Surviving Capitalism: how we learned to live with the market and remained almost human
Erik Ringmar, Anthem Press, 2005, 198 pages, £16.99.
Adjustment problems are a major issue in the political acceptability of economic change, whether that change is the result of technical advances or movements in comparative advantage between communities or countries. Although more-keenly evident in democracies, they are a factor in all systems of government. It is curious therefore, that outside the political arena, they are largely ignored. This is particularly so amongst economists concerned with international trade, where debate tends to be increasingly polarised between those who support globalisation and those – notably NGOs – to whom it is an evil manifestation of capitalism, the unleashing of the market on those unable to defend themselves against it.
By virtue of its title, Surviving Capitalism is likely to evoke instinctive sympathy from the latter group, and similar hostility from the first. This is unfortunate, for the author, Erik Ringmar, until recently of the London School of Economics (he resigned in May), accepts capitalism as the fundamental motor of economic development. He also accepts the process of globalisation, or at least the steady broadening of the world economy which it now exemplifies. This is noteworthy, as Ringmar is not an economist, and indeed is quite hostile at times to the discipline (his view of the market is of the untamed monster school). His purpose however is not to discuss whether changes are beneficial or otherwise, but to look at the social and economic challenges they create for those affected by them, and how they are solved.
In so doing, he concentrates on the role played by institutions, ranging from family structures to trade unions and government, in mitigating the adverse effects of economic dislocation on those caught up in it. He does so even-handedly, dealing equally with the adjustment problems of communities in developed countries faced with unemployment, and those in the developing world facing the destruction of settled agrarian societies as industrialisation accelerates. In all cases he demonstrates how the institutional structures of the communities are used by those affected to modify the effects to the benefit of the participants.
This subject area is a staple of social and economic history, and is studied widely also by sociologists, and the book contains a large number of references to other publications. Ringmar’s contribution however is unusual in the relationships it identifies between contemporary situations and the cultural and institutional roots which enable those societies affected to adjust to them. This he does convincingly.
There are nevertheless some weaknesses. Notwithstanding the extensive use of published references, he appears to have based much of his analysis on his own observations, many of which are subjective and could be challenged. Historic events in which institutional structures failed as protection mechanisms, such as the Highland clearances, are omitted. There is also some geographical imbalance, with concentration almost exclusively on China, Japan, Thailand and Europe.
Ringmar’s observations on China and Japan cover known ground; those on Thailand, where his knowledge is direct, are fascinating. He is more discursive and less penetrating on Europe, where he says curiously little about the UK, despite its pivotal place in the agrarian and industrial revolutions and its high exposure to international trade, all of which have made adjustment issues central to its economic history for some 300 years. A complete section is devoted to his native Sweden as an example of how the state can manage change for the benefit of its citizens, but there is no discussion of the cultural complexities which have prevented other European countries from successfully emulating the Swedish model.
His final conclusion is pessimistic, predicting considerable difficulties ahead as the collapse of family structures in the west removes a major adjustment mechanism. He also foresees a new class system, where the unwillingness of the majority to replace meaningless consumption with institutional and social interaction deprives them of influence over their circumstances. This is of course speculative, but not unconvincing.
Despite its faults, this is a valuable book. It is, moreover, fluently written and wide-ranging. Its main audience is likely to be graduate and undergraduate students across the social sciences, but it is not without relevance to business economists. And given the polarity of opinions in this field, others might with value read it also.
Donald Anderson