Sir Paul Collier argues that we need a revival of the ethical state to address the deepening rifts in western societies.
As a professor of economics and public policy at the Blavatnik School of Government at Oxford University and currently a visiting professor at Sciences Po, Paul Collier has authored many books on development economics and is regarded as one of the world’s esteemed development economists. His latest book, The Future of Capitalism (2018), takes an original, multidisciplinary approach to the discontent we currently see in the rich western world. Drawing on ethics, sociology, psychology, political science, geography, and economics, Collier sets out to understand the failures of contemporary capitalism – a journey that leads him to the need for a new, ethical state.
Collier’s very first lines set the scene of a western world we are all too familiar with. “Deep rifts are tearing apart the fabric of our societies. They are bringing new anxieties and new anger to our people, and new passions to our politics.” He adds: “The social bases of these anxieties are geographic, educational and moral.” Think Brexit, Trump, Paris versus les campagnes, blue against white collars, explosive Thanksgiving dinners etc. The biggest of these rifts, Collier believes, is that which divides the highly educated and the less educated, and also the increasing division between rich, cosmopolitan metropolises and provinces in decay. Two types of politicians — ideologues of the left and right and charismatic populists — exploit frustration and despair. Unfortunately, while “both ideologues and populists thrive on the anxieties and anger generated by the new rifts, they are incapable of addressing them.”
But how did these rifts become so deep? The captivating feature of this work is Collier’s ability to answer this question through the optics of ethics, social psychology and economics: an approach that allows Collier to look beyond “economic man”, a rational, greedy human being, as the base of economic and political theory to “social man”, an individual whose course of action is steered by three distinct obligations. The strongest comes from intimacy, the need to provide care and love for one’s children or family. The weakest obligation is that towards distant people in distress. In between, are the gentle pressures such as esteem and shame that enable us to exchange obligations – the “I scratch your back if you scratch mine” interactions in our world. Social man is still rational, he maximizes utility, yet he doesn’t only get utility from consumption, but from esteem and fulfilling moral obligations as well. We then see a human not only driven by what he “wants”, but also by what he “ought” to do.
From the idea of social man, Collier advances his central principle: it is the decline of “reciprocal obligations” that has led to the social and economic divides we see today. The Postwar Britain in which Collier grew up in was, in his own nostalgic depiction, a society bound together by a web of reciprocal obligations, which in turn gave rise to a strong sense of shared identity. A widespread political narrative and belief that the fortunes of cities and provinces were bound together, and that the wealthy and established had a stake in educating young ambitious minds like himself, drove support for large public investment. It also bound the many corporate executives by an obligation to stakeholders (in contrast to only shareholders today), moderating their pursuit of short-term profit for the sake of long-term prosperity of the communities they were a part of.
But more recently, this web has unravelled as class divides, alienating the educated from the less educated, and regional cleavages, separating dense metropolitan areas that attracted many educated professionals from smaller cities and towns that did not, have put national loyalties, identity and mutual obligations under pressure. The responsible for this decline of reciprocal obligations, Collier argues, have been extreme libertarians, on the one hand, and utilitarians and Rawlsians, on the other – both groups who neglected social man and his obligations in favor of policy with economic man at the center. At the same time, economic forces quickened the erosion of reciprocal obligations: globalization and technological innovation rewarded metropolitan, highly educated citizens, and left the lesser-educated of industrial cities behind.
The result of their attacks on mutual obligations is what Collier calls the ‘Rottweiler society’. This is “a society drifting towards aggression, humiliation, and fear.” To change this current course of western societies, Collier proposes a pragmatic solution with ethics at its center: to revive “an ethical state that meets standards that are built on our values, honed by practical reasoning, and reproduced by society itself.” To Collier, we need to return to the centrist ideal of the social democratic state of his post-war UK youth, that is a welfare state upheld by reciprocal obligations of civic cooperation and mutual aid.
To do so, western societies need reform on two levels: ethical and technical. Ethical reform needs to restore mutual obligation at all levels: global, national, corporate, and familial. The book is full of inventive proposals to achieve this, from the establishment of a new international body able to coordinate the diplomatic efforts of the world’s great powers to reforming corporate boards and establishing socioeconomically integrated schools, to name a few. The most radical technical reform Collier proposes is for a modern form of “Georgeism”. Collier believes that we need to tax more forms of rent, including taxing educated, metropolitan citizens more steeply than their equally well-educated provincial counterparts, a reform he defends by highlighting the fact that the former earns more due to their proximity to others like them, not necessarily because of superior skill.
The Future of Capitalism is a fascinating and exquisitely written read. Collier brings a refreshing, multidisciplinary perspective on perhaps the largest economic and political question of them all: how we can get western societies to not only prosper in terms of economic growth, but ‘flourish’ socially and economically? He proposes many realistic and pertinent reforms on how to get to a society ungirded by reciprocal obligations, and though they can seem radical at first, he firmly holds on to the pragmatism of the “hard centre” which Collier believes is needed to escape “The Rottweiler Society” and flourish as an ethical state. Though we can accuse Paul Collier of treating the social democratic state of his youth with a little too much nostalgia, and that not all his proposals reflect the centrism he advocates for, but rather radical solutions, “The Future of Capitalism” delivers a much needed debate that puts multidisciplinarity at the centre of how we can understand where we’re heading and pragmatism at the centre of how to change our current course.