“Capitalism doesn’t work on autopilot. We face a choice between prosperity versus aggression and fear. There is no Utopia. We need pragmatism not ideology”
Sir Paul Collier, a self-proclaimed ‘steward of capitalism’ and author of ‘The Future of Capitalism: Facing the anxieties’ was robust in his defence of the system, but equally honest about its failures and shortcomings in his stirring interview at the House of Beautiful Business.
“Two major social rifts have opened up in the last forty years” he said, “One is spatial — where we have booming metropolises and struggling hinterlands. As markets have globalised they have become fewer and bigger” arguing that it is these effects that have also driven what he called ‘the Brexit mutiny’. “I have made more money on my Oxford house in the last 30 years than the University has paid me as a Professor” he observed citing the problems of the UK’s skewed property value boom. “The second is a class rift where the value of educated and skilled workers has gone up and the value of less educated manual workers has gone down.”
Recalling his own upbringing in Sheffield, a city whose fortunes were built on a seven hundred year old steel industry, he cited ‘The Full Monty’ as a troubling, if entertaining, narrative of what happens to cities in decline. “Cities are natural spatial communities and nations are the biggest spatial communities we’ve built” he continued, which somewhat glossed over the European community I felt. He was worried about the failure of empathy from cities like London to their regional siblings and their hinterlands referencing a journalist who had described London’s relationship to the rest of the UK as “like being shackled to a corpse”.
“When capitalism derails it needs resetting” he explained sharing some sharp insights from UK history. “Bradford in the 1840’s was a hugely productive city…but it was Hell on earth. Choked by pollution, ravaged by Cholera, the average age of mortality was just 19. One of people’s biggest concerns was ‘Am I going to get a funeral?’”
Titus Salt one of the original philanthro-capitalists was its biggest employer, became its Mayor and tried to clean up the pollution and gave much of his fortune away. His funeral was attended by over 100,000 people. It was out of these challenging circumstances that the co-operative movement was formed by the Rochdale Pioneers, at least partly to ensure people got an affordable funeral, and the Halifax Building Society enabled folk to buy their homes.
“The big question today is ‘how to get a productive job without going to London?’ We need to bring productivity back to places and maintain their human value. Place creates social energy by connecting random people and celebrating difference. Our online world creates bubbles and the unhealthy division that led to Brexit”
He cited Edinburgh as the only other UK city with residents that have an annual income above the national average. This is because of “decentralised political power, great tertiary education, a strong cultural brand and a successful city vision to become a major European IT hub”. But he cautioned against the ‘London focus’ and centralisation on aspects like finance, which means that devoid of “tacit knowledge and efficacy a ‘tick-box’ approach is adopted” which is blind to local on-the-ground realities.
“No one ever got up in the morning to deliver shareholder value!” he said of the importance of business with purpose. “Bear Stearns motto used to be ‘We make nothing but money’, to which their employees may as well have added ‘for ourselves’ and we all know what happened to them. Attracting shits who just want to work for themselves is not good for business”.
“We need to reset capitalism on purpose before it blows up” but he cautioned “it’s relatively easy to overthrow a system but it never ends happily” listing Trump, Brexit and the lack of ‘thought-out’ strategies and rage of movements like the Gilets-Jaunes. “The answer [however] is not to suppress the mutineers but rather to address their concerns. History doesn’t come with a happy ending, but it does have happy changes.”
“No one stands up at the moment and says the system is working. No one. There is no resistance. You only get pushback from the political extremes — the nuts on both the left and the right”. He suggested the place to be is the ‘hard centre’ not the ‘soft bullshit’ and emphasised the need for practical change.
Finally on oligarchical wealth he noted “Unlimited personal wealth is not an inherent part of capitalism” and when some ultra-rich are asking to be made to pay more tax it reveals the ‘absurdity’ of the current situation. “Tax plays a key role in sharing the benefits of productivity.”
It was a thought-provoking contribution alongside the perhaps more maverick views of Anand Giridharadas and Douglas Rushkoff who had preceded him, but what they all agreed on is the need for some pretty radical reform and redistribution. More of the same is simply going to give us more of the same, and I think we’ve all had more than enough of that.
Ed Gillespie is the author of ‘Only Planet’