Is there such a thing as “sustainable” capitalism?
Long ago, Keynes warned that laissez faire capitalism was doomed, not in the sense set out by Karl Marx, but because of Marx: Supposedly labor unions got to be strong enough to ‘fix’ wages, and then was born the basic Keynesian ‘inadequate’ aggregate demand explanation of recession, which meant that capitalism was inherently unstable. Keynes response was for governments to fill the gap, and so here we are, still wondering what hit us in 2008.
Of course, it was a post-modern Keynesian, one Hyman Minsky, who said that capital markets can at times behave like it was filled with pocket Ponzis, albeit of the legal kind. Minsky’s solution was pretty straightforward — kill off the pocket Ponzis. The problem is still how to spot them. The Madoffs we can sometimes find, but the pocket Ponzis operate on stealth. So it isn’t easy. I suspect I can tell but of course I’m keeping my Groucho Marx mouth shut.
The reality is that a non-Keynesian, one Joseph Schumpeter, ‘saved’ capitalism by saying it’s pretty much like a living organism that evolves and keeps re-inventing itself. He called the process Creative Destruction.
Schumpeter must have been a follower of Darwin; otherwise he would have started something called Creative Construction. The capitalism we see today is a mixed bag of old-style snake-oil stock touts with lots of regulatory layers to ward off such evils as insider trading, ‘trusts’, conflicts of interest on the part of stock brokers and credit rating agencies, simple-simon accounting fraud (such as Enron), and fly-by-night banks. Unfortunately, we don’t quite regulate IPOs, so the FB and Groupon fails can and do take place. In general, as in all markets, the rule is still Caveat Emptor.
Now comes Blood and Gore, who promote a gospel called Sustainable Capitalism. The Capitalism part is ho-hum: Give me your money, I’ll invest it, and since I’m smart we will make out. The Sustainable part is new: I’ll invest in Green Corporations, and since I’m smart we will make out.
What can one make out of this new capitalism? It has some shades of Schumpeter: the old fossil energy companies will self-destruct against the onslaught of evidence that Anthropogenic Global Warming is the new End of the World, of course to be replaced with green energy companies, which have presciently been funded by Blood and Gore.
Still, I don’t know for sure. Much depends on lobbying skills.