Politics and markets

Having considered the historical repudiation of state socialism (1989) and market fundamentalism (2008), historian Eric Hobsbawm suggests that mere institutional reform will prove inadequate to the unavoidable task of setting humanity on a better path than the one it has known since the advent of the modern age. The issue no longer conforms to a markets or politics choice, as it had since the mid-19^th century. Rather, as Hobsbawm argues:

The crucial difference between economic systems lies…in their social and moral priorities. In this respect I see two crucial problems.

The first is that the end of communism has meant the sudden end of the values, habits and social practices by which generations had lived — not only those of the communist regimes, but also those of the pre-communist past that had been preserved under these regimes. We must recognise the depth of shock and human calamity brought about by this abrupt and unexpected social earthquake.

This sense of social disruption and disorientation remains, at least for all except those born after 1989, even when economic hardship no longer dominates post-communist populations. It must inevitably take several decades before post-communist societies find a stable way of living in the new era and some of the consequences of social disruption, institutionalised corruption and crime may take even longer to eradicate.

The second is that both Western neoliberalism and the post-communist policies it inspired deliberately subordinated welfare and social justice to the tyranny of the GDP: maximum and deliberately inegalitarian economic growth. In doing so they undermined, and in former communist countries destroyed, the systems of social security, welfare, the values and aims of public service.

This is no basis either for the European "capitalism with a human face" of the post-1945 decades or for satisfactory mixed post-communist systems. The purpose of an economy is not profit but the wellbeing of all people, just as the legitimation of the state is its people not its power.

Economic growth is not an end but a means to good, human and just societies. It does not matter what we call regimes that pursue this aim. It does matter how, and with what priorities, we combine the public and private elements in our mixed economies. That is the key political question of the 21^st century.