A lesson in trying to stop the capital rot

Conservative Capitalism: the Social Economy - The Market Economy and Christian Ethics - Fair Shares
January 21, 2000

Since Francis Fukuyama proclaimed the triumph of the capitalist system over its erstwhile 20th- century competitors in 1992, there has been a period of intellectual soul-searching about the problems and sustainability of this system. Views vary as to whether or not there is a "legitimation crisis" facing the global economic system. Recent protestors in Seattle and the City of London proclaimed that there is. While a few might sympathise with their extremism, many more are open to a considered reflection on the ills of the modern economic system and what, if anything, can be done about them. Interested readers will find much to enlighten in the three books reviewed here.

Timothy Gorringe's book is an accessible introduction from a theologian; David Reisman's book is a philosophical work from an economist; while Peter Sedgwick writes as a theologian interested in analysing the practical responses of the churches.

Gorringe jolts us out of intellectual indifference to the capitalist economic system with a powerful, fact-filled polemic against economic injustice. His text is taken from the prophet Amos: "Seek good and not evil, that you may live." We must reform the system to ensure a fairer distribution of resources because our current course is unsustainable in a simple Malthusian sense.

The next chapter lists the reasons for doubting whether capitalism can be sustained: globalisation is acting to destroy local communities; income distribution is worsening; the number of children living in poverty is rising; the world can sustain a mere 2 billion people at the level of consumption of the average western European.

Next, Gorringe focuses on evidence of environmental unsustainability. He challenges the conventional orthodoxy that resources have expanded to meet rising demands in the past and therefore can be expected to do so in the future.

Chapter four focuses on the distribution of income. The income share of the world's poorest 20 per cent has fallen since 1960. Third-world debt with its associated consequences is highlighted, as is the unfairness of increasing western protectionism led by the United States. In chapter five, the attack turns to transnational corporations and global finance. Powerful institutions and investors are represented as neo-colonialists forcing developing countries to liberalise their economies and produce cash crops.

The effect of this is to prevent domestic support for indigenous industry and to raise food prices for the poor. At the same time these economic actors manipulate the political system in their home countries to lobby for further liberalisation. Gorringe considers the possibilities for a technological fix (the orthodox hope) and more radical solutions. His view is that a sufficient fix will not emerge and that a steady-state economics is required.

The approach of Reisman is in marked contrast to that of Gorringe. Reisman provides a carefully measured account of the key intellectual work, examining the relationship between markets and morals.

The theme of the book is that social life is a mixture of capitalism that is inherently forward-looking and individualistic and conservatism that is rooted in the past and supports fidelity, social obligation and is biased towards the status quo.

Reisman begins by examining choice as the basis of capitalism and inductive conservatism, whereby the future is guided by extrapolation from the past. He argues for an economics that: takes the social perspective seriously (Karl Polanyi); recognises the role of convention (Andrew Schotter); is honest about the importance of history in shaping economic development and the fact that whatever is in the economy is not necessarily best (Friederich Hayek); and where society as a whole can pre-commit to certain actions (or institutions) that are then taken as given by individuals (Amitai Etzioni).

Two chapters focus on the ethical forces shaping economic behaviour. Altruism is a fact of life, whether it is rational or part of learned behaviour, and Reisman notes examples where wealth can be enhanced through the application of moral principles such as trust. He discusses the (conservative) institutions that contribute to social capital - the family, kinship and ethnicity, the locality, the business network, state provision, church and school. In the final chapter he, disappointingly, hedges

his conclusions - conservatism may be morally good or bad and it may or may not complement capitalism. Questions of whether society should more tightly regulate the economic system and how this might be done are left unanswered.

Sedgwick's book lies somewhere between the heavy intellectualism of Reisman and the passion of Gorringe. Sedgwick examines how the church can engage with and challenge an economic system that is so radically reshaping human identity, often in ways that are detrimental to the well being of those forced to operate within it.

Sedgwick begins with a consideration of the work of Jurgen Habermas, who argues that society is no longer developing in the light of tradition, differentiated cultures and personality. Some theologians have attempted to make sense of this society, through challenging it (liberation and feminist theology), working with it (industrial mission) or calling on the church to model something different.

Chapter two traces the development of consumerism. Consumerism is a displaced search for identity from the religious vocation found in work in previous centuries to a combination of hedonism and self-expression in consumption. Sedgwick examines the evolution of the Protestant work ethic and the impact of globalisation. The work ethic is in decline and persists only among a privileged minority (including academics) who enjoy work. Sedgwick claims that Christian theology needs to adjust to the end of the work ethic, advancing globalisation and the existence of many poor-quality jobs. In the light of the failings of the global capitalist system, the author raises the issue of whether churches should oppose or try to reform the rise of capitalism.

Later he focuses on a number of critical church reports on the consumer society. Particular mention is made of a pastoral letter by the United States Roman Catholic bishops in 1986 titled "Economic justice for all". This concluded that the main issues to be tackled were lack of good jobs; worsening income distribution; lack of planning to support family life; and the unfairness of the global economic system towards developing countries.

Sedgwick concludes that churches have made a significant response to recent changes to the nature of paid work. However, he notes that there is still the need for a theology of work that can be fulfilling and offer the possibility of making society more humane.

Michael G. Pollitt is lecturer in business economics, University of Cambridge.

Conservative Capitalism: the Social Economy

Author - David Reisman
ISBN - 0 333 77282 2
Publisher - Macmillan
Price - £52.50
Pages - 7

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