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20190512 – The Future of Capitalism


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The main idea is to demonstrate that current increase in political division all over the western world between left and right is destructive to society and should be overcome. In order to achieve this author suggests establishing new system that he calls Social Materialism, which he defines as mostly capitalist system with big government that plays active role. This system would be based on everything “ethical”:  State, Firm, Family, and overall world, meaning recognition of the network of reciprocal obligations between everybody and everything.


Part One: Crisis

  1. The New Anxieties

It starts with discussion of contemporary crises of Western societies when globalization and technology led to deterioration of quality of life of less educated people mainly in working and lower middle classes. It caused these people to give up on existing long-term arrangements and practically rebel against elite in power. This rebellion so far is within democratic framework, leading to election of Trump and other similar figures, but with increasing elite resistance, nobody knows how far it will go. Author presents his own story to demonstrate familiarity with both camps: successful and unsuccessful in the new economy.  He then discusses success of social democracy in XX century with its welfare state, unions, big government, and intellectuals’ activity in politics that grew during this period.  Author ends the chapters with Manifesto of what he calls Social Materialism – the mainly capitalist system in which government plays very active role in economics and social life, with tax policy “restraining powerful”. As usual for such cases, author claims pragmatic solution and presents his ideology as non-ideology crossing left-right continuum.

Part Two: Restoring Ethics

  1. The Foundations of Morality: From the Selfish Gene to the Ethical Group

This starts with typical complain that capitalism provide for material wellbeing, but is immoral and does not provides for meaning of life.  Then it goes to discuss “Wants vs. Oughts” where author talks about seemingly contrarian demands between economic and moral objectives, concluding that both are needed and key is in the balance.  Then he moves to emergence and wide use of reciprocity in human relations, which is developed evolutionary, somehow coming to conclusion that conservative philosophy could not be right because it support existing institutions, which are necessary dysfunctional because the world is changing all the time. The final part is about obligations to each other and to “society” and development of norms and organizations to make all this work.

  1. The Ethical State

Author’s philosophy is pretty much demonstrated when he states that “New Deal” was ethical and people recognized this. This follows by brief panegyric to Keynes, glorification of social democracies (ethical states) circa mid XX century and lament on their decline and fall. Author seems to see the cause of this fall in division of population into well educated and prosperous in market economy and less educated who fail to find place in it. Ideologically population divided into libertarians on one side and identity and rights obsessed leftists on another. Both groups undermined common identity one in the name of unified global market, another in the name of ever multiplying groups of victims, and both successfully suppressing conservatives who were protecting this identity, albeit in outdated format of nation and religion. Then author proceed to look at ways to restore common identity and patriotism in order to return to “ethical state”.

  1. The Ethical Firm

Here author moves to the idea of ethical firm by which he seems to mean the firm that exist not in interests of people who owns it, but in interests of somebody else who cares about some other, more important things than returns on investment. He also discusses problems with hired management who care about their own benefit, even if it would kill the business.  Author proposes rethinking role of big firms in society and changing legal constrains on its management. He discusses in details how and why regulation and nationalization do not provide effective solution for ethical firms and suggests to look at 3 other approaches: Taxation, Public interest representation on corporate boards, and Policing public interest.

  1. The Ethical Family

The chapter about family starts with discussion of how it used to be highly normalized foundation of society until 1950s. Then came shock at the top when birth control changed sexual relations. Then came shock from expansion of education that somewhat led to loss of respect to older people. Then came shock at the bottom from technology and globalization that deprived lower classes not only of income, but also of self-respect from a job. This led to social divergence and dissolution of traditional family at the bottom. Author suggests that it is possible to restore “ethical family” through commitment technology and extended family that include 4 generations due not increased life span.

  1. The Ethical World

Here author kind of combines ideas of “ethical everything” in 3 precepts:

Precept 1. Recognition of obligations to other societies that are not dependent upon reciprocity: the duties of rescue. These cover obligations to groups such as refugees, those societies facing mass despair, and those lacking the rudiments of justice. Precept 2. The Construction of more far-reaching reciprocal obligations among chose countries willing to go further.

Precept 3. Such reciprocity is supported by recognition of common membership of a group, based on common purposive actions that further the enlightened self-interest of each participant.

Then he discusses erosion and potential rebuilding of such ethical world.

Part Three: Restoring the Inclusive society

This is pretty typical discussion of different aspects of contemporary division of population into winners and losers who benefit or fail to benefit from huge changes in methods of production and distribution of goods and services.

  1. The Geographic Divide: Booming Metropolis, Broken Cities;

After discussing diversion between prosperous metropolises and declining towns author proposes a number of possible solutions for specific problems, but ends up stating that none of them ready for implementation and need careful experimentation to define their viability.

  1. The Class Divide: Having it All, Falling Apart;

For this author suggest implementing “Social Materialism” when state cushions family with practical support could fix these problems by substituting what author calls “Social Paternalism” when state policies family.

  1. The Global Divide: Winners, and the Left Behind;

This is a bunch of Mea Culpa that author offers as professional economist: in regard to: Trade, Regulations, and Migration. The final professional Mea Culpa is in regard to economic profession glorifying globalization and closing its eyes on its negative effects.

Part Four: Restoring Inclusive Politics

10: Breaking the Extremes

This is the author’s lament that capitalism divides people and that right now everybody seems to be moving to extremes. He calls to establish process that would move main parties to the center. In order to do this he suggest to leave selection of leaders to party insiders and generally move into direction of decreasing divide in wealth and everything else at the global level, but most important is to build shared identity. He believes that the period of left’s dominance by Utilitarism and Rawlsian ideas of redistribution and victimhood and right’s dominance by ideas of individualism is coming to the end and the future would bring movement of left to their communitarian roots and right to restoring their “ethical bearings” and all happily moving in non-existing past when there was little division and no ideological struggle.


I think that idea of “social materialism” is plainly not realistic because it demands from people some abstract commitment to reciprocation to others even if these people to not include themselves and this other in one entity. I believe in evolutionary developed duality of humans with one side based on individual survival and another on survival of the group one belongs two. The complexity comes from existence of multitude of different groups that individual belongs to and frequent contradictions between objectives of these group. The idea that some bureaucratic entity such as state or firm could be made “ethical” meaning it would start caring for outsiders is not supported by the history. I think that the solution is not change in people or even their attitudes, but rather in change of group structures and hierarchies that would minimize contradictions and perhaps even reconcile objectives of different groups to extent possible so the resource production and allocation would be conducted on non-zero sum basis.


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