In Capitalism Unleashed, Economist Andrew Glyn takes a hard look at the “progress” of Capitalism in the latter half of the 20th Century and asks the all important question: At what cost? Whence and whither?

In a recent interview by Rob Hoveman on SocialistReview.org.uk, Dr. Glyn stated his motivation for writing the book as follows: “I wanted to trace how the world economy has changed over the last 30 years and try to make some sense of it. From the 1960s to the 1980s the primary problem for the capitalist class was the strength of labour. That threat has receded. I wanted to work through why this was and where the main problems for the world economy are now located.”

Mr. Hoveman notes that “Capitalism Unleashed covers the growth of privatisation and deregulation, the explosion of the financial sector, globalisation and the rise of China. It also looks at the assault on pay and conditions and the decline of union strength, the contradictions of growth over the last three decades and much more.”

Quoting Glyn from the same interview, he decribes the evolution of his thinking and his latest book:

In earlier books, such as British Capitalism, Workers and the Profits Squeeze (1972), I and my co-authors placed strong emphasis on the relations between capital and labour. It is still my view that labour’s position became stronger in the long boom, trade unions negotiated higher wages and greater welfare spending. Even where trade unions were not strong, the sheer intensity of the boom pushed up wages significantly. Growing international competition also made it more difficult for firms to raise their prices in response to higher costs. The strength of labour forced an increase in real wages at the expense of profits. For me that was the most important cause of the transition from the golden age to an era of instability.

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The need for the capitalist class to weaken labour to restore their profits explains the policies they pursued. When Thatcher was elected, many on the left argued that monetarism was completely irrational. I disagreed. The rationale of monetarism, as a broad economic philosophy replacing Keynesianism, was to re-establish that the market rather than union militancy should determine wages, and that mass unemployment was a price that would have to be paid to restore profitability and ensure a healthier capitalism.

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Indeed countries with relatively high levels of industrial militancy in the 1960s later suffered much higher levels of unemployment. So the more the industrial unrest in the 1960s the more that unemployment had to be pushed up to try and force wages down and productivity up. Of course there was much wringing of hands about the rising unemployment but its effect in putting labour on to the defensive was welcomed.

Bien.org notes in its review of this book that:

Its final chapter, “Welfare and Income Inequality”, sketches a gloomy picture of the recent growth in inequality throughout the industrialized world, while stressing that inequalities grew most in the countries that were initially most unequal, and that more egalitarian institutions, as in Scandinavian countries, are consistent with sustainable economic performance. Moreover, following Richard Layard’s analysis, he notes that GNP growth, as standardly advocated on the left no less than on the right, has led to little, if any increase in the average level of happiness. It follows that top priority in the rich countries should be to establish “the basis for a new balance between work and other activities”. How? “the most innovative policy suggestion to encourage moves in this direction is the proposal of a Basic Income”. Such a proposal, Glyn argues in the final pages of his book, “would involve a recasting of elements of the welfare state in an egalitarian direction which would be extremely worthwhile”. It is politically feasible, Glyn believes, providing it takes the form, initially at least, of a “participation income”, and it is economically feasible, not only because it can be expected to be introduced at a pretty austere level but also because the sort of discouragement of formal work it involves helps reduce various kinds of negative externalities. For egalitarians, this is far better and goes far deeper than merely defensive strategies. It offers “a much more fundamental reorientation of priorities for society as a whole”.

The publisher, Oxford University Press, states that this book “challenges the notion of our capitalist destiny. It provides a clear and concise history of the problems facing the economies of Europe, Japan, and the US during the latter half of the twentieth century and questions whether capitalism has really brought the levels of economic growth and prosperity that were hoped for. Andrew Glyn then looks at the impact that the rapidly developing economies of China and the South are likely to have on the older economies of the North. As the race is on to maintain growth and protect competitive advantage, Glyn asks: is the “race-to-the bottom” inevitable as the anti-globalizers predict, with welfare states being dismantled to meet competitive demands? Or is there an alternative model, which sees a strong commitment to welfare provision as essential to economic growth? Can we afford not to tackle inequality at home as well as abroad?”

All in all, most readers, particularly those of a socialist bent, will find much food for thought in Glyn’s latest work, including the one of the more lucid and insightful explications of the path of Capitalism during the past few decades, both positive and negative; and most importantly, a serious challenge regarding how we proceed from here.

Andrew Glyn has been Tutor in Economics at Corpus Christi College Oxford since 1969, was an economic advisor to the National Union of Mineworkers, has been a consultant for the the International Labour Organisation and the UK Treasury and co-edits the Oxford Review of Economic Policy. He co-authored several books on post-war capitalism, edited Social Democracy in Neoliberal times (OUP 2001) and has published journal articles on unemployment, profitability, globalisation and the history of economic thought and newspaper articles on current economic policies.Â