8 - How Capitalism Will Change

Summary

Niels Bohr, the brilliant Nobel laureate in physics, once complained, “It is difficult to make predictions, especially about the future.” Despite his warning, let's try. Even if we cannot know exactly how capitalism will change, we can, perhaps, detect some probable trends and directions.

Our first task is to survey some of the major forces that could lead to important institutional transformations. We then ask what types of general systemic change might result from such institutional transformations. Finally, we turn to existing capitalist systems and speculate briefly but with more specificity on how they might change in the next half-century.

Short-Run Factors Possibly Influencing Major Institutional and Systemic Change

Traumatic political/economic events are often a cause of major institutional change. For instance, Russia's defeat in the Crimean War (1854–56) set in motion forces that resulted in the abolition of serfdom five years later. The Great Depression of the 1930s led to greater state intervention into the economies of the OECD nations and much higher welfare transfers to the population. Less dramatically, British discontent with slow, uneven production growth in the post–World War II years appears to have played a major role in Margaret Thatcher's 1979 political victory and to have allowed her to make changes in the economic system, particularly the dismantling of governmental controls and detailed planning of the economy.