Book Monitor: Capitalism 4.0

It looks like the Institute for New Economic Thinking (see posts of 6, 9 and 17 April 2010) has started to push Capitalism 4.0 (Bloomsbury), Anatole Kaletsky’s new book, hard. According to an interview with Kaletsky on the institute’s site he identifies four versions of capitalism:

1.0  – The original.

2.0  – The New Deal and Keynesianism. From the 1930s onwards.

3.0   – Market fundamentalism as espoused by Margaret Thatcher and Ronald Reagan. From the 1970s onwards.

4.0 – The form of capitalism that has emerged since the crisis of 2007-9. Accepts both markets and governments can be catastrophically wrong but sees the recognition of fallibility as empowering. Welcomes checks and balances.

The obvious problem with this schema is that it is not really about capitalism itself. It is more accurate to describe it as being about different policy responses to capitalism.

It is also not even a good description. Free market economics has not been a mainstream view since the early 1980s. Today’s orthodoxy combines an acceptance that there is no alternative to the market with pragmatic support for extensive state intervention.