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The Future of Capitalism: Social Democracy in Crisis? (Part 2)
A conversation with Paul Collier

 

During our visit to the Global Solutions Summit 2019, we had the chance to talk to Paul Collier, professor of Economics and Public Policy at the University of Oxford and author of “The Future of Capitalism”. As we highlighted in our last post, with his newest book, the author questions modern social democracy and appeals for a future where capitalism is not only prosperous but also more ethical. We discussed practical steps towards his idea of capitalism; a European identity; Brexit; the role of environment; and why the values of moral responsibility are universal. To listen to his thoughts on these topics don’t forget to check our latest video!

We are living in unhealthy societies.

The preamble of our conversation was the central idea of Collier’s book. Over the last 40 years, two rifts have emerged in developed countries. On the one hand, there is a spatial rift dividing metropolises from provincial cities and on the other hand, there is a new class rift that separates well educated from less well educated people. These rifts have got wider as political elites of intellectuals, ruling from the metropolises, lost any sense of shared identity with other citizens and shaped capitalistic societies into selfish systems with no internal value of reciprocal obligation.

However, the state has the power of addressing the problems of modern capitalism.

For this, the fundamental role of state has to change. According to Collier, the state has to fill a supportive role in society and abandon one in which it becomes an authoritarian protector. This especially applies for the role that the state plays in helping young families. By reshaping its core characteristics and decentralizing its moral responsibility, the state could enable a supportive chain of developing a child from birth to becoming a purposeful young adult.

Creating a sense of shared identity is essential, especially for Europe.

A change in capitalism will only be achieved if a sense of shared identity is created. A shared identity enables feeling of moral responsibility and thereby the capacity of a country to move forwards as a nation. According to Collier, in the case of the European Union a shared identity must happen at a national level but this identity should allow countries to come together trying to achieve common goals, especially those that would improve the well-being of people living in the poorer countries of Europe.

A more ethical capitalism requires an environmental dimension. 

The author also explained that once moral responsibility is distributed across individuals, families and firms, the future of the planet becomes one of the fundamental purposes of society. In contrast to top-down measures that have not been as successful as expected, this could translate in practical actions for families and firms.

Reciprocal obligations seem to be universal.  

At the end of our conversation, Collier told us that although the political and economic history of a country may vary across regions our value of reciprocal obligation crosses territorial barriers. He has a simple explanation for this: we all are morally motivated people.