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The Future of Capitalism

Facing the New Anxieties

By Paul Collier
12-minute read
Audio available
The Future of Capitalism: Facing the New Anxieties by Paul Collier

The Future of Capitalism (2018) offers a candid analysis of capitalism that calls for a return to communitarian ethics to mend rifts between families, communities and nations. Diagnosing the failings of modern liberalism, Paul Collier proposes the reintroduction into economic thinking of ethical concerns. He also suggests pragmatic policies that might forge a capitalism that works for everyone.

  • Students of political science and economics
  • Policy makers interested in cultivating a new center left
  • Skeptics of capitalism’s potential

Paul Collier is a world-renowned economist and author of the award-winning The Bottom Billion (2007). Formerly director of development research at the World Bank, Collier is professor of economics and director of the Center for the Study of African Economies at Oxford University.

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The Future of Capitalism

Facing the New Anxieties

By Paul Collier
  • Read in 12 minutes
  • Audio & text available
  • Contains 7 key ideas
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The Future of Capitalism: Facing the New Anxieties by Paul Collier
Synopsis

The Future of Capitalism (2018) offers a candid analysis of capitalism that calls for a return to communitarian ethics to mend rifts between families, communities and nations. Diagnosing the failings of modern liberalism, Paul Collier proposes the reintroduction into economic thinking of ethical concerns. He also suggests pragmatic policies that might forge a capitalism that works for everyone.

Key idea 1 of 7

The erosion of social democracy has left us with a morally bankrupt capitalism. 

In the decades following the Second World War, capitalism created a time of extraordinary economic growth that was enjoyed across class boundaries.

Following the Allied war efforts, people felt a new sense of solidarity and a shared national identity that resulted in a commitment to helping each other and a general acceptance of social democracy and its communitarian ethics. 

In the United States, New Deal legislation that provided benefits for everyone from the young to the elderly was embraced and the rich paid over 80 percent income taxes with little complaint. Meanwhile, in Britain, the liberal National Health Service – free for all at the point of use – was devised and implemented by a collaboration between Labour and Conservative powers. 

Yet despite the minimal conflict between political parties, the pillars upholding social democracy began to fracture. Due to the new economic stability, a growing number of people pursued increasingly higher ranks of education, and over time, a new class of highly educated people found jobs that required specialized skills and offered wages to match.

In the 1970s, these intellectuals achieved their sense of pride in their work rather than their national identity, while a growing number also began supporting left- and right-wing ideologies that emphasized individualism. 

One such ideology that seized political consciousness was Utilitarianism, which argued that it was the responsibility of the state to redistribute advantages to the least fortunate. The adoption of Utilitarianism transformed the communitarianism of the postwar era into social paternalism, in which the state claims moral authority over its citizens. 

Meanwhile, due to widening wage differences, unskilled workers were granted less dignity for their labor than the professional classes. Over the decades to come, these people continued to embrace their national identity while increasingly feeling the anxiety of marginalization.

As a result of these political and economic transformations, social democracy today is in a state of crisis. In the past decade, Donald Trump’s populist message has won over the hearts of the marginalized masses, the social democratic parties in countries including Germany, Spain and Italy have all seen a collapse in votes, and in the United Kingdom, the Labour party has become arguably Marxist. 

From all sides of the conflict, it’s clear that capitalism today is only benefiting the few at the top. Rather than perpetuating hateful nationalist sentiments, we need to cultivate a sense of patriotism, or a willingness to support one’s country felt by all citizens. In short, to create a system that works, we’re going to need to find our way back toward communitarianism.

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