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The Future of Capitalism: Facing the New Anxieties
14 January @ 1:00 pm - 2:00 pm
Deep new rifts are tearing apart the fabric of Britain and other Western societies: thriving cities versus the provinces, the highly-skilled elite versus the less educated, wealthy versus developing countries. As these divides deepen, we have lost the sense of ethical obligation to others that was crucial to the rise of post-war social democracy. So far these rifts have been answered only by the revivalist ideologies of populism and socialism, leading to the seismic upheavals of Trump, Brexit and the return of the far right and the far left in Europe. We have heard many critiques of capitalism but no one has laid out a realistic way to fix it, until now.
The Henry Jackson Society is pleased to invite you to join Professor Sir Paul Collier in a fascinating discussion about the future of capitalism and in finding a way how to save capitalism from itself.
Professor Sir Paul Collier – is the Professor of Economics and Public Policy at the Oxford Blavatnik School of Government. He is the author of The Bottom Billion, which won the Lionel Gelber Prize and the Arthur Ross Prize awarded by the Council on Foreign Relations, The Plundered Planet, Exodus and Refuge (with Alexander Betts). Collier has served as Director of the Research Department of the World Bank, and consults with the German and many other governments around the world.
Jesse Norman MP is the Member of Parliament for Hereford and South Herefordshire. He read classics at Oxford and completed a masters and a doctorate in Philosophy from University College London. Before entering politics, he ran an educational project working in Communist Eastern Europe, and was a director at Barclays. He has been an Honorary Fellow at UCL, a Governor of the National Institute for Economic and Social Research, and a Visiting Fellow at All Souls, Oxford. His previous books include a celebrated study of Edmund Burke.
On 14 January 2019 the Henry Jackson Society hosted Professor Sir Paul Collier of the Blavatnik School of Government at the University of Oxford. The discussion centred around the future of capitalism and the challenges that it faces.
Professor Collier started by underlining the importance that there is indeed a future for capitalism, because it is the only system that can universally drive up living standards around the world. He then cited the three big derailments of capitalism in the modern age. According to him, the first occurred in the 1840s when a lack of public policies in Northern English cities – most notably Bradford –suffered from a crisis in public confidence. According to Professor Collier, pragmatic solutions were delivered for real anxieties, and the solution was to invest extensively into public health. The second occurred in the 1980s with two new rifts in society. He named these as regional and educational; up until the 1980s, regional differences in income had been narrowing. But since 1980 these forces had begun to work in reverse, with the core economic hub of the UK beginning to cement itself in the South East of the country. He attributed this to the increasing globalisation of the global economy and the relative decreasing of domestic trade in favour of the international. On top of this was the emergence of London has a world financial centre, in part due to its capacity to be able to communicate with both New York and Tokyo simultaneously due to its advantageous time zone.
Third, Professor Collier brought up the current predicament that he believes capitalism finds itself in. He believes that capitalism rose because of rising technology. But with technology comes complexity, and with complexity you need ever-increasing expertise. The ‘fancier’ that technology gets, the more redundant industrial workers become. However, unlike the 1840s, Professor Collier believes that we have no done enough to combat this problem. Why? Partly, due to the divisiveness of our politics. As an economist, Professor Collier advocated that successful people are successful because they are productive, at least to those that are on the right. Yet on the left, unproductive people are embraced under the umbrella of the ‘human rights of the victimised’. The result he believes, is the melting away of a shared identity which he believes we have seen in Britain, France and the United States.
Finally, Professor Collier took note of the solutions to the current predicament we face, starting with the ever increasing skill gap. He explained how the current education system is solely directed to the cognitively gifted third of the population, whilst not enough emphasis is put on the skills of the other two thirds, whose expertise are usually more practical. He notes that the UK is particularly bad at this, the best job being done by Finland. The second solution was spatial. Professor Collier used his hometown of Sheffield to demonstrate that how a broken city is one where the closer to the centre you are, the more unproductive it is. He believes that the Government needs to do more to make firms believe in an area, which can be done with both infrastructure and skills. But of course, how do you pay for it? Naturally, Professor Collier believes that the investment should be paid through taxes, but emphasized that land owners should be targeted, and with that, the most expensive land. He indicated that whilst London land is extremely productive, it is not necessarily because of the land owners. With that, he inferred that taxes should not go towards funding benefits, but harnessing the skills of the practically minded two-thirds of the population.
Finally, Professor Collier ended with a word of advice. He underlined that we have to quash the ‘I deserve it’ attitude – and that of the victimized. A ‘hard centre’ is need to quash the myths of the right and the left, he believes. To truly ward off the plight of capitalism, we need to accept that we are all participants in productivity, thus a shared belonging and common purpose is essential.