16 - The futureof capitalism

Summary

Government access to the capital market is critical, both for initiating the transition and for sustaining the spread of capitalism domestically. Prior to World War I, it was conventional wisdom that the key to the success of US capitalism was the continental extent of its domestic market, while the success of UK capitalism was due to the global extent of its market overseas, led by its colonies. Access to capital was crucial for countries making the transition to capitalism in preindustrial Europe, in the nineteenth-century age of globalization, and in the most recent age of globalization. The future of capitalism in the twenty-first century will be conditioned by maintaining rapid economic growth, peaceful global relationships, and efficient global trade, factor, and financial markets. Even though global capitalism will always generate struggles between winners and losers, rapid economic growth is the prize that makes all participants more tolerant of financial crises and competitive adjustment.