Book by Geoff Mulgan, Princeton University Press: Princeton, 2013.
Capitalism is the focus of Geoff Mulgan’s latest book. In a wide-ranging argument, Mulgan argues that capitalism, rather than being an immutable fixture in our lives, is part of a process of ongoing social evolution and progress. The real power of capitalism lies in its flexible and responsive nature, in its ability to adapt, colonise and regenerate. He argues that we can all play a key role in shaping capitalism’s future for the better.
At the heart of the capitalist system, he argues, is a particular approach to value. Essentially, the system is constructed around exchangeable representations of value, and maximising this value remains the key driver of all behaviour. Value can be maximised in two ways. The value held or made by others can be captured by predation (as by locusts) or it may be created by innovation and industry (by bees). These two forces represent respectively the worst and the best of capitalism.
Mulgan argues that recent crises within the capitalist system, like the GFC, are driven by an imbalance of predatory behaviour over creative. But he also points to an ongoing crisis of meaning, which paradoxically is particularly concentrated among those who have benefited most from capitalism’s power. Mulgan considers that the persistence and visibility of predation in capitalism drives incessant discontent and critique, which capitalism is (usually) able to absorb or resist.
In the aftermath of a crisis of predation in the GFC, Mulgan argues we have an historic opportunity to unleash the creative forces of capitalism. He considers the spread of entrepreneurship into the social sector (social entrepreneurship) as an example of this creative, beneficial behaviour. He also argues that we should channel capital and wealth into creative, useful activities and use them to incentivise and nurture innovation. This connects investment with creativity, and positions social impact investment as a powerful creative force to improve capitalism. He reminds us, however, to “make capital a servant, not master” (p. 245), echoing the similar sentiments concluded by Burkett, discussed earlier in this review.
Overall, he paints a very optimistic picture of our capitalist system, and even more so, of our own ability to shape its future. Written in Mulgan’s lucid and engaging way, there are many shrewd insights and thought-provoking anecdotes here. Some readers may find his endorsement of the spread of capitalist ideas and tools into our social spheres challenging, but none will put the book down without some new knowledge or renewed hope for the future of capitalism. It is a great read for understanding how a social marketplace can fit into a broader agenda of a better Australian society.
n.b. If you haven’t time to read the book, you can see Mulgan discussing his ideas here in a YouTube clip published by RSA: