13:36 GMT11 August 2020
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    Former minister Baroness Shriti Vadera, who is now chairwoman of Santander UK, said that "the underlying promise of western capitalist economies - that a rising tide lifts all boats - has been broken". Can capitalism be fixed? If it can't, then what on earth do we do?

    Fergus Murray, a science teacher, writer and social activist in Edinburgh, and Professor of Economics and author Steve Keen, from the School of Social and Behavioural Sciences at the University of Kingston, discuss these issues on this program.

    The program starts with a discussion on 'short termism', something that capitalists are increasingly being accused of, in terms of comparing that with what Marx described as the 'boom and bust' cycle of capitalism. Steve Keen says that what Marx was talking about was 'systemic feedback'  and the distribution of income as a result of which economic activity rises or falls… Marx's argument about the long term downfall of capitalism related to an argument about profits and surplus being deduced from labour, which I have always argued is philosophically wrong, using Marx's own philosophy, and wrong in terms of the source of profit as well, however what we are talking about now is a similar problem to what Marx was talking about then, which relates to the rising level of technology making labour redundant in production. That is a huge change which capitalism has not had to handle before."

    Fergus Murray says: "A lot of the short termism is a relatively recent development. It's to do with the idea that a firm's job is to make as much profit as possible for the shareholders. This idea really only took hold in the 1980s….The attitude that managers should maximize profits at all times, has a lot to answer for….Managers are pushed to maximize their profits for the next quarter at the expense of all else."

    A link was made between short termism and neoliberalism. Professor Steve Keen said: "the reason that neoliberalism was accepted was because people put forward the idea that income distribution and capitalism are meritocratic….However, the question that Milton never asked was: is this sustainable on a finite planet?"

    Another link is discussed regarding the possible reasons that capitalism has lost direction and is drifting around, facing crisis after crisis is because people, societies and countries have to a certain extent lost a common goal. Host John Harrison refers to Max Webber's concept of the 'Protestant Ethic' and the importance of that in the development of capitalism. Fergus says: This is true on a personal level, on the level of companies, and the level of a country. You are talking about the Second World War as being something that brought us together with a huge national focus, as an example of a united purpose that got people working together towards a common goal. And if we could harness the massive environmental break down which we are facing, then maybe we could reorientation our economy around that. But we are still waiting to see what it will take to get governments to able to avert the impending catastrophe. "

    The question of whether societies can change from one system to another is debated. Professor Keen however is not at all optimistic that society will learn and change its ways. "Humans never made a transition peacefully, and I don't see any reason to expect this transition to be peaceful either."

    Fergus Murray, is more positive and talks about technology and the internet as being a possible way forward. "It allows collaboration in ways that were never possible before. It has made it clear that people want to collaborate, they want to do useful things. This is something that the pro-capitalist forces have constantly obscured. We have had a vision of mankind put forward as being fundamentally selfish and very competitive, actually, once you give people the chance to cooperate, we easily do, and once you give people the chance to do useful things, they do. The internet has bought to the foreground how real that all is, as it is allowing the spread of knowledge and ideas much faster and further than ever before. That is allowing global conversations to develop, and at the same time the rapid automation that could replace many of the jobs that people are currently doing…"

    Fergus sees changing the regulatory system as the way forward: "There is no reason why companies should not be asked to define what they are here to do, to give their company a purpose, to secure that goal and hold them to account. What we see is that companies that do have a well-defined goal compete better in the capitalist market place as it is… But it needs to be formalized, and it needs to be universally expected from companies across the board."

    Professor Keen argues, however, that societies which have an unsustainable trend as part of their foundation continue until the unsustainable chain breaks. "I don't see any desire to identify the unsustainable trend and try to solve it. I don't see any difference in capitalist systems regardless of who is running them these days in terms of avoiding a similar fate. Obviously you get to a state where this simply can't go on, then you have a reaction which will I think in the case of ecological actions, involve force….We are well past the point of sustainability in anybody's language when you look at things like the human ecological footprint, so it'll be reactions back in the other direction, and just like what happened in any society form the Romans on, it won't be pretty."

    If a complete change is needed in the way that we run our societies, then it would seem to be necessary for countries to change en masse rather than one at a time. Professor Keen thinks that a group change is impossible. Fergus Murray thinks that is going to be extremely difficult, but not impossible: "We can give people control over their local power systems, we can empower workers to have a say in their companies, none of this requires a rupture, and a lot of it is currently favored by current economic systems, but it's going to be extremely difficult."

    Professor Keen however does not know of a single capitalist country that has turned away from capitalism. "We have countries like Tibet which are using a 'happiness index' rather than GDP, as an indicator of whether it is succeeding or not. But most advanced countries are capitalist, they are not all social democracies, put it that way. There has been a transition to capitalism but no transitions from capitalism."

    The debate about whether capitalism can be adapted to handle climate change is continued in this week's Brave New World program: «The Case For Capitalism Being Able to Adapt to Climate Change».

    We'd love to get your feedback at radio@sputniknews.com

    Economy, capitalism, Karl Marx
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