GOOD CAPITALISM

Good capitalism is the title of a book written by Prof. Dr. Sebastian Dullien (University of Applied Sciences in Berlin), Prof. Dr. Hansjörg Herr (Berlin School of Economics and Law) and Dr. Christian Kellerman, Director of the Nordic Office of the Friedrich Ebert Foundation in Stockholm.

Hereafter is what the authors say

" Good capitalism" stands for relatively secure economic living conditions. It is simply not acceptable that workers or business enterprises should be left at the mercy of fully destabilised markets.  Precarious jobs and mass unemployment serve only to weaken trade unions and workers. What this implies is a need to pursue policies designed to keep unemployment at low levels and to eliminate the legal loopholes responsible for the creation of precarious jobs. Expanded worker rights and rights of codetermination in the workplace constitute important elements of a balance of forces between labour and capital.

Crises offer opportunities. They offer an opportunity to question all of the orthodox opinions and interests that have been handed down more or less uncritically and accepted as valid, plainly and simply because they are so widespread. In this sense, the current economic and financial crisis offers a good opportunity to step back and take a hard look at what has gone wrong with the economy in recent decades and why it is that our economic system has not always contributed to improving the wellbeing of broad masses of the population. For many people, the neoliberal globalisation project has meant less, or indeed no, participation in the process of social value creation. Quite the contrary, it has led to precarious living conditions, bound up with the risk of social marginalisation or, indeed, exclusion. Social security systems have, at least in part, been at the mercy of the financial markets, with professional and thus also private plans for the future being subverted by crises and new methods of management. Large and growing sectors of society increasingly feel themselves to be mere objects, helplessly exposed to the vagaries of an increasingly uncontrolled market, prone to violent swings. Resignation, or indeed social unrest, may jeopardise social cohesion. In view of these dangers, there can be no doubt that we need an enhanced regulatory framework for globalisation.

In addition, we are convinced that financial capitalism of the kind that has emerged in recent decades, as well as deregulation of labour markets and other elements of the neoliberal project, have contributed in key ways to making the world economy far more vulnerable to economic and social disasters of the kind experienced during the Great Depression of the 1930s.

Although the long-term goal of creating a capitalism restrained by institutions and rules – a ‘good capitalism’ – may, at first glance, appear unrealistic, we can still envision a good number of first steps in that direction. Indeed, today they are already under political discussion. And since any long march must inevitably begin with a small step, we can follow up first changes of this kind by advancing – and transposing into practice – a multiplicity of further-reaching proposals. This is a matter of political will – and, of course, also of the political options available: a question of the play of forces within and between societies, of dynamics that lead to the creation of scope for political action. This is why it is important to seize the present opportunity to initiate, and implement, a series of first reforms which have the potential for long-term change.

One crucial consideration here is that we clearly understand where we are headed. In recent years, many politicians have neglected the need to develop a concrete notion of what shape our society and our economic order may take at the end of the course of reforms embarked on. Many reforms have been justified on more or less dedensive grounds: for example by informing the public that these reforms were necessary to rescue what is left of the welfare state. In the end, far from enhancing the economy's powers of resistance, the changes implemented have tended more to fuel the emergence of global economic imbalances and one important reason has been a lack of understanding of the wider context."

The authors propose a four pillar model that considers Bank and Financial Systems, Wages and the Labour Market, Budgets and the World. They argue that an alternative to the prevailing market-liberal economic logic is conceivable and above all possible.