbying for the creation of a monopoly so that shareholders not the society at large would benefit, either in the increased profit or from any value or efficiency created. This, I think, is worth an effort all its own, one that, if it succeeds, would improve life uniformly and universally. And, he has something to say about rent-seeking and tournament jousting by lawyers, only a third of whom he says are actually seeking or doing justice. And Collier does not avoid issues of taxation, rule by meritocracy and the meritocrats, and corporate governance and social responsibility (how socially conscious is it when Starbucks, through a subsidiary based in the Dutch Antilles which sells Starbucks' licenses to the British Starbucks's store, completely avoids the payment of taxes on British generated profits to the extent of the costs of the licensing arrangements. Rent-seeking? Yes, maybe even a corrupt purpose that diminishes any claim Starbucks and companies doing the same thing to involvment in a social purpose that promotes a common good.

I found one flaw, not in Collier's reasoning, but an analogy he uses to explain where things sadly went wrong with capitalism. He argues that the rich areas, among them Catalonia in Spain, often seek isolation from the rest of the nation in which they are formed politically through secession. In the U.S. during times of economic dysfunction, the Texas secessionist movement works up crowds by exhorting people to separate from the U.S. [Of course, none of the disadvantages of secession such as how do we pay for the investment made by the US national government from US (not just Texas) taxpayers get repaid are ever raised let along discussed. My problem is using Catalonia or any other region with a majority culture significantly different from the culture of the nation-state as an example. Catalonia fought the Nazis and Franco, a post war Nazi, when others in Spain and the world complained of it. The example is bad as would be the example of Quebec seeking to secede from English-speaking Canada or Northern Ireland being separate from the Irish Republic. Both are examples of culture and language overriding the nation in which these provinces are politically attached. Of course, it is always better that negotiated solutions are forged and implemented, something miraculously done in the case of the troubles in Northern Ireland and in Quebec.


Collier gives us a tall order here when he calls upon us to rethink capitalism and its utility as it currently operates, but it is an order that requires discussion, debate, and coming to terms with a better way. Time is short. Collier's approach demonstrated in this short book with complex idea's is both measured and evidence-based, and those approaches may cause many to reject it. We have to get beyond the calamity we saw in September, 2008, when banks which were blamed for causing a meltdown in the credit markets sought used the ultimate in rent-seeking in trying to avoid participating in a common solution to a world wide problem. The lifespan of capitalism, to the extent we recognize it as a market-clearing device for choices we must or can make, will be short-lived without reform, or at least striving to achieve outcomes that reach the common good.

[Nirali ZZaveri · Rating 5 out of 5]

I recently did a quiz to ascertain my political leanings and found out that I was definitely more libertarian than the average person. This led me quickly to wonder about the differences between right and left libertarians and the distinctions in their points of view to solving for the failures of capitalism.

Paul Collier does a wonderful job of expressing the shortfalls of an individualistic society and the dilemmas that face capitalistic communities. It is ironic that the society, community and altruistic morals that are necessary to build a healthy and motivated civilisation, are the very forces that richer nations grow to undermine. It seems inevitable that a return back to the roots and the essence will be necessary for a sustainable existence over the longer term. Politicians and present generations never want to bite the bullet during their glory years and hence the inevitable dance towards future anxieties continues.

Some disillusioning remarks:

“Encouraging your firm to have a decent sense of purpose is your contribution to society, but continuing to work for one which lacks purpose is personally soul-destroying.” - A note on being a part of the system

"All leaders add and refine the narratives that fit within the belief system of their group, but great leaders build an entire belief system." - Observation on the difference between visionaries and populists

"The starting point for a new approach is to recognize that the role of the large corporation in society has never properly been thought through. The boards that run large companies are taking decisions of overarching importance for society. Yet their present structure is the result of individual, unco-ordinated decisions, each of which happened to lead to some further decision that had not been anticipated. " - A reminder that corporations are individual decisions and intentions manifested together and inherently detached from the interests of the collective in its essence

[Pedro Fernandes · Rating 5 out of 5]

A book about how utilitarianism has guided our societies to become more individual and more explorative of each other acting to exclusively benefit themselves that leave us as a whole with many issues to tackle.
This isn't about the end of capitalism but reforming capitalism to the likes of the same being practiced in the 40s to 70s, the author divides the critic between three essential pillars that any society leaves upon, family, corporations, and state. He explains how we have changed across the years, what we have benefited from those changes and the main issues that we should be dedicating our time to tackle. He speaks about how companies weren't always following the doctrine of Friedmann, how real estate value in metropole valuation is increasing what causes it, and what can we do about it and how we currently have a somewhat big number of single families, why does it happen and how the state should handle the issue.
If you found any of that interesting, give it a read.

[Fromlake · Rating 4 out of 5]

Il futuro del capitalismo, di Paul Collier. Ed. Laterza

Negli ultimi anni la crisi del sistema capitalistico è apparsa sempre più evidente.
Il libro di Paul Collier, economista inglese di fama, cerca una soluzione dall’interno, proponendo dei correttivi ad un sistema diventato sempre più aggressivo. Il libro si legge piuttosto facilmente anche senza possedere una preparazione economica.
La parte iniziale è quella a mio avviso più riuscita, in cui sono evidenziate le distorsioni provocate da un sistema esclusivamente votato al profitto (eccessiva disparità economica ed educativa, sfruttamento, iniquità, mancanza di solidarietà, ecc).
In estrema sintesi Collier identifica la causa di queste distorsioni nell’assenza di una coesione etica tra i membri della comunità che favorisca, a titolo di esempio, il sorgere spontaneo di atteggiamenti improntati all’equità (come il tetto ai compensi troppo elevati) ed alla solidarietà (come i doveri di accoglienza).
Se la diagnosi appare convincente, non altrettanto appaiono le soluzioni proposte, che richiamano la necessità da un lato del recupero di un sentimento patriottico che è oggi ostaggio di un nazionalismo fatto di contrapposizione piuttosto che di inclusione, e dall’altro dell’abbandono di un eccesso ideologico che oggi rifiuta qualsiasi compromesso in battaglie peraltro sacrosante come ad esempio l’ambiente.
Collier si richiama ad un periodo come quello del dopoguerra in cui l’intera comunità nazionale era tesa verso l’obiettivo della ricostruzione, con uno spirito di coesione che ha favorito alcuni decenni di prosperità.
A mio avviso, tuttavia, tale elevato livello di coesione è stato grandemente favorito dall’aver appena superato un evento fortemente traumatico come la Seconda Guerra Mondiale.
Spero di sbagliarmi ma ho purtroppo la sensazione che un simile spirito comunitario non sarà facile da ricreare, a meno di non andare incontro a nuove situazioni traumatiche.
A prescindere dall’efficacia delle soluzioni proposte, è comunque un libro che vale la pena di leggere per l’originalità delle sue analisi.

[Elin Rapp · Rating 3 out of 5]

Jag håller inte med om alla poänger eller slutsatser han gör, men många poänger är intressanta därav 3 stjärnor. Tyckte delarna om synen på identitet mellan de högutbildade och de som inte är utbildade var väldigt intressanta och tankeväckande. Vissa delar av boken höll jag däremot inte alls med om. Han pratade även om VDar, på 30 år har VDar i UK gått från att tjäna 30 ggr mer än sina workers till 150 ggr mer, i USA 20 ggr mer till 231 ggr mer. Således identifierar Vd:ar inte längre sig med sina egna ”workers” utan deras kollegor är andra vd:ar.

”The adjustment of dreams to jobs is part of the pain of becoming an adult”

[Pinar · Rating 2 out of 5]

hızlı okunan, kolay anlaşılır, ekonomi dışında her konuya değinen, içeriğin büyük bir kısmı Noah Harari'den derlenmiş hissi veren, sonuç itibariyle kapitalizmden başka bir gelecek görmeyen, solcularla nazileri eleştiren, ama kapitalizmin de böyle gitmeyeceğini söyleyen, çözüm olarak "etik kapitalizm" diyen bir kitap. yazar kitabı politikacılar için yazmamış, vatandaşlara yazmış. kitap içindeki tezlerin daha tam oturmadığını geliştirilmesi gerektiğini söylüyor. ama bence gayet havada kalan iyi niyet bildirgesi gibi..

[Griffin Hoover · Rating 4 out of 5]

Really interesting read that interweaves sociology, economics, and politics. First half is more sociological, analyzing the factors that lead to the rise and fall of key pillars of societies - countries, companies, and families. Second half looks at how economic theories/practices and public policy can be used to benefit the aforementioned pillars. Collier is driven by data and case studies, and provides a lot of practical solutions. I appreciate his pragmatism, his impartiality to what he believes works (takes shots at the left and right, at populists of all kinds, at individualists and utilitarians), and his concern for the poor that plays itself out in an ethical, communitarian way, as opposed to the way Mr. Marx did it. It required plenty of focus as there were economic theories and terms that took awhile to learn, but overall a solid read and I’ll be looking for more like it in my search for dynamic living in a loud, frantic world.

[Mathew Madsen · Rating 3 out of 5]

Rating: 6.5/10

The Future of Capitalism is an important book. Paul Collier outlines some genuinely interesting thinking and proposes new ideas, both of which are increasingly difficult to come by these days. I personally don't agree with many of his conclusions or policy proposals, but putting new ideas out into the public discourse is important. As is impassioned engagement with those ideas.

A Philosophical Divide

The overarching theme of the book is this: capitalism in its current form is broken and our institutions are breaking down because we have lost a sense of shared identity and belonging as outcomes for "educated"/urban and "uneducated"/rural diverge. He presents this case in a very neat and tidy narrative of the world from the 1940s through today. In fact his narrative is a little too neat and tidy for my liking. The way he tells the story strips away detail to the point where his proposals seem like the no-brainer solutions to the problems we are facing. I'm suspicious of anything that makes that much sense because ultimately reality is messy and details matter. We as humans are susceptible to manipulation by narratives, something Collier clearly understands because several of his solutions explicitly call for harnessing the power of narrative to shape the world. That skepticism aside, I don't think the book was written with insidious intent. Collier seems to be genuinely searching for the "right answers" and there are some nuggets of wisdom to be had.

From the outset, Collier is intent on distancing himself from established views: rejecting the "headless heart" of populism and the "heartless head" of ideology in favor of pragmatism as the panacea to our problems. The pragmatic philosophy is a seemingly non-controversial north star: find the best solution to the problem and act accordingly. I generally agree, though my religious beliefs probably leave more room for rigid rule-based principles than Collier would like. Correspondingly, his dismissal of religiosity in his vision of the future is a big sticking point for me.

Pragmatism has limitations though, and Collier appears to be upfront in admitting this early in the book:

Pragmatism has its dangers. The freedom to deduce moral actions situation- by- situation has to be bounded by our inherent limitations. Reasoning takes effort, yet our will and capacities are limited. Worse, we are tempted to fit reasons to our values. Worst, our judgements are no better than our knowledge. (p.38)

The only problem is that much of what comes after this admission is largely devoid of the uncertainty and intellectual humility this critique correctly implies. It still advocates for some technocratic ruling class making judgement calls about what is "right" or "moral" in a given situation with few safeguards against the unintended consequences that so often follow good intentions.

Further, and this is a more fundamental critique, Collier denounces populism as "leaping directly to solutions that ring true for two minutes" (p.14). True as that might be, one could say equally accurately that Collier's brand of pragmatism is reasoning toward solutions that ring true for two decades. And I'm convinced that even that time-horizon is too short (for more on that see Tyler Cowen's Stubborn Attachments, which I was prompted to revisit after reading The Future of Capitalism; a book that resonates with and inspires me much more deeply). We should be approaching these issues, particularly those with implications for economic growth, with more focus on long-run thinking.

Ethical Institutions

The bulk of the book is devoted to treatment of various societal institutions and Collier's vision for restoring them to their ethical roots: the ethical state, the ethical firm, the ethical family, and the ethical world.

The Ethical State

Collier's vision for an ethical state aims to reverse the perceived trend of well-off urban populations shirking their obligations to rural areas that have been left behind by the trends of the last 30 years. His model for understanding these shifts makes sense: our personal status used to be largely tied to our national identity, a trait shared by all, but increasingly, we tie our status to our occupation/education/skills, a measure with more variance within national populations. The proposed remedy for "a viable and inclusive identity" is "a sense of belonging to place" (p.73). Though, after devoting considerable attention to the pitfalls of nationalism and shared national identity (some of which are clearly true), it's unclear to me how this sense of belonging to place would fall outside the realm of nationalism. It seems to be a distinction without a difference.

The other main idea in his vision of an ethical state intended to repair the growing urban/rural divide is a geographical based tax levied on megacities and redistributed to declining regions. I follow his reasoning to a point. For instance, taxing the appreciation in land/property value certainly seems reasonable (San Francisco take note). But the upshot of his argument goes something like this:

- Technology has increased the productivity of educated knowledge workers
- This higher productivity is not attributable particular individuals, but is the result of "Agglomeration Effects" or "Network Effects"
- The high productivity facilitated by agglomeration wouldn't be possible without stable institutions (i.e., decent government, rule of law, infrastructure, etc.)
- These institutions are largely public goods provided by all members of society
- Because rural areas contribute to these institutions they are entitled to a portion of the gains they generate

I'll give Mr. Collier a bit of a pass here since he is British and they were always a bit slow on the whole inalienable rights thing, but this argument represents a fundamental lack of understanding of American principles (note that the book isn't addressed specifically at the United States, but many of the arguments do seem to use us as an example). The rule of law may be a public good reliant on the decentralized actions of many, but it is one our institutions are designed around and enshrined in the principles of "life, liberty, and the pursuit of happiness." Common observance of the rule of law is part of the social contract that provides equal opportunity for all and allows for a society that respects the aforementioned "inalienable rights". But that is where the entitlement ends. Your "deserved" payoff for observing the rule of law is mutual and reciprocal respect for rights enshrined in the Constitution. Nothing more and certainly nothing less.

Using the rule of law as a bargaining chip is a non-starter. To suggest that a contribution to the rule of law entitles provincial citizens to the productivity gains of urban workers is nothing short of extortion: "You are only as productive as you are because we uphold the laws that we have all agreed to as a society. If we chose to break the law and ruin society you wouldn't be as productive so therefore we deserve some of those gains." I find this a weak and dangerous argument.

Other proposals include a plan for reducing housing costs by increasing supply via removal of building restrictions, i.e., screw the NIMBY special interests (YES PLEASE!!!), reigning in the borrowing limits arms race for home purchases (mostly good), and a very fuzzy proposal to restrict real estate purchases for non-residential, i.e., investment, purposes, (GTFO with that).

The Ethical Firm

Collier's vision for the ethical firm is rooted in the idea that capitalism is broken. He frames the discussion by offering two choices: "'The primary purpose of business should be to make profit' versus 'Making a profit should be only one consideration among many'" (p.77). This is a false choice. These two statements are not mutually exclusive nor are they incompatible. Further, he ties the first option to Milton Friedman and in doing so either misunderstands or, more likely given Collier's position and intellect, willfully misrepresents the Nobel-winning economist.
Friedman outlined his position clearly in a 1970 op-ed titled "The Social Responsibility of Business is to Increase Its Profits". No burying the lede there, but the title doesn't tell the whole story. Friedman is clear that unmitigated profit seeking is not the goal, rather the responsibility is to make a profit "while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom". That sure sounds like 'Making a profit should be only one consideration among many' to me.

Friedman's actual position and Collier's vision are actually closer than it would appear at first glance. Collier is for a capitalism where "profitability is not the objective; it is a constraint that has to be satisfied in order to achieve these [ethical] objectives on a sustainable basis" (p.78). We could summarize the Friedman position similarly as: "profitability is the objective, subject to constraints for legal and ethical behavior." Constraints maybe isn't the best term since it suggests actors pushing the limits because they would move beyond the constraints were they absent. Unfortunately, that is too often an accurate description of how some people operate, and we shouldn't ignore that fact.

This, however, is an example of Collier using narrative to bend reality toward his own ends. The distinction between the two viewpoints reduces to choosing primary/secondary objectives in the firm's optimization problem. Both are compatible with a stance that there is room to improve how capitalist institutions operate, but that is not how Collier presents it, instead opting for a classic 'good vs evil' story that simply isn't true.

The manipulated narrative continues with his treatment of large tech companies (Facebook, Google, Amazon, eBay, and Uber), suggesting they are "highly dangerous" "unregulated, privately owned natural monopolies" (p.95). The only problem is that he offers no evidence that these companies are monopolies at all (spoiler: they aren't). The best case is against Apple, a company he doesn't mention, and maybe Google (DOJ's recent lawsuit is thin at best). Ultimately, it's very hard to show consumer harm for any of these companies. They make high profits, but they also consistently innovate and deliver value for consumers (for more on this see here).

The headscratchers don't end there. Collier is worried about short-term thinking by firms, but his suggestion that we increase taxes on the tech companies is nothing short of myopic. Mega-cap tech is possibly the single best sector in terms of planning and investing for the future because they know their barriers to entry are largely tied to the fickle mistress of network effects and there is an army of firms waiting for any sign of weakness. That's the beauty of creative destruction and the profit incentive Collier apparently thinks is no longer relevant.

One point where I do agree with Collier's assessment is his suggestion that reckless firm managers, particularly those in the financial sector, be made accountable for their actions: "The knowledge that, even once retired with a golden parachute, a former CEO could be dragged off the golf course and held responsible for past mistakes would likely concentrate the minds of those in positions of responsibility" (p.103). This is a good idea that would mitigate a clear market failure and better align incentives. As Nassim Nicholas Taleb would say, these managers need to have Skin in the Game.

The Ethical Family

Collier's story around the decline of society's most fundamental building block make sense: "In place of the family, the new ethics put the self; in place of esteem from meeting obligations, the new ethics put esteem from self-fulfilment" (p.107). In many ways, the family as an institution has been gutted and undermined over the last 40 years. We have become more selfish and unwilling to accept familial obligations if they inconvenience our personal "self-discovery". To see the extreme results of this, one need only to spend five minutes browsing the hellscape that is the "childfree" community on Reddit or take note of the growing number who in response to the suggestion that they have some obligation to their elderly relatives respond with distain for the generations that in their view "ruined the economy". After all "we never asked to be born" (another view that is becoming shockingly more common).

Collier outlines this decline as a series of cultural revolutions that brought some benefits, but ultimately were "little more than selfishness masquerading as self-discovery" (p.116). He acknowledges the role that religion played in reinforcing shared values and obligations to form the ethical family of the past. Indeed, he heralds marriage as a key institution for the restoration of the ethical family, but there is no room for religion in Collier's vision. No, "marriage is tainted by its religious associations, and so we need a purely secular equivalent" (p.117).

For one who styles himself as a ruthless pragmatist, unbeholden to ideology and seeking only for the best outcomes, this is a ridiculous conclusion. If you understand the power that religiosity has to inculcate the kinds of shared values and identity you believe are so vital, why reinvent the wheel and engage in the mental gymnastics of leaving religion out of the solution entirely? Even if you are not a believer yourself, you can encourage more religiosity on the margin for society as a whole. At the very least do a better job of hiding your personal distain.

The Ethical World

Collier's main point here is that our venues for international cooperation and decision making are outdated and misaligned. His suggestion is that we forge a new council between the six largest economic and military powers, the "G6": China India, the USA, the EU, Russia, and Japan. It's an interesting idea and the logic is good. Current organizations like NATO and the G20 have few good enforcement mechanisms and free riding is rampant. A smaller group makes coordination more feasible. Though I am hesitant of a plan to formally elevate China and Russia to a group that would, by design, have significant power to shape the world. A grand council where a third of the members are untrustworthy bad actors seems like a risky proposition.

Conclusion

Ultimately, The Future of Capitalism is an important book. The ideas are novel, presented in a compelling way and worth engaging. If anything, reading it has led me to think differently, which made it a worthwhile read.

[Daniel · Rating 5 out of 5]

Collier is an Economics Professor at Oxford. He pointed out that the current problems of capitalism stem from assuming the existence of the unreal Economic Man and promotes Utilitarianism. As a result, profits are maximised, manufacturing and back end jobs are moved overseas, machines are substituted for human labour, the cities get richer, leaving behind the provinces. The educated pulls ahead from the uneducated. The elite starts to base their self esteem on their skills and not their nationality and look down on those left behind. Those left behind lose their jobs, hope and self esteem. They went to drugs, alcohol and even commit suicides. They strike back, voting out the establishment and choosing populists who promise to bring back the good old days. They choose to Leave and not Stay in big unions.

Capitalism needs to realise that other than self interest, we need reciprocity and national identity. We take care of the disadvantaged and should change the system that is creating those disadvantaged in the first place.

1. State ethics. We used to have high taxes to redistribute wealth and services to the poor. That is gone because of globalisation’s tax rate race to the bottom. We need a national identity. However it cannot be based on values as that is very diverse. The only viable way is to have place identity. Leaders need to stop promoting a global identity and encourage patriotism again. Patriotism is not nationalism in the sense that the former promotes international cooperation not American First. Cities should be taxed (especially property tax) to restore the provinces. Form economic development departments, tax breaks and cheap land Nd court big companies to attract new businesses (like Singapore!). Immigration needs to be controlled because the less skilled are crowded out by immigrants who will work for far less, but the high skilled actually enjoy the increased productivity, but less willing to redistribute their income with higher taxes. We need more pragmatism, and choose more central leaders. That can be done by choosing the leader from the victorious political party and an informed electorate. We need to intensively support and mentor kids who are at risk. Zero sum game jobs need to be taxed much more.

2. Firm ethics. Firms have changed the mission statements from serving their customers to maximising shareholder value, cheered on by Nobel laureates such as Milton Friedman. This is repellent to most people. Every CEO and worker now works for himself and not the company. Investment is dropped and share buy back performed to ‘maximise shareholder value’. Mutually owned companies like John Lewis which enable share ownership and representation at the board for all employees are the way to go. Monopolies need to be broken up. If that is not possible, they need to be taxed. All companies should be required by law to consider public interest and board members prosecuted if that is not done. Companies need to be policed.

3. Family Ethics. Obligation to family has been change for that of self. The extended family is no more. Assortative mating keeps well educated families well educated, and the less so educated often times broken. We need to rebuild family obligations in the extended family again and not rely on the state. Encourage 2 parent families for the kids with state support. Help single poor women with support against addiction, mental health, housing and against violent men. Athens NGO Pause has been successful to reduce children who need to be taken care of by the state. Open up cafés near poor estates. Unemployment welfare helps prevents children neglect. Mix the children by wide catchment areas. Provide vocational training. Levy firms for training funds, have a minimum wage. Charge firms for lay-offs. Charge investment homes higher tax.

4. Ethical World. Rescuing other nations, enlightened self interest, help without expectation of return. Stop ‘beggar-thy-neighbour’ policies. Great clubs like NATO are hobbled by the lack of financial commitment by member countries (<2%). IMF degenerates into the rich countries telling rescued countries what to do, understandably to be avoided at all costs. A new group composing China, India, US, EU, Russia and Japan will be useful for collective action. Firms need to be encouraged to invest in poor countries.

Wow there is so much to do. Will we be able to achieve even a portion of all these suggestions, we will be at a much better place. The suggestion about prosecuting board directors if the company harmed ‘public interest’ which probably means everything...

Anyway, some of the suggestions about international investment are actually being fulfilled by Chinese companies. When they make profits I am sure the Western ones will follow. There is hope for us yet!

[Clyn · Rating 5 out of 5]

First of all, I would like to state at the beginning that this is not an entry-level book for beginners in the school of economic thought. I am somewhat of a beginner, however, and so initially I felt was not for me. I generally consider myself fairly educated, and fairly good at understanding complex issues, but i have to admit that this one really pushed me. That being said, I am giving this book 5 start, not necessarily because I necessarily agreed with or even understood all of the opinions of the author, but because it educated me in the economic theory of capitalism and made me really think about my own attitudes and whether they were truly consistent with my core beliefs. It was an uncomfortable experience at times to admit that my actions and beliefs are not always entirely consistent (though I have determined that complete consistency between my ideals and actions is limited by the ethics and motivations of the world in which I live—though I should perhaps adopt some less entitled individualistic positions myself), and it opened my mind to several new ideas that I would have previously ridiculed.

The book jumps right into the economics of capitalism and the theories that describe what drives it as compared to socialism and communism. This was the most difficult part for me to follow. The author assumes an understanding of many economic theories and ideas that he referenced only by name. For me, what was lacking here were a few examples of these ideas, which may have dumbed the book down for the intended audience, but would vastly increase its potential audience. That being said, by the end of the book, I had been able to deduce many of these ideas and references, though certainly not all, and I had to listen to several sections several times before his points sank in.

The book spends most of its pages exploring and explaining how capitalism has become broken since its golden age which he defines as the 1940s to about 1970. He discusses how relationships and reciprocity are the basis for successful capitalism and explains how at its roots, capitalism is failing primarily because of a shift from the ethical family, which encompasses ethical obligations to others that was crucial to the recovery of civilized nations in the wake of WWII, to the entitled individual and the pursuit of self interest, jettisoning any such obligations to family, group, or culture, as its core unit. He explains how these attitudes have crept into the way industry is managed, how political thought has evolved, and how it has arrived now to be subverting nations and world governing bodies. He also discusses the evolution of western civilization as it relates to the realities of thriving cities versus declining rural towns, the unearned advantages of the highly skilled versus the less educated, how these realities have evolved as well as why they are worsening in perpetuity.

I found that I agreed with his assessment of how capitalism has begun to fail and his reasons for it, but I found his solutions more difficult. I attribute this partly to the fact that he is a British economist (and many of the cultural phenomena he referenced are more applicable to the socialized economics and attitudes in England), whereas I am an American whose history of fighting for individual freedoms and rights are more preeminent. A valid point he makes, however, is that ethical reciprocity on which successful capitalism would be based, would involve redefining individual rights in such a way that they cannot be used to excuse behavior that disadvantages others even if such behavior lies within the bounds of the social contract of law. In other words, those with more have an increased responsibility to those with less, and if we are ethical members of the same group, we should have the interests of all in mind. There has to be mutual regard. But somehow, that has to fit in with the individual right to pursue happiness—something I feel the author is not particularly interested in.

A quick example might be helpful. Collier rightly points out that London schools are better funded and produce students with better test scores than do their rural counterparts. His solution is to recruit better teachers in general and legislate putting the best teachers in the rural communities where their skills would better serve the greater good. Early in the book he discusses the fact that the more educated and wealthier families tend to put more effort into assisting their children develop skills that make them better students and ultimately better workers. I think he fails to acknowledge that a lot of the difference seen between these two classes of students is largely effort dependent, whether that be on the part of the parents, the students of both, but is not necessarily tied to the teacher. It may be easier for the wealthy to do this, but at some point, it must be recognized that it takes effort to improve ones lot in life and putting good teachers in classrooms with unmotivated students or parents, is not likely to make a difference. I would also sympathize with the good teacher who chose a career in teaching for the reward of guiding motivated students, who when forced into a setting proposed by Collier would find the desire for which teaching was selected as the profession rapidly extinguished. That will certainly not draw better teachers into the field for sure. By and large,

I find my difficulties with Collier’s solutions to be largely based on the fact that they are effort dependent and are based on principles not possessed by the entitled individual, who he argues is what makes up the greater share of the world population. His solutions assume all are equally motivated to work, learn, sacrifice, etc. and that the effort expended by all is equal, even if it is not as effective or productive. This is just simply not the case. I constantly tell my children that “successful people do the things that unsuccessful people are unwilling to do.” While this can certainly be taken to extremes, it identifies the inherent differences that exist in people’s willingness to work to achieve their goals. I don’t think working hard for personal reward should be suppressed, which is ultimately what I see in many of the proposed solutions to fix capitalism. He suppressed by taxation the rewards of extra effort. The silver lining to such policies however, is that working too much would be curtailed and channeled into other activities which may ultimately result in a happier life! Getting back to effort though, I think most ethical people would not mind increasing their tax obligation to help the motivated deserving poor, but asking them to make the same concession for the unmotivated undeserving poor is completely different. I think part of Collier’s disconnect with me is the proportion of that population he encounters regularly to the proportion that I see.

His solutions begin with creating group identification, which it good in that it would engender the attitudes found in the ethical family—basically reducing self interest at the expense of others. This was at a peak immediately following WWII, but at present is so fragmented, that trust in reciprocity is rare and polarization of group attitudes is the norm. It also depends on management of capitalism by suppressing through legislation or taxation those activities and professions that draw in talented individuals who seek to capture unearned income that offers no benefit to society in favor of other employment that is productive to society. Ultimately it ends with helping redistribute that unearned income (income generated not commensurate with the effort needed to obtain it) by effectively legislating a tax system that doesn’t exterminate growth, while aiding the underprivileged.

I don’t know that it is possible to achieve this with today’s prevailing attitudes, laws, and privileged elites working so hard to maintain their privilege. I think things will have to get so bad, that the sacrifices and attitude changes required are deemed necessary for survival. I guess I’m not as optimistic as Collier. I really wish I were, though.

[Ruby Sapia · Rating 4 out of 5]

Would love it if more "Capitalists" (as in those who have disproportionately benefited from their labor in the form of capital) read this book.
I enjoyed this book, it's not directed towards economists or people in academia, so it's digestible for most people. My big qualm is that Collier shows us a lot of issues, but his solutions don't seem realistic in today's mega-polarized world. His solution of bringing us all together and caring for each other is at odds with the ideals of a huge group of people in the US and UK (the two countries he primarily writes about).

[Simona · Rating 4 out of 5]

“Aktivní stát potřebujeme, ale musí se spokojit se skromnější rolí. Trh potřebujeme, ale musí jej usměrňovat představa smysluplného cíle zasazeného do pevného etického rámce.”

“...rozhodujíci roli hraje právě zkušenost z předškolního údobí: kolem šestého roku už můžeme predikovat, jaké výkony bude dítě schopné podávat na konci povinné školní docházky [...] vklad rodičů [...] hraje větší roli než to, čeho školy dosáhnou za dvanáct let...”

Kniha Budoucnost kapitalismu nám popisuje všetky trendy, ktoré možno pozorovať naprieč celým svetom - rozdiely medzi metropolami a regiónmi, medzi spoločenskými triedami a rozdiel medzi krajinami na globálnej úrovni. Autor nekĺže len po povrchu, ale v knihe dopodrobna rozoberá príčiny týchto javov, čo sa miestami však prelína až s filozofiou alebo polemizovaním. Zaujímavejšou je tak druhá polovica knihy, v ktorej sú predostrené určité riešenia daných problémov, ako napríklad zmeny vo firemnej kultúre, vzdelávacom procese, na trhu práce alebo zdanenie renty z aglomerácie (i keď sa nedá súhlasiť so všetkými - niektoré skrátka znejú až príliš ako utópia, bohužiaľ). Pozitívne hodnotím dobré príklady z praxe - škoda, že ich v knihe nebolo viac. Mohli by tak nahradiť východiskové myšlienky autora o pragmatizme a recipročných záväzkoch, ktoré boli svojim viacnásobným opakovaním v texte miestami až rušivé.