The author describes this as a personal testament; certainly it is not an economics textbook. His 2007 best seller, The Bottom Billion, examined the reasons why so many countries still had large numbers of people whose incomes had not increased. With this book, the focus is on the way inequality is increasing, and what could be done to redress this. The author looks back at the country Britain was in the post war period up to the 1970s. He explores the impact of increasing knowledge and rising productivity and addresses the consequences of recent developments that show that capitalism is increasingly based on greed. His writing draws on his accumulated understanding of economic problems but also digs deeply into political and sociological issues.
Collier’s wide view takes in capitalism and populism, the marginalised whose skills have lost value, the left-behind and the process of “bulldozing communities which had given meaning to lives”. He refers frequently to reciprocal obligations, those customary habits whereby friends, neighbours and families supported each other in times of difficulty. He sets out to demonstrate that a culture of moral purpose is needed in order to steer our society towards an ‘ethical capitalism’ based on values.
Part 1 of the book starts with The New Anxieties, set out above. Part 2, Restoring Ethics, covers the potential changes that states, businesses, families and the world could implement so as to create significantly improved lives for the disadvantaged. Collier has a vision of a world in which “moral purpose” is at the heart of policy making.
Part 3, Restoring the Inclusive Society, addresses the causes of inequality, the growth of the very big, prosperous cities and their impact on those cities and towns that have lost out in the globalization process. He explores the case for taxing the metropolises and those who have benefitted from the appreciation of urban land. He considers the way in which the deskilling of many jobs has left many employees without self-respect and with few sources of pride in their work. The way the housing situation has developed, and the many possible ways forward, figure here.
This section of the book concludes with a survey of the effects of globalization. “The net effects are positive, but globalization is not a unified phenomenon that has to be adopted wholesale or rejected in its entirety. It is a ragbag of economic and social changes… the task of public policy is to encourage…what is unambiguously beneficial”. Policies can be devised to compensate identifiable groups facing significant losses and to discourage global activities that will redistribute income in ways that cannot be compensated.
Part 4, Restoring Inclusive Policies, suggests political changes that will appeal to some but not others. It addresses the problems associated with polarized politics, suggesting that UK leaders should be elected by MPs rather than party members; MPs are more likely to select the ablest leaders and this will tend to shift parties back to the centre. Again, this chapter stresses the importance of shared identities and a shared sense of belonging, as essential elements in the creation of a humane society that ultimately benefits all.
Throughout the book, the author cites the big thinkers of the past and recent times as well as referring to current research – the five pages of bibliography attest to the careful construction of the author’s views. He perceives both Marxism and “capitalism driven only by greed” as equally mistaken. He sees the fruits of capitalism as increasingly beneficial to a relatively small group of people, so “generating humiliation and division but not mass prosperity”. The conclusions draw on a very wide range of sources; few thinkers range so freely across the available research. One thing is puzzling – the absence of any reference to corruption, surely a major factor in our failure to prevent rising inequality.
The Future of Capitalism got into the FT’s list of Books of the Year, last December. Martin Wolf selected the Economics books. Perhaps he should have the last word. “Rejecting the illusions of the ideologues and the populists, he (Collier) puts forward pragmatic, provocative and perceptive ways to deliver widely shared prosperity, by restoring an ethical basis to our national politics, companies and families.”
Nancy Wall has stopped teaching and writing textbooks but is still a trustee of the EBEA and the Reviews Editor for this journal.