Twenty-First Century Capitalism by Robert Heilbroner

Author:Robert Heilbroner
Language: eng
Format: epub
Tags: BUS000000
Publisher: House of Anansi Press Inc.
Published: 1992-12-31T16:00:00+00:00

V

WHAT HAS BEEN the ultimate impact of Keynesian economics on the politics of capitalism? The question really means: how successful has the policy of “Keynesian” intervention been in sustaining the vitality of the system?

The answer is not simple. Despite Keynes’s own measured political views, his economics was at first regarded as a radical critique of capitalism because of its explicit doubts as to the self-sustaining capabilities of the unsupported private sector. Today it is possible to see early Keynesianism in a different light, as a powerful force for enhancing economic stability and thereby moderating the political temper of the system. It is also the case that as the postwar boom continued it became ever more difficult to interest a relatively contented labour force in seeking far-reaching emendations in a social order that was working very well. Even in those nations, such as Sweden, where policies of substantial income distribution and social welfare were introduced, the aim of its “socialistic” measures was always to test the outer limits of liberal capitalism, not to cross over into the uncertain terrain of a revolutionary postcapitalist society. In the second phase of the postwar world this conservative turn became even more apparent. As successful Keynesianism gave way to chronic and endemic inflation, the anti-inflation policy of governments bore down much more painfully on labour than on capital. Thus, despite its reputation, the effect of Keynesian economics both in its early and later forms seems to have strengthened the interests of capital rather than undermining them and thereby to have served a conservative, not a radical political end.

I said, however, that I do not think the political effect of Keynesianism is easy to assess. For if there is one conviction that is central to conservatism, it is that the system as a whole functions best when it is least constrained by government. What we find in both the heyday and the decline of Keynesianism is precisely the opposite of this. In the first period government came to be viewed as responsible for growth; in the second, as responsible for stopping inflation. In both periods the common conviction — expressed in the language of action, not in the rhetoric of politics — was that government held the key to the future, and that a failure on its part would seriously damage the prospects of that future.

This notion is not conservatism. It is the expression of an awareness that the economic order of the system is more integrally connected with, and more dependent on, the political order than used to be thought the case. In a word, what we see is the increased politicization of capitalism, for better or for worse. In the final chapter we will think about the long-run implications of this change.

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