Basic instinct of capitalism is missing

Everyone is sure that there is something wrong with capitalism in the wake of the 2008 financial markets meltdown and the consequent recession.

But not everyone — including politicians and economists — is sure as to what is to be done about it.

There is the general argument to rein in the greedy Wall Street speculators and manipulators and that the state should step in, spend money, create jobs and protect the jobless and other vulnerable folk.

What those who recommend state intervention have in mind is a vague kind of Franklin Roosevelt’s New Deal, which stops short of turning into a state-run economy but does all that it can to ensure that people are not thrown on to the streets.

There is of course understandable concern and a bit of economic merit in this policy prescription.

What is problematic and unsatisfactory about it is that it does not show how jobs can be created, incomes guaranteed, wealth generated and also keep it going almost without break. It is like expecting a machine to work without a break or a breakdown. A perfect machine would of course work continuously but not man-made ones.

If there are failures in markets, then there would be failures in a state-run market as well.

No one, including the communists, socialists and anarchists, is talking of a controlled economy. As a matter of fact, at this moment of deep crisis in capitalism, the critics of capitalism are conspicuously silent. They are not any more predicting that capitalism is on its last legs and it is doomed. They are not in a position to offer the dream of the alternate utopia.

There are also no blueprints for reviving capitalism, or for replacing it. No big debates, no big ideas. There is an intellectual vacuum. All that one is looking forward to is for some small solutions to small problems, and hoping that the big issue will get sorted out on its own. The economists cannot be blamed for turning out to be too timid to offer radical answers. It is the fault of everyone — social scientists, natural scientists, social reformers and culture critics.

There is perhaps need to address some of the basic issues of organising society. Is there a need to build cities, towns, villages afresh, the contribution of individuals, families and groups organised in a more efficient manner so that the resources are created and utilised in an optimal fashion and that they can be sustained for a longer time? What is the best way of exploring new avenues and resources? What kind of knowledge and skills are required to do this?

This is not to suggest the ecological approach in the silly green fashion. If capitalism has to renew itself, it may have to look at the basic elements of a social organisation. This is an exercise that has not been done since the industrial revolution.

The hippies in the 1970s tried to lead a community life of sorts of their own but those projects came to nothing because they did not do the hard-wired projections. They depended more on sentiments and hallucinogenic thinking.

Capitalism will have to think of building cities and villages, creating networks and identifying new jobs if it has to move forward. The existing paradigm of exploiting new opportunities that arise out of nowhere cannot be a source of assurance and success. Serendipity will continue to play its role no doubt but the element of uncertainty predominates. Future needs to be thought out in detail than it has been done so far.

And this may require individuals, families, groups and communities to think, dream and work together to be able to create fresh assets and these may be in the form of new habitat. Capitalism needs new frontiers and there are not too many people with an eye on the horizon. The basic instinct of capitalism is imagination, and that is missing.