A good question: Is capitalism broken?
Each month we ask one question, and get four answers.
This month: Is capitalism broken?
‘For capitalism to work, our leaders need moral values’
The answer depends on what one means, first by “capitalism”, and second by “broken”. Given the prevalence of doublespeak and buzzwords today, we should be suspicious of all terminology and ensure at least some joint understanding of key words before plunging into any discussion. So here’s my view:
1. Capitalism: This exists and has existed in many types:
(a) “ancient capitalism”, in the control of the merchant class;
(b) “liberal capitalism”, going back to the period of the industrial revolution in England;
(c) “third way capitalism” which goes back to the period when the worst excesses of liberal capitalism began to be addressed (first, though weakly, in the Victorian era);
(d) “state-directed capitalism” such as we see in China;
(e) “global capitalism” of the sort we have today, variously described as “robber capitalism”, “crony capitalism” and “casino capitalism”.
2. Broken: When people raise the question of whether “capitalism” is broken, they are motivated either from the “left” (in which case, they feel that “capitalism” should be abandoned for their own ideal solution) or from the “right” (in which case, they feel that “capitalism” should be restored to its “pristine” condition – and there are various viewpoints regarding what that might involve).
Certainly the form of capitalism that we have right now isn’t working so far as the vast majority of the world is concerned.
To enable any variety of capitalism to work for the majority of people, what is needed is the re-establishment of moral, ethical and spiritual values in society as a whole, but especially among today’s leaders (the “one per cent” or “the establishment”).
Values of one sort or another have been established, for relatively short periods of time, as a result of the impact of nationalism or of ideologies such as Nazism and Marxism. However, the only sustained basis for the rise of humane values has been the rediscovery of biblical teaching, which started as a result of the Protestant Reformation from the 16th Century.
As a result of the Western elite’s mass popularisation of atheistic and evolutionistic rationalism since the second world war, the impulse to Protestant reform was reversed – and the subversion of biblical values is the source of our current global malaise.
Rationality we need; rationalism is a destructive delusion. Fortunately, rationalistic atheism has now widely lost credibility.
The question is: what sort of value system will fill the current global vacuum of values? The possibility of a rational, humane and happy world is dependent – till Jesus the Lord returns to establish His rule of righteousness on a renewed earth – primarily on what values come to the fore.
Prabhu Guptara is executive director of organisational development at Wolfsberg, part of UBS investment bank and visiting professor at several universities
‘Capitalism is the engine of injustice’
If capitalism is “broken”, there is at least an implication that it could be made whole and functional. If that is to be done, we must ask how those to whom it has delivered benefits have for so long stifled the voices of its victims and how we might shift the balance towards justice.
A great many people throughout the world have experienced a higher standard of material wellbeing under capitalism than they would – or until quite recently did – receive under centrally-planned and repressive socio-economic systems. But all economic systems make bad masters. If they are to be good servants, we must not permit ourselves to become self-serving and blind to the faults of our own creation.
Levels of inequality are the clearest indicators of the health of capitalism. Without equality there can be neither liberty nor justice. Consumer capitalism in 2013 is the engine of profound injustice and with that comes a distortion of personal, societal and international relationships. In the UK, the minimum wage delivers less than £13,000 a year for a 40 hour week. The average annual salary for the CEO of a FTSE 100 company is £5 million. Wealth and power are indivisible and leave the poor and powerless victims of narrowly defined and often exclusive successes. One example will serve: HSBC reported a profit of £13 billion in 2012. In 2013, it announced its intention to axe 4,000 UK jobs and switch them to Asia. The rising tide which capitalism’s defenders describe as “lifting all boats” simply enables the biggest and fastest vessels to sail away without a backward glance.
When the Occupy movement filled the news in 2011, we caught a glimpse of the possibility of a social order of flatter structures with the potential to create a space where people could come together to formulate cooperative and sustainable approaches. For a tantalisingly short time, we were reminded that the grace of commonwealth and stewardship could challenge the idolatrous worship of unexamined economic power.
Nothing illustrates more clearly the “broken” nature of modern capitalism than the concept that it is ineluctable. As with all the constructs of humankind, capitalism is capable of repair and reform.
Its brokenness, manifest in the failure to understand that the distribution and use of its profits and goods is at least as important as their creation, demands more of us than fatalism.
A capitalism managed with moral vision and integrity could serve us well. Its capacity to meet the natural human desires to innovate and aspire will always be attractive. We created it: do we have the will and the vision to regulate it so that all people are enabled to flourish?
Jill Segger is a Quaker and an associate director of the Ekklesia thinktank
‘Capitalism lifted 500 million out of poverty in the 1990s’
We ask because it feels as if the system has broken. Certainly the assumption that in most years wages would rise faster than prices has stopped being true: on average we now get poorer each year. And it no longer looks like a blip. For years some Christians have been saying we should not chase constant economic growth, but now growth has stopped we don’t like it. If we are one of those for whom job prospects seem to have completely disappeared, it is more than an inconvenience.
However the question is not that simple. When a machine breaks down, sometimes the wise thing to do is to scrap it and try something else. Sometimes the wise thing is to repair it. How broken is capitalism?
The capitalist system has had lean periods before, but in the long run has proved remarkably successful at increasing our choices. Most Reform readers fill their homes with devices, from microwaves to remote-controlled TVs, previously unknown. For many of us, “austerity” means we have to go without a few of those things our grandparents never imagined anyone needed.
If we lift our eyes from a British perspective to a global one (an idea God might approve of) we notice capitalism managed to lift 500 million people out of absolute poverty during the 1990s. No alternative system has achieved anything comparable.
So maybe the task is to repair. It will be a long job. So a glance at Africa or our inner cities should be enough to underline the need to be vigilant about the share for the poorest. Especially when the size of the cake is shrinking, Churches must challenge policies that increase the width of the slice taken by the better off.
In Britain, the banking system has been a focus for concern. To repair our capitalism, banking needs to be seen principally not as the engine of capitalism but as the oil that allows the engine to function. Let investment bankers enjoy taking risks but keep that separate from the basic infrastructure that needs the ultimate backing of the taxpayer. Bonuses for failure are outrageous; although before we join in demonising all bankers, we might want to notice who serves as church treasurer.
The most fundamental Christian contribution to repairing capitalism might be to look past governments, the regulators and the EU to human hearts. In the UK the banking system seized up and nearly precipitated disaster when the banks’ arrangements for short-term lending to each other stopped functioning. It happened because the banks ceased to trust each other. In the end, capitalism is about relationships.
The Bible may be silent on hedge funds and catastrophe bonds, but if we are to repair capitalism some very old rules need to be cornerstones. Nothing is more pertinent than “Thou shalt not bear false witness”.
John Ellis is moderator of the United Reformed Church General Assembly and a former economist at the Bank of England
‘It’s not broken, it’s obselete’
The Bible, says Walter Brueggemann, starts out as a liturgy of abundance: it revels in God’s creation, an orgy of overflowing profusion. Psalm 140 celebrates the resilient overabundance of creation, rejecting anxiety and fear. Psalm 150 counsels abandoning oneself to God, rejecting the fearful impulse to control resources.
Genesis, Brueggemann continues, recalls that it was Pharaoh who dreamed of famine in the land. In this scarcity the ruler of this world seizes the opportunity to control the food supply (the very first example of Naomi Klein’s Disaster Capitalism). A temporary misfortune is craftily managed to turn the people into slaves. Soon, all the land belongs to Pharaoh except that of the priests. Even he needs divine vindication for his oppressive strategies. Genesis then, witnesses the birth of a counter narrative to the liturgy of God’s abundance: the myth of scarcity.
God takes the people into a desert devoid of power hierarchies. The people are invited to remember the liturgy of abundance through the lesson of manna: the bread is free; it is given each day; banking and investing destroy it. In addition, Sabbath teaches rest from the struggle for more. Jubilee teaches forgiving debt. “God’s abundance transcends the market economy,” says Brueggemann, and to this day we are torn between the liberating gospel of God’s abundance and the debilitating power of our belief in scarcity.
Capitalism is the full flowering of the myth of scarcity. Like the seed that fell on hard soil, it promises abundance, but delivers destruction: think of retreating glaciers, global warming, mass unemployment, hunger, scarcity, militarism, austerity for the 99%, eye-watering profits for the 1%.
Capitalism is “ultimately a system of power and exclusion”, concludes David Graeber. No surprises there. Its default position is to push the nutrient to the top while the roots feed on the poisoned assumptions of scarcity, competition and perpetual growth. The mono-crop economic system survives only by destroying alternatives.
The Gospel and New Testament call us to remember the ancient liturgies of abundance. We see Jesus-shaped communities created in the image of an inexplicably generous God. Communities can slow down, relax, and let go their anxious need to control. They can learn to share, since the God, from whom neither death nor principalities can separate them, gives all they need. They forgive debt. They share all. The Liturgy of Abundance is restored. Into this re-membered community, capitalism becomes surplus to requirement.
Capitalism, then, is not broken. It is simply obsolete. The practice of the liturgy of abundance reveals capitalism for what it is – a scarcity-based economic system that is quintessentially antithetical to the blessings of the extravagant God.
Kevin Snyman is chaplain to OccupyFaithUK
This article was published in the June 2013 edition of Reform.