On "Capitalism, Alone": On the occasion of Greek-language publication

 -If, as you say, capitalism is a system without an opponent, was Fukuyama right when he spoke of the “end of history”?

 Not really, because for Francis Fukuyama the end of history implied the domination of  liberal capitalism throughout the world. This is not what we observe. On the contrary, we note many forms of political organization, not just one. What I call “political capitalism” (as exemplified by China, Vietnam Singapore etc.). is one such non-liberal political form. But even with regard to capitalism, its current domination, which is both geographically and in terms of our system of values incontestable, should always be seen as a historical development, and never as a “terminus” of our  history.

 

-According to your interpretation, communism has fulfilled its role and is a system that belongs to the past and not to the future. Were the regimes of existing socialism communist? Only the Stalinists claim so. Today you will hardly find a Marxist who supports such a thing. On the contrary, many consider that the "existent" was the defamation of the socialist ideal.

I think that this is a very wrong view. Whether “the really existing socialism” was 100% compatible with Marx cannot be taken as a criterion whereby we judge whether it was “socialism” or not. There is no doubt that its essential characteristics, non-private ownership of the means of production and centralization of economic decisions, were fully in accord with traditional, including Marx’s, conception of socialism. Furthermore, we do not deny that today’s capitalism is “capitalism” even if some libertarians or even Friedmanites might not think so because of (say) too strong role of the state, existence of trade unions or high taxes. Such absolutely “pure” theoretical constructs, whether we speak of capitalism, socialism or feudalism have never existed. Likewise, we do not dispute that some societies are predominantly Christian even if they do not follow to the letter the tenets of the religion. Thus, “really existing socialism” was indeed socialism.

 

-You argue that the countries that have adopted the model of social democracy - one of the three of modern capitalism as you say - have succeeded in achieving levels of prosperity and political freedom unprecedented in human history. So can we say that this is still the solution to the problems facing societies today?

Yes, they have indeed done so in terms of economic prosperity, political freedom, and social mobility This is still a very good system—but I do argue that it was a system “constructed” for a world of homogeneous nation-state and of limited capital and labor flows. With much greater movements of capital and labor, the welfare state, which is the key part of social democratic capitalism, is under heightened pressure. Mobile  capital can leave if taxes are too high, and mobile (foreign) labor can move in. Loss of capital weakens the ability to fund the welfare state, while inflow of foreign labor reduces cultural homogeneity that was at the origin of the welfare state.

 

-What we see today is a turn of the “liberal capitalism”, which is becoming more and more authoritarian and moving closer to “political capitalism”, or closer to what some analysts call “capitalism with Chinese characteristics”. What do you think about it?

Yes, this is happening in some countries. But the crucial questions will be whether political capitalism would be able generate higher rates of economic growth than liberal capitalism. If so, it will eventually tend to dominate, either because other nations will also want to grow faster and might imitate some of technocratic features of political capitalism, or because the relative power of the countries of political capitalism will increase. This is, I think, in the background of the current US-China trade war: an ideological battle waged on the terrain of economic growth.

 

-How do you think that the present situation with the pandemic of corona virus  will affect democracy and social justice in general?

I think that it might lead countries toward reassessing (increasing) the role of the state in public services such as health care and education. First neoliberalism and then austerity policies have practically gutted many public services of people and instruments. Health care and education  began to be regarded like any other business activity. But they are not, because they have huge externalities: without heathy and educated population there is no economic activity and growth, and without fully healthy population even economic growth of a few is meaningless. This is why health and education cannot be managed the way we manage ordinary business: we cannot treat hospitals like hotels whose objective is to optimize the number of beds and patients. That approach is responsible for health providers becoming in many cases overwhelmed during this crisis and not able to save lives.

- Climate change is now perhaps the most important parameter in the evolution of human societies. Can economists in their theories ignore it or behave as if it does not even exist?

Of course, economists must address climate change. But they should do so using the traditional economic instruments of taxation and subsidies, taxing activities and products that contribute to emissions, and subsidizing their more ecologically-friendly alternatives. The arguments in favor of degrowth do not acknowledge these realities. Their proponents believe that the world can stop growing, but do not want to accept that this is possible only if either some 10-15% of the world population that lives in abject poverty stays poor forever, or if the rich world cuts its income by at least a third. Neither of these two options is desirable or indeed feasible, and this is why degrowth ideologues are wrong.