Arnon Grunberg

Marriage

Capitalism

On a marriage – David Runciman in LRB:

“Martin Wolf believes that capitalism and democracy are like an old married couple. Neither partner can cope alone. Without democratic checks and balances, capitalism grows greedy and corrupt: the people with money reward themselves with power, which they use to make more money. It takes politicians with a popular mandate to stop them. However, without capitalist get-up-and-go and economic independence, democracy too grows greedy and corrupt: the people with power reward themselves with money, which they use to cement their power. Democracy inclines towards toxic populism, just as Plato warned. Capitalism inclines towards self-serving oligarchy, just as Marx predicted. Each works only if the other is there.”

(…)

“What to do? Wolf’s answer is deceptively simple, though it has many moving parts. The epigraph for his book comes from the shrine of Apollo at Delphi: nothing in excess. It’s a question of getting things in balance, as well as into perspective. ‘The fragile marriage of liberal democracy and capitalism,’ Wolf writes, ‘requires maintaining difficult balances between individual and community, between private and public, between freedom and responsibility, between economics and politics, between money and ethics, between elites and people, between citizen and non-citizen, and between the national and global.’ It’s a Goldilocks problem, as he sees it.
The difficulty is that the more Wolf itemises the challenges the world currently faces – from climate change to the war in Ukraine, from ever widening inequality to the erosion of public standards – it starts to look like a chicken-and-egg problem. How can we achieve a balance if each side takes self-restraint on the part of others as an invitation to ramp up its own demands? If the politicians hold back, capital will pounce. If capital tempers its demands, the politicians will ask for more. A strong state is needed to keep capitalism in check, but a vibrant capitalism is needed to keep the state under control. They depend on each other, but they also know that whoever blinks first is liable to end up the loser.”

(…)

“Wolf also has a clear sense of what won’t work. Universal Basic Income, for example, gets short shrift (‘In the end, the UBI is too ill-targeted to be a good use of the additional tax money that would have to be raised to pay for it. That is, in the last resort, all there is to say about this idea’). The aim is to make changes that can show themselves to be mutually beneficial: good political choices that generate greater economic security which in turn allows for a steadier politics; fairer business practices that restore faith in political decision-making which in turn enables better regulation of business. Win-win is the only way to restore faith in the system.”

(…)

“Wolf is haunted by the sense that his own life has been a charmed one. Both his parents narrowly escaped the Holocaust, which destroyed much of their extended families. He grew up in postwar Britain, which appeared to him ‘stable, peaceful, democratic and free’. His parents died in the 1990s, in a world that was better by almost any measure than that of their youth or early adulthood. Yet Wolf is, by his own account, a pessimist. Why? Because he is descended from people who were saved by their pessimism: if his parents and their parents hadn’t feared the worst, they would never have got out in time. And because – as chief economics commentator for the Financial Times since the mid-1990s – he has been burnt by over-optimism once too often, particularly when it comes to ‘the wisdom of finance and the good sense of electorates’.”

(…)

“Second, the postwar alliance of capitalism and democracy was built on the ready availability of well-paid jobs for relatively unskilled workers. Now most of those jobs are gone, and the industrial knowhow on which they depended has been distributed around the globe (the US and Europe once knew how to do things that the rest of the world did not; this is much less true today); labour movements have withered with them (trade unions are still active, but are stronger, increasingly, among the educated classes); and democratic contention has been reduced to party bickering. Some of what Wolf is proposing is designed to bring better jobs back. But not the old jobs and not the old ways of working.

Connected to this is the third big difference: ours were, until quite recently, deeply patriarchal economies. Work was done by men, who also did the organising. The entrance of women into the workforce, along with the offshoring of manual labour and the shift away from the stable arc of a working life – birth, school, work, death – has had two effects. Many men are angry about the change and have been left feeling disempowered, both the indebted young and the embittered old. That makes bad politics. And organising resistance to capital has become harder, because there are so many more interests to reconcile. Work is now part of the great unbalancing.”

(…)

“Wolf isn’t nostalgic for what’s not coming back. But he does wish we could recapture that sense of possibility from an earlier time when it was thought worth trying new things. He thinks we’ve become miserable and unimaginative at the same time: indeed, we are miserable partly because we are so unimaginative, and unimaginative partly because we are so miserable. Unfashionably, he champions a return to what Karl Popper called ‘piecemeal social engineering’, whereby grand schemes are avoided in favour of pragmatic experiment. We know that grand schemes don’t work, although part of what makes us miserable is our hankering for a world in which they might. You can’t have untamed capitalism without destroying democracy. Out-and-out libertarians, as Wolf says, must ‘openly admit their opposition’ to universal suffrage democracy. And you can’t have state socialism without undermining market-driven economic growth.”

(…)

“There are lots of practical proposals: citizens’ juries, weighted voting systems (more votes for younger adults or for those with children), a third chamber of Parliament chosen by lottery, a public regulator to monitor the baleful influence of news algorithms. None of these ideas is new, which doesn’t mean they aren’t worth pursuing. But there is a reason they haven’t been pursued so far. We don’t know how. How, in the absence of a reformed democracy, do you empower citizens’ juries to take consequential decisions, or public regulators to take on overmighty corporations? I am not saying there are no answers to these questions, but you won’t find them here. Declaring that there should be a third chamber made up of randomly selected citizens tells us nothing about the circumstances under which that might seem to British democracy as currently constituted an idea worth trying. We have to start somewhere, of course, but we can’t forget that we are starting from here.”

(…)

“The most damaging lacuna in the welfare states of high-income economies is the UShealth system, which does not provide universal insurance. It [is] staggeringly expensive yet fails to deliver acceptable health outcomes to the population. All other high-income countries have universal health coverage. Such systems do, on the evidence, deliver far better health outcomes at far lower overall cost. The US should follow these examples.

There’s the what. But how? He doesn’t say. Follow the example of the people who do it better. That’s it. If the American political system were capable of doing that, this would be a very different world. The British healthcare system is another case in point, though Wolf doesn’t discuss it. The UK is one of the advanced economies that have universal coverage, yet the NHS is in bad shape, and generating worse outcomes than other places. Mixed-payment, less centralised systems do better (Australia, France). We should probably do more of what they do. There’s the what. But how? Is it a question of electing politicians who say they’ll fix it? That seems unlikely: it hasn’t worked so far, and it’s hard for politicians to get elected while challenging the sacrosanct status of the NHS. Is it a question of changing the way decisions about healthcare get made? And if so, do we need to elect the politicians who say they’re going to do that? How will that happen? The alternative would be to change the way politics gets done without waiting for an election to signal that the change is wanted. That would require new ways of doing democracy – more direct, more deliberative, more consultative, whatever. Can we make those changes now? It seems unlikely without some triggering event such as a constitutional convention. But who is going to waste time on a constitutional convention when there are far more pressing things to be done, like saving the NHS? It is easy to feel overwhelmed.

Wolf’s central motif is that the relationship between capitalism and democracy is like a marriage in need of repair. Yet as marriage guidance his book falls short. He tells the unhappy couple all the things that go to make a successful marriage and then points to examples of people who do it better than they have. But where should we start, they want to know. How can we get along better if we can’t stand the sight of each other?”

Read the review here.

Martin Wolf as a marriage counselor, that’s fun. And democracy and capitalism as a marriage is even funnier.

Fun aside, perhaps we should leave the dichotomy of pessimism versus optimism.
Since Carter we know that pessimism doesn’t win elections.
At least since Trump we know that spite and grudge are more popular than optimism. If populism is anything it’s the power of the grudge.
But those who hold the grudge are convinced that it’s not about scapegoating even though, often they don’t know more to say about their enemies, than that’s the elite.

Also, I would say that the 20th century taught us that grand schemes in politics are bloody and violent schemes. Mr. Wolf must realize that.

There is an interesting remark about the demise of the patriarchy, that’s a more original explanation than it’s the economy stupid.

Some governments throw money at their constituencies (Covid) as if they are Santa Claus. Ture, real poverty is still the same or worse, at least in the US. And probably also in many other Western countries. But it has not lessened the disgust for the government and the traditional

The middle class is mainly unhappy. Being miserable and unimaginative is not something we can solve with higher wages. (That doesn't;t mean that higher ware are very often need and are justified, but they are not the miracle cream we are looking for.)
If we look at politicians and the government to make us less miserable and less unimaginative, we are looking at the wrong people and the wrong places. Somebody ought to say this.

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