It’s time for civic capitalism

MAPWe need a new model of capitalism, one that is based on civic values, argue Colin Hay and Anthony Payne 

We’ve thought for a while that it’s time to move on from the mawkish (if necessary) analysis of the failings of the now infamous Anglo-liberal model of capitalism and from lamenting the absence of new thinking about what might replace it. The moment has arrived when we need to pin some colours to the mast of a new model that will work better in advanced capitalist countries.

This is a bold endeavour, fraught with difficulties, both intellectual and political. But we took the view that, if somebody didn’t try to tackle this question, then we would have no excuse if we looked back in a few years and found that a bastard version of the old model still rules. Our new, and very short, book published by Polity Press in March is the outcome of our efforts.

What do we mean in this context by a model of capitalism? Nothing more, but also nothing less, than a coherent framework of distinguishing features that combine to suggest a particular way of conducting the daily business of capitalist economies. It should possess a clear sense of the particular vision of the good society to which it aspires and in that sense will be a model of development as much as a model of growth.

Capitalism needs to be seen to have a

moral purpose; otherwise, it’s just a rat race.

It’s important also to emphasise what a model of capitalism is not – what it does not and cannot do. Specifically, it won’t tell us exactly what policies to follow in detail in every situation. For example, it might well insist on the need to embrace macroeconomic policy more fully, but it won’t reveal exactly when to raise interest rates or at what level to set taxes. Similarly, it might suggest that we need a workable industrial policy, but it won’t tell us which winners to back or even if backing winners is the best approach.

In other words, the task of setting out a new model of capitalism is more like designing a new car than offering advice to the driver from the passenger seat! It’s also, critically, about offering a plausible narrative that explains to the people living and working within it what they are part of, how they might fit in, what gives their productive lives some meaning. Capitalism needs to be seen to have a moral purpose; otherwise, it’s just a rat race.

In our present circumstances the obvious and best starting-point seemed to be the nature of the old model that so extensively failed us. We identify the following as its key features:

  • The hegemony of an assertive neoliberal ideology;
  • An elite policy community trapped in its thinking within this narrow ideological framework;
  • Substantial deregulation of markets and privatisation of financial management;
  • Huge dependence on the supply of cheap hydrocarbons, with seriously damaging environmental consequences;
  • The systemic accumulation of debt and the increasingly pathological dependence of consumption (and, in turn, growth) on such debt;
  • An accumulation of risk within the economic system;
  • The absence of a coherent theory of society, or social wellbeing, beyond the sum of individual, supposedly rational goal-seeking;
  • The consequent embedding of inequalities between and within countries; and
  • A limited view of global governance as little more than rules to manage competition between national economies.

A sensible, and realistic, next step in working away from this model might therefore begin by simply adjusting, and of course in some cases redressing completely, each of these nine features. What sort of a model might then emerge? If we follow through the logic of this simple but important thought experiment, we proceed quickly to the broad outline of a new model of capitalism characterised by rather different distinguishing features:

  • The re-emergence of a broader dominant ideology grounded in social democratic, ‘welfarist’ and social market thinking;
  • A policy community open to different, more interventionist, more fluid approaches to economic and social challenges;
  • Coordinated re-regulation of markets and risk management in the collective public interest;
  • Serious engagement with sustainable models of energy use and resource conservation;
  • Economic stimulation built on investment rather than debt-fuelled consumption;
  • The development of alternative standardised measures of national economic performance beyond GDP;
  • The integration into this growth model of the concept of ‘social quality’;
  • A shared commitment to reducing prevailing levels of inequality between countries and peoples; and
  • The creation of more intensive and sophisticated, flexible and deliberative, mechanisms of global governance.

A final question pressed on us as we thought and wrote: namely, what to call this new model? After all, labels matter. We think it is best described as a model of ‘civic capitalism. We need in effect to remind ourselves that capitalism can and must be made to work for us as citizens of a democratic polity. It’s time, surely, to ask what capitalism can do for us and not what we can do for capitalism. Don’t you agree?


Notify of
Newest Most Voted
Inline Feedbacks
View all comments
Stuart Arden
Stuart Arden
9 years ago

What needs to happen more than anything else is for this sort of thinking, large-scale philosophical thinking about the direction we are going in and the vital need for reassessment, to enter the public sphere.
Oh, and a Philosopher King would also be useful!

Fernando Centeno
Fernando Centeno
9 years ago

“Civic capitalism” sounds appetizing until it occurs that the public good (civic) is piggybacking off the “all in” (capitalism) risk-takers known as business investors, entrepreneurs, & market players. Nothing is said about fair marketplace competition; this is where the real action is. Let those on the front lines make their profits, but, if public investment or funds are involved in these private transactions, let there be concrete public goods produced as well, leading to job creation, a broader tax base, greater productivity & efficiencies, internships, pay, training, equity, etc. On top of that, keep the engine of our economic growth running at optimal speed so that it continues to help pay for maintenance costs in the form of income taxes, keeping down unnecessary subsidies from the taxpayer. Broaden the marginal rates but not at the expense of losing the incentive to make a fair profit.

Whatever economic system or think-tank paradigm you want to create, let’s finally decide what it is we need to see, from a given baseline going forward: higher household incomes, higher personal incomes, a lower or pegged poverty rate, higher consumption rates, higher workforce participation rates, or any combination of targeted outcomes. After all is said about the need to see better civic results, what criteria are we looking at to tell us we are achieving real results? That is the question.

Finally, we really need a public sector term which matches the energy & imagination that “capitalism” evokes, even with its inherent flaws; unbridled capitalism can be harnessed via regulation, but it still serves a larger purpose. What is the larger purpose on the civic side? What worthy ideas motivate us to fly its banner? Where is the record of this success? These are questions I am asking of myself . . .

Help us break the news – share your information, opinion or analysis
Back to top