Is the West losing its taste for capitalism?
A recent survey by the polling firm GlobeScan has found higher support for the “free market” among Chinese (67%) than among U.S. residents (59%). For Americans making under $20,000 annually, The Economist pointed out, faith in capitalism fell from 76% to 44% in a single year. Nor is this strictly a U.S. phenomenon. In France, less than a third of those polled believe that the free market is the best option, down from 42% in 2002. The economic crash of the past few years appears to be the main culprit.
As we’ve noted before, Peter Drucker expressed his own doubts about capitalism. “I am for the free market. Even though it doesn’t work too well, nothing else works at all,” Drucker declared in Managing in the Next Society. “But I have serious reservations about capitalism as a system because it idolizes economics as the be-all and end-all of life. It is one-dimensional.”
In Drucker’s view, the very notion of capitalism has become outdated. Indeed, one of his most famous works, from 1993, carries the title Post-Capitalist Society. “The real, controlling resource and the absolutely decisive ‘factor of production’ is now neither capital nor land nor labor,” he wrote in that book. “It is knowledge.”
Beyond that, Drucker disliked the way that capitalism tempts people to lose sight of the long term. In The Frontiers of Management, Drucker noted that his favorite economist, Joseph Schumpeter, had “serious doubts about the free market” and the way its practitioners tended to be “driven from transaction to transaction by short-term expediency.”
But what bugged Drucker, above all, was the notion attendant to capitalism that what is good for business will automatically accrue to the common good. As he wrote in Management: Tasks, Responsibilities Practices (and as we invoked earlier, after scandal erupted on Wall Street): “Free enterprise cannot be justified as being good for business. It can be justified only as being good for society.”
What do you think: Is capitalism broken? Can it be fixed?