Moving through former incarnations to its current version – 4.0 – Kaletsky shows how, in the evolution of its different phases, capitalism has been polarised. The breaking down of the 1930s classic capitalist system was followed by a Keynesian model emphasising a greater role for the government and a lesser role for the market. In contrast, the rapid inflation of the late 1960s and 1970s was followed by the Thatcher/Reagan assumption that the market was right and the government wrong. The new evolution recognises that governments and markets are both wrong – that we need interaction between governments and markets, theorists and politicians.
Kaletsky argues that, up to now, ways of thinking outside a monopolistic paradigm have not been regarded as legitimate, forcing thinkers at the cutting edge to have their voices stymied. Now, with China’s dragon on the rise and Western capitalism reinventing itself, those thinkers must come to the fore. For this is a climate where, as he laconically pointed out in a recent interview, Keynes himself would not get a job in any
economics department in any university in the world today. Clearly, the need for radical re-evaluation is paramount.
Capitalism 4.0: The Birth of a New Economy by Anatole Kaletsky (Bloomsbury) £20