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Capitalism Unleashed. Finance, Globalization, and Welfare. the late Andrew Glyn . Free enterprise is off the leash and chasing new. Andrew Glyn; Oxford, UK: Oxford University Press, , pp., $ In Capitalism Unleashed, Andrew Glyn takes stock of the effect of 25 years of liber-. In his new book, Capitalism Unleashed, Andrew Glyn attempts to explain how capitalism moved from the crisis of the s to recovery in the.
But be that as it may - at least it was an analysis. What is lacking in this latest book by Andrew is just that. In Capitalism Unleashed, the reader is given, in Andrew's own words, "a short history of how this transformation" from the crisis of capitalism of the s turned into a successful capitalism of the s and s, with fewer economic slumps, rising profitability, a significant weakening of the labour movement and the end of the Soviet Union and its replacement by capitalism.
A series of chapters describes how capitalist leaders adopted new policies that rejected accommodation with the labour movement and the working class, crushed the trade unions, reduced state spending on unproductive and unprofitable social welfare, and privatised and emasculated the state sector.
Also, in one of the most interesting sections of the book, Andrew shows how capitalism was launched on a new phase in its history as it became truly global with the emergence of the economic powerhouses of China and India and the widening of "free trade". This globalisation coincided with the introduction of new technology and the extension of the influence and role of finance capital globally. All this is a very useful if in parts opaque account of the history of capitalism in the last 25 years.
But the weakness of the book, in my view, is revealed in Chapter Six entitled Growth and Stability. Here Andrew asks the question: if capitalism managed to remove most of the shackles of the labour movement and state regulation over its workings in the s and s, why did it fail to grow as fast as, or faster than, in the Golden Age of the s?
Capitalism had been unleashed, but it had not proved more dynamic. But Andrew's answer to his own question is not really forthcoming, except to suggest that maybe the economic dynamism has simply shifted from the more mature capitalist economies of the OECD to China and the emerging world. Also, because there is no analysis of why capitalism managed to turn things round and begin a period of rising profitability and success in capitalist terms after the crisis period of the s, there is no insight on where capitalism is going now.
So slightly slower but more stable economic growth under capitalism in the last 25 years hardly constitutes a crisis for capitalism in the rich countries, Andrew admits.
As a result, he seems to conclude that there is no reason why the current scenario for capitalism will ever change, except for a few thoughts on China breaking down, a lack of resources and environmental problems or the collapse of America's consumer boom somehow.
Andrew seems somewhat at a loss on the direction of capitalism from here Indeed it is, but that is part of the theoretical task, is it not?
Perhaps, if he had returned to the approach of his book in the s, which presents a theory of capitalist accumulation based on a law of profitability, he might have found some answers.
In my view, the last 25 years of capitalist success has been based on a recovery in profitability for the very reasons that Marx explained could happen. However, the next couple of decades will see a reversal of that process because Marx's most important law of the motion of capitalism will exert itself. This means that, to some extent, there is the possibility of a positive sum policy stance which reduces inequality and raises efficiency. A paradigm case would be a policy to improve the educational outcomes amongst children of disadvantaged families so that they are able to earn more as adult workers, an outcome which addresses both equity and efficiency concerns.
The implication is that one can have globalisation or equality, but not both. Moreover, since growth allegedly depends on integration into the global economy, one had better choose globalisation. Andrew carefully examined these theses emerging around globalisation and pointed to their limitations. As a matter of brute fact generous welfare states are not in general collapsing or receding. The key issue, Andrew argued, is whether a left government can put together and sustain a distributional coalition willing to bear the costs of a generous welfare state and income redistribution.
If not, then anticipation of the inflationary pressures generated by higher taxation and higher public spending will certainly lead rapidly to capital flight and this will force a reversal of policy. But this has always been the case.
It is, at base, a political constraint, not an economic one. Accordingly, Andrew was consistently interested in the record of countries with corporatist bargaining systems which have the potential to enable governments to put together and sustain such distributional coalitions. These countries not only include the usual Scandinavian suspects, the Netherlands, Germany and Austria, but some more surprising cases where corporatist arrangements represented something of a new departure, such as Australia for a time in the s and s and, not least, the Republic of Ireland.
In one recent paper, Andrew favourably contrasts the corporatist experience of Ireland with the effects of bold neo-liberal experimentation in New Zealand Glyn, One of the striking features of this volume, however, is how it points to what Andrew saw as the limits of social democracy in general and New Labour in particular.
First, while some governments had used corporatist style arrangements effectively to reconcile egalitarian concerns with economic growth, the record of left governments in general from is not in all respects a good one. Specifically, left governments in OECD countries have on average reduced inflation at a higher cost in terms of unemployment than in the OECD as a whole.
This does not mean that in government, these social democratic parties can do nothing different from the right. As Andrew put it: The Left can still intervene in valuable ways to stem the tide of rising inequality — more in-work benefits for the low-paid, protection of the most vulnerable when welfare states are reformed, targeting the extremes of inequality of opportunity which are obviously economically inefficient.
One reason, and the focus of much of our discussion thus far, is that it has the capacity to deliver better — that is to say, more just because more equal — distributional outcomes within capitalism compared to the capitalism of the New Right.
This is not to be sniffed at. However, another reason to prefer social democratic capitalism is that it also has the capacity, in meeting this first objective, to create the conditions under which basic questions about the ownership and control of capital can come onto the table. Whether or not Andrew remained, in some sense, a Trotskyist, is not really a very interesting question. But what certainly is true is that he retained from the New Lefts of the s an underlying commitment to a democratic economy, implying popular control over the flow of investment Cohen, Social democracy had edged confusedly onto the terrain of asserting democratic control in this area in the s and s, but it had since beat a wholesale retreat.
Capitalism Unleashed: Finance, Globalization, and Welfare
Given these reservations about social democracy in general, it is not surprising that Andrew also expresses some reservations about New Labour.
Rather than experimenting with new forms of corporatism, New Labour seems committed to a model of a decentralised, deregulated labour market. We may call this the flexibility for employment thesis: rapid employment growth requires deregulated labour markets and greater wages inequality.
As part of his ongoing interrogation of the various claims associated with the equality-efficiency thesis, Andrew examined the evidence for the widely asserted links between labour market deregulation, wages inequality and employment growth and argued that the evidence for them is in fact much weaker than is generally assumed Glyn, b, Baker, Glyn, et al, The book examines the results of the neo-liberal turn of the s, future challenges, and outlines a possible way forward for the left. What have been the results of the neo-liberal turn?
Capitalism Unleashed : Finance , Globalization , and Welfare
Output per head has in fact grown more slowly in the period in the USA, Europe, Japan and the OECD as a whole than it did in , , or , although the rate of growth is within the normal range for the capitalist world since Glyn, , Growth has also been associated with the emergence of new imbalances.
In particular, growth in the USA was driven in the s and resuscitated in the s by means of huge consumer booms which have pushed the US into persistent balance of payments and now budget deficit. How the US and world economy will adjust in the face of these developments, and how painful the necessary adjustment will be, remains unclear. More generally, financial deregulation has led to greater exchange rate volatility and instability within the financial system.
Moreover, in those countries where neo-liberal policies have been pursued with particular vigour, such as the UK and the US, there has also been a significant increase in income inequality Glyn, , At the point of production, the intensity of work increased in the s and s and, in the US, the trend towards a reduction in working hours, which we saw throughout the advanced capitalist countries for much of the twentieth century, has stalled.
Neo-liberalism is pushing us towards a world of insecurity and long hours work, compensated by unsustainable consumerist bingeing see also Schor, , Moreover, the system faces massive challenges in the years ahead. One challenge, of course, is environmental. We have not mentioned environmentalism so far, but Andrew turned his attention to this topic in the early s, co-editing a volume on the environmental constraints on growth Bhaskar and Glyn, Thus far, environmental constraints do not seem to have played a significant role in constraining growth Glyn, , — , but they could do so to a much greater extent in the future.
Another, related challenge is posed by the growing role of newly industrialising countries, in particular China, in the world economy.
Somewhat correcting his earlier scepticism about the significance of globalisation, Andrew argued that the entry of nations like India and China into the world capitalist economy could have major repercussions for the affluent capitalist democracies: there is the impact of surplus labour in Chinaand elsewhere, significant segments of which will be highly educated but with much lower wages than in the North.
Access to this cheap labour could encourage a much higher level of direct investment from the North, in effect an investment drain away from the rich countries. In effect the capital-labour ratio would decline on a world scale, by one-third or more according to one estimate, as the vast reserves of labour in those countries become inserted into the world economy.
The result could be a major fall in the share of wages in the rich countries as workers find their bargaining position weakened. The political consequences of such developments are hard to foresee.
Growing demands for forms of protection for Northern workers from Southern competition seems very probable. Andrew proposes a version of the second strategy, arguing that social democracy should take seriously the proposal for a Basic Income, a universal and unconditional income payment to all citizens Glyn, , — A Basic Income would not only help to maintain the living standards and bargaining power of the most vulnerable workers in society, but would facilitate a general reorientation of social activity away from the formal production-consumption system towards more intrinsically satisfying and environmentally friendly activities.
What relevance do they have for social democrats looking to the future?
This is the lesson of the period from the s to the s. It is also well-placed to identify and harness certain complementarities between egalitarianism and capitalist efficiency.
Resurrection of the Rentier
His view of New Labour was that it did have the potential to produce some gains for the disadvantaged, and to identify and harness some of these complementarities, but that its resistance to corporatist arrangements weakened its ability to construct and hold together the kind of distributional coalitions necessary for significant redistribution.
Of course, like any committed egalitarian he wanted the world to be a better place and, as we have seen, this arguably led him into at least one episode of wishful thinking. Orwell had a quite a few such episodes.
Nevertheless, to read the average work of left commentary and then to pick up a book or an article by Andrew is to enter a different intellectual world. What are the institutional conditions for this? At what point must egalitarians be prepared to challenge fundamental aspects of capitalist society, such as elite control of investment flows?
Are social democrats willing to make such a challenge when it becomes necessary? If so, how do they intend to rise to it? Only if we confront these questions can we have a social democracy without illusions. References Andrews, G. Armstrong, P. Atkinson, A.
Bhaskar, V. Blackburn, R. Bowles, S, Gordon, D. M, and Weisskopf, T. Brown, G. Miliband ed Rethinking the Left, Cambridge, Polity. Cohen, J. Miliband, D. Coutts, K, Glyn, A. Giddens, A. Glyn, A.In his most well known book, written back in with Bob Sutcliffe British capitalism, workers and the profits squeeze , Andrew explained how the Golden Age of modern capitalism came about from to and gave an analysis of why it came to an end and capitalism started to exhibit the symptoms of chronic crisis in the s.
The book examines the results of the neo-liberal turn of the s, future challenges, and outlines a possible way forward for the left. Rising unemployment reflected the incipient crisis related to the decline in profitability and the slow-down in accumulation. This means that, to some extent, there is the possibility of a positive sum policy stance which reduces inequality and raises efficiency. These countries not only include the usual Scandinavian suspects, the Netherlands, Germany and Austria, but some more surprising cases where corporatist arrangements represented something of a new departure, such as Australia for a time in the s and s and, not least, the Republic of Ireland.