Capitalism is the only economic system that works

Wandering through the city’s bookshops yesterday I came across this: Is Capitalism Obsolete? with the subtitle, “A Journey through Alternative Economic Systems”. I live in hope that there will be at least one volume somewhere that has no for an answer. Haven’t seen anything in years. The above is my picture of the back cover. If you read how they advertise the book, you will find the least unexpected turn in the history of modern publishing.

After communism collapsed in the former Soviet Union, capitalism seemed to many observers like the only game in town, and questioning it became taboo for academic economists. But the financial crisis, chronic unemployment, and the inexorable rise of inequality have resurrected the question of whether there is a feasible and desirable alternative to capitalism. Against this backdrop of growing disenchantment, Giacomo Corneo presents a refreshingly antidogmatic review of economic systems, taking as his launching point a fictional argument between a daughter indignant about economic injustice and her father, a professor of economics.

Is Capitalism Obsolete? begins when the daughter’s angry complaints prompt her father to reply that capitalism cannot responsibly be abolished without an alternative in mind. He invites her on a tour of tried and proposed economic systems in which production and consumption obey noncapitalistic rules. These range from Plato’s Republic to diverse modern models, including anarchic communism, central planning, and a stakeholder society. Some of these alternatives have considerable strengths. But daunting problems arise when the basic institutions of capitalism—markets and private property—are suppressed. Ultimately, the father argues, all serious counterproposals to capitalism fail to pass the test of economic feasibility. Then the story takes an unexpected turn. Father and daughter jointly come up with a proposal to gradually transform the current economic system so as to share prosperity and foster democratic participation.

Capitalism means a system of production in which the ownership of firms is in the hands of private individuals who use the capital they buy, rent or own, while directing the employees they hire, to produce goods and services in a lawful way to sell what they have produced to others in order to earn a profit for themselves. There are lots of variations on the theme but that is essentially it. Nothing else has ever worked, nothing else will ever work, however many fools and their fictional daughters there may be who think they have come up with something else.

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