Troops of the 1st Australian Division advance towards the Ypres front line, October 1917. Image: Hulton Archive/Getty Images.
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Before the First World War: what can 1914 tell us about 2014?

Old world decline, rogue empires, killing for God – looking at 1914, we can discover that there are many uncomfortable parallels with our own time.

As we enter the centenary year of the outbreak of the First World War, many uncomfortable parallels with our own time spring to mind. In 1914 the superpower that dominated the world, controlling the seas and ruling over a global empire of colonies, dominions and dependencies – Britain – was being challenged by a rival that was overtaking it economically and building up armaments on land and sea to assert its claim for a “place in the sun” – Germany. All of this is alarmingly close to the situation today, when America’s global supremacy is increasingly being challenged by the rise of China.

The ideological rivalries between the superpowers now and then look strikingly similar, too, at first glance: on the one hand, Britain then and America now, with their democratic political systems that make governments responsible to legislatures and removable by popular elections; on the other, Germany then and China now, with appointed and irremovable governments responsible only to themselves. A free press and open public on the one hand contrast with a controlled public sphere on the other, in which censorship and the trappings of a police state in effect muzzle the government’s most trenchant critics.

And of course there was, and is, the baleful influence of nationalism, with China’s sabre-rattling over disputed islands today yielding little in rhetorical vehemence to the kaiser’s bombastic speeches asserting German claims in Africa and the Middle East before 1914. The clash of ideologies and religions was evident before 1914, just as it is today, and in both cases concentrated on trouble spots in specific parts of the world.

Currently it is the conflicts in the Middle East we have to worry about, with a vicious civil war in Syria between rival Islamic factions standing proxy for the rivalry between Shia Iran and Sunni Saudi Arabia, while an additional element of danger is provided by Israel, with its nuclear arsenal, and again Iran, with its persistent attempts to build one. China and Russia are lining up behind one side while Nato and the US line up behind the other.

Before 1914 the critical trouble spot was the Balkans, where nationalist passions were overlaid with religious conflicts between Christian states, such as Greece and Bul­garia, and the Islamic Ottoman empire. The Habsburg monarchy, run by a Roman Cath­olic elite, was being challenged by Orthodox Serbia. Just as there have been wars pre­viously in the Middle East (in 1948, 1967 and most recently in 1973), so too there had been wars in the Balkans, between Russia and Turkey in 1877-78 and between Serbia and Bulgaria in 1885. So 1914, sometimes known in the region as the third Balkan war, was nothing new for these countries.

All the Balkan powers were heavily armed, buying up the latest weaponry from Europe’s leading manufacturers with loans supplied by the British, French and German governments. All of these countries were politically unstable, with governments being violently overthrown and terrorist organisations such as the Serbian “Black Hand” and the Internal Macedonian Revo­lutionary Organisation flourishing.

The Balkan states, much like nations of the Middle East today, to a degree stood proxy for larger powers, notably tsarist Russia, Germany and Austria-Hungary. They had come close to the brink during the first Balkan war in 1912-13, when Montenegro in alliance with Serbia attacked northern Albania, where there were virtually no Serbs or Montenegrins among the inhabitants. Austria-Hungary demanded Serbia’s with­drawal, Russia began to mobilise in support of the Serbs, and France declared its support for the Russians. The situation was defused only by a British intervention, resulting in an international conference that guaranteed independence for Albania.

The whole episode was an ominous foretaste of what happened in August 1914. With the break-up of the alliance of the Balkan states in 1913, Bulgaria went over to the patronage of the Germans, while Russia’s only client left in the region was Serbia. Serbian ambitions had already prompted Austria-Hungary to annex Bosnia and Herzegovina, with their substantial population of Serbs, in 1908. It would be just as wrong to dismiss all of this as irrelevant to the ambitions and rivalries of the Great Powers, as Boris Johnson has done recently, as it would be to dismiss the violent antagonisms in today’s Middle East as unimportant to international relations on a wider scale.

And yet the Balkan nations in the late 19th and early 20th centuries were no more mere puppets of Germany or Russia than the Middle Eastern states of today are puppets of America, Russia or China. As President Obama has discovered, trying to control Israeli governments is no easy task; he might tell the Israelis not to build any new Jewish settlements on the occupied West Bank but they carry on regardless. China and Russia might block western attempts to impose sanctions on the Assad regime in Syria and may continue supplying it with arms, but they have not been able to control it or stop its opponents, so they have become willing to explore ways of ending the conflict peaceably; their co-operation in the removal of chemical weapons signals their refusal to back the regime all the way.

China supplies Iran with weapons and with nuclear technology but can do little to mediate its policy in the Middle East, and its approach is tempered by the need to keep up good relations with the United States. Not least because of the growing importance of economic ties with the west, Russia has bowed to international pressure for sanctions on Iran and has curbed its arms supplies to the country. In all of this, there are few indications that the world’s great powers today are being drawn into regional conflicts as closely as they were in 1914.

One important reason for this lies in our changed attitudes to war. In Europe, the wars of the 19th century were limited in duration and scope, and seldom involved more than a handful of combatant nations. All told, deaths in battle between 1815 and 1914 were seven times fewer than combat deaths in the previous century. The wars of German unification in the 1860s, the Russo-Turkish war of 1877-78 and similar conflicts were swiftly resolved by decisive victories for one side or the other. Even the Crimean war of 1854-56 did not move much beyond the hinterland of the Black Sea.

In the 19th century fear of the upheaval and destruction caused by the French revolutionary and Napoleonic wars brought the leading European states together time and again in what was known as the Concert of Europe to resolve potential conflicts through international conferences. Though it was severely damaged in the 1850s and 1860s, the Concert was patched together again in the 1870s, when the Congress of Berlin redrew the map of the Balkans, while another Berlin conference sorted out colonial rivalries (without, needless to say, consulting any of the millions of people about to be colonised) in 1884. These institutions, like the United Nations of today, provided a forum in which diplomats and statesmen could work together to avoid war, and they largely succeeded.

If there is no sign that the UN, for all its inadequacies, is about to collapse, it is not least because the postwar settlement of 1945 rested on a general recognition that international co-operation in all fields had to be stronger than it was under the League of Nations, the UN’s ill-fated predecessor. The destruction caused by the Second World War, with its 50 million or more dead, its ruined cities, its genocides, its widespread negation of civilised values, had a far more powerful effect than the deaths caused by the First World War, which were (with exceptions, notably the genocide of a million or more Armenian civilians, killed by the Turks in 1915) largely confined to troops on active service. In 1945, Hiroshima and Nagasaki provided an additional, ter­rible warning of what would happen if the world went to war again.

In 1914, by contrast, very few people had any idea of the cataclysm that was about to descend on them. Just as admirals thought that the war at sea would be a rerun of the great naval engagements of the past, so the generals thought the war on land would be something like the conflicts of the 1860s, opening with rapid, railway-borne advances to the front, followed by a decisive encounter in which the other side would meet with a shattering defeat; peace would then be concluded after a few weeks or at most a couple of months. Since those days, however, barbed wire, patented in 1874, and the machine-gun, perfected in portable form a decade later, had become standard defensive equipment; at the same time, the internal combustion engine and armour plating were not yet advanced enough to produce tanks that could overcome these obstacles effectively and restore movement to warfare. A few recognised these inconvenient facts, notably the Polish banker Jan Bloch, whose Modern Weapons and Modern War, published at the turn of the century, argued that in the next major war, “the spade will be as important as the rifle” and forecast that the war of the future would be a gridlock in which quick victory would be impossible.

But nobody heeded this prediction, because generals, politicians and civil servants were unable to accept its denial of easy victory. By 1910 at the latest, the idea that a war was coming was shared by many – indeed, generated a momentum towards it. Admiral Jackie Fisher wrote of the atmosphere he created in the Royal Navy after 1902: “We prepared for war in professional hours, talked war, thought war, and hoped for war.” The chief of the German general staff declared in 1912 that war must come “and the sooner the better!”. War in this vision appeared as something not only inevitable, but also positive. A German novelist wrote of August 1914: “At last life had regained an ideal significance. The great virtues of humanity . . . fidelity, patriotism, readiness to die for an ideal . . . were triumphing over the trading and shopkeeping spirit . . . The war would cleanse mankind from all its impurities.” The war appeared as a chance to do something glorious in a prosaic age.

In like vein, British writers enthused about the opportunity that war would present:

To die young, clean, ardent; to die swiftly, in perfect health; to die saving others from death, or worse – disgrace . . . to die and carry with you into the fuller, ampler life beyond, untainted hopes and aspirations, unembittered memories, all the freshness and gladness of May – is that not a cause for joy rather than sorrow?

as Horace Annesley Vachell wrote in The Hill (1905). The war appeared as a release, a liberation of manly energies long pent up, a resolution to all the insoluble problems that had plagued European politics and society in increasing measure since the late 19th century: an escape into a simpler, clearer and more glorious reality.

War was also widely seen before 1914 by the upper classes across Europe as an assertion of masculine honour, like a duel, as it were, only on a much bigger scale. Duelling was a common way of avenging real or imagined slights to a man’s honour in virtually every European country at the time. The French politician Georges Clemenceau had fought a duel; so too had the Russian prime minister Pyotr Stolypin. Duelling was a frequent occurrence among the Junker aristocracy in Germany, and politicians in Austria-Hungary regularly engaged in duels. Only in Britain had they died out: the point of a duel was to vindicate one’s manly honour by standing unmoving as your opponent fired a bullet at you at twenty or thirty paces, and the invention of modern cricket, in which a man was required to face down a different kind of round, hard object as it hurtled towards him from the other end of the wicket, was a satisfactory (and comfortingly legal) substitute. Forcefulness, strength of will, self-assertion and standing firm against an enemy were all part of a code of behaviour of the upper-class men whose actions brought Europe and the world to war in 1914, in contrast to the flexibility and subtlety of the greater statesmen of an earlier generation, such as Bismarck, whose awareness of the precariousness of the German empire’s position in the international order was as great as Kaiser Wilhelm II’s disregard for it.

Such codes of male behaviour appear almost incomprehensible a century later. Politicians of the nuclear age are all too aware of the fragility of the world order. Masculine posturing nowadays earns only ridicule. The horrors of Nazi racism and genocide also put paid to the doctrine of social Darwinism, which had become widely accepted among European elites by the beginning of the 20th century but did not survive the war of 1939-45.

Remember them: wooden crosses recall victims of the 21st-century war in Iraq near Westminster Abbey, London, 2006. Image: Peter Macdiarmid/Getty.

Yet at the same time, the leaders of almost every European nation in 1914 were racked by anxiety about the future. Germany feared the growing might of Russia; Austria-Hungary was made nervous by the rise of Slav nationalism within its borders; Russia was afraid of further humiliation of the kind it had been forced to endure with its defeat in the war against Japan in 1904-1905. Internally, too, European states were in trouble, with strikes, suffragette campaigns and the threat of civil war in Ireland destabilising Britain; assassinations and labour unrest undermining tsarist autocracy in Russia; and the victory of the Marxist Social Democrats in Germany’s 1912 elections causing a crisis of confidence among the ruling elite.

One might point to the parallel of the present crisis in the eurozone, in which all the participant states hope to avoid a collapse but all are also pursuing their own interests and so differ on how it is to be averted; but the social unrest it has sparked has been confined largely to Greece, and the main states have been able to work together to limit the damage, with the result that collapse, so far, has been avoided.

Still, economic factors played a role in 1914 just as they do today. In France and especially in Britain, national debates opened up about the seemingly unstoppable success of the German economy. And indeed, German industry had already overtaken that of Britain by the eve of the war. It had increased Germany’s share of world industrial production fourfold since 1860, while Britain’s share had sunk by a third. Germany was producing twice as much steel as Britain, and dominated the chemical and electrical industries worldwide through firms such as Siemens, BASF, AEG and many others. In science the theories of Max Planck and Albert Einstein were revolutionising physics, while Robert Koch and his pupils were taking the lead in discovering the causes of one disease after another through their pioneering work in bacteriology. The motor car was a German invention, as was the diesel engine. There are parallels between such anxieties and the worry, sometimes extending to paranoia, in the US today about the rise of China. Yet so far American concerns have not translated into political action. The interventions of the US have been directed not against China’s role in other parts of the world but against medium or small regional powers such as Serbia, Afghanistan and Iraq.

Before 1914, however, there were many in Germany at least who thought that Ger­man economic and technological growth should, or would, translate into political power on the world scene. In the late 19th and early 20th centuries, the dominant notion of global power in Europe rested on the possession of overseas colonies. A newly united Germany had largely missed out on the spoils of empire in the “Scramble for Africa” in the 1880s. The British government was not opposed to recognising Germany’s claim to colonies; in fact, at one point there was a deal in the offing whereby London agreed to the Germans’ acquisition of the ramshackle and poorly defended overseas empire held by the Portuguese.

All this points to a huge difference between the world of 1914 and the one of today. A century ago, Britain, France, Spain, Portugal, Italy, the Netherlands, Germany, Denmark and Russia possessed vast colonies with millions of subjects. With its growing power and influence, the United States was also starting to join the club. The First World War was a struggle between empires and one of its products was a repartition of the globe, with Germany’s colonies seized and distributed among the victors.

Colonialism lost all legitimacy after 1945. The early 21st century is witnessing the growth of former colonies such as Brazil, or Nigeria, or India, into major players in the global economic game. In contrast to the decades of the cold war, when international relations were a bipolar system that pitted the Soviet Union against the western powers in direct opposition to each other, we now have a multipolar system. The world has become more like that of the late 19th century, although Britain, despite its vast overseas empire, was nowhere near as dominant as the United States has been since the collapse of communism. Then, too, international relations were constituted as a multipolar system; the difference was that almost all the major competitors were from within Europe itself.

The breakdown of this system was one of the main factors leading to the outbreak of war in 1914. Up to 1904-05, Britain had regarded France and Russia as its main rivals for global influence, but as dangerous Anglo-French colonial differences in Africa were settled, and Russia turned away from Asia following its defeat by Japan, the rise of Germany took centre stage and Europe divided itself, along the lines of the later cold war, into two armed and increasingly antagonistic camps. In an atmosphere that fostered largely positive attitudes to war this was an ominous development, and one without parallel in the early 21st century, for all the posturings over Syria or Iran of Russia and China on the one hand and the Nato powers, on the other.

There is another parallel between the two ages. Just as we are in the midst of an era of rapid globalisation today, so in 1914 processes of globalisation were well under way, thanks to the telephone, the steamship, and potentially the aeroplane. Mutual investment by French and German companies created new economic entities that crossed the Rhine. Cultural exchange, tourism, economic interpenetration, all were reaching global dimensions by 1914.

For all the Marxists’ convoluted attempts to prove that the driving forces behind the First World War were economic, the logic of capitalism told against war rather than for it. Yet neither economic rationality nor cultural familiarity proved an obstacle to conflict. The reason for this is not, however, ideological. Nothing could be less plausible than the current attempts of Conservative politicians and writers such as Michael Gove and Boris Johnson to portray the outbreak of the First World War as a clash between Britain’s liberal democracy and Germany’s authoritarian militarism.

In 1914 40 per cent of adult males in Britain did not have the right to vote; the troops who signed up were not volunteering to defend rights that nearly half of them lacked. All adult males in Germany could vote. The largest political party in Germany, the Marxist SPD, initially opposed the war, voted for war credits only because the government successfully presented the issue as one of defence against tsarist despotism, and was committed to a peace without annexations. By the second half of the war the kaiser had been forced to con­cede democratic reforms in Prussia. Kaiser Wilhelm – erratic, indecisive, unstable – was not Hitler. Imperial Germany was not a dictatorship.

One thing that those who want us to celebrate the First World War as a fight for British values have in common with the Blackadder television series is that all of them focus exclusively on the Western Front. But we need to raise our heads above the trenches and take in the wider dimensions of the war. That one of Britain’s two main allies was the despotic Russia of Tsar Nicholas II should banish any thoughts of the war having been fought in defence of “western liberalism” until Russia’s exit from the war in 1917-18. British propaganda of course portrayed the conflict in moral and ideological terms, rightly pointing to German atrocities in Belgium in the opening weeks, though it quickly came to exaggerate them in the process. However, there were many atrocities in the Balkans and on the Eastern Front, too, and it would be wrong if the commemorations about to begin neglected the wider European and global dimensions of the conflict in a simplistic parroting of the British propaganda of the time.

Perhaps the most striking difference between the world in 1914 and that of 2014 lies, in a way that would have surprised our ancestors of a century ago, in the greater power of religion today to disrupt the inter­national order. Whatever the First World War was about, it was a determinedly secular conflict. Only in the Ottoman empire, and the Balkans, perhaps, did religion play a role, yet even the Armenian genocide was justified by the Turks mainly in ethnic and security terms. The leading combatants in the First World War were pursuing decidedly secular interests.

Absurdly, Nigel Biggar, a professor of theology in Oxford, has leapt into the fray in Standpoint magazine to claim, with all the self-importance of his tribe, that morality – in other words, God – was on the British side in 1914. The argument is irresistibly reminiscent of J C Squire’s epigram of the day: “God heard the embattled nations sing and shout/‘Gott strafe England’ and ‘God save the King!’/God this, God that, and God the other thing –/‘Good God!’ said God, ‘I’ve got my work cut out!’”

Terrorism today may be fuelled mainly by religion, and religious conflicts certainly underpin political tensions in the Middle East, yet despite the belief of some on the Republican right in the US that a war over Israel will lead to Armageddon and the Second Coming, there is no evidence that religion plays a significant role in international relations between the major world powers today. For all the parallels with the nationalist passions that swept Europe in 1914, there is even less evidence that they drove Britain, Germany, Russia, Austria-Hungary or France to war. Statesmen later claimed that popular pressure propelled them into the conflict, but this was an ex post facto self-justification that should be treated with the scepticism every such claim of this kind deserves.

Meanwhile, in 1914 and after, nationalist passions in the main combatant powers were overwhelmingly the product of the war’s outbreak, not the cause. The war inaugurated three decades of nationalist hatreds in Europe, driven by the need to justify the conflict. They were made worse by what now appears the calamitous policy of national self-determination propagated by President Woodrow Wilson in his “Fourteen Points”. Economic rivalries broke out between the new states created after the war, making it impossible to clear up the financially ruinous consequences of the conflict, first triggering a disastrous inflation and then contributing to the catastrophe of the Slump. Democracies collapsed under the pressure of nationalist passions all over Europe in the 1920s and 1930s. The idea of an ethnically homogeneous nation state then caused untold suffering and millions of deaths between 1918 and 1948, as minorities were oppressed, expelled and murdered all over central and eastern Europe.

As we commemorate the First World War, we surely need to focus above all on the lessons to be learned from these tragic experiences. During the Cuban missile crisis of 1962, President John F Kennedy showed that he had paid attention: his reading of Barbara Tuchman’s The Guns of August convinced him that muddle, indecisiveness and poor communication between the leaders of the Great Powers in 1914 had caused the slide into war, and that a nuclear conflict with the Soviet Union could be avoided only if he made his position unambiguously clear to Nikita Khrushchev, as indeed he did.

In the early 21st century, however, when the threat of a nuclear conflict between the world’s leading powers has receded, the lesson we need to learn from the catastrophe of 1914 is a different one. Although France, Germany and other participants in the First World War will be telling us to stop a repetition of the disaster by building European unity and understanding, the focus of politicians should really be on the Middle East, the Balkans of the early 21st century, which still threaten to explode into a wider, more dangerous conflagration.

Richard J Evans is Regius Professor of History and President of Wolfson College, University of Cambridge

Picture: Archives Charmet / Bridgeman Images
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What Marx got right

...and what he got wrong.

1. You’re probably a capitalist – among other things

Are you a capitalist? The first question to ask is: do you own shares? Even if you don’t own any directly (about half of Americans do but the proportion is far lower in most other countries) you may have a pension that is at least partly invested in the stock market; or you’ll have savings in a bank.

So you have some financial wealth: that is, you own capital. Equally, you are probably also a worker, or are dependent directly or indirectly on a worker’s salary; and you’re a consumer. Unless you live in an autonomous, self-sufficient commune – very unusual – you are likely to be a full participant in the capitalist system.

We interact with capitalism in multiple ways, by no means all economic. And this accounts for the conflicted relationship that most of us (including me) have with capitalism. Typically, we neither love it nor hate it, but we definitely live it.

2. Property rights are fundamental to capitalism . . . but they are not absolute

If owning something means having the right to do what you want with it, property rights are rarely unconstrained. I am free to buy any car I want – so long as it meets European pollution standards and is legally insured; and I can drive it anywhere I want, at least on public roads, as long as I have a driver’s licence and keep to the speed limit. If I no longer want the car, I can’t just dump it: I have to dispose of it in an approved manner. It’s mine, not yours or the state’s, and the state will protect my rights over it. But – generally for good reason – how I can use it is quite tightly constrained.

This web of rules and constraints, which both defines and restricts property rights, is characteristic of a complex economy and society. Most capitalist societies attempt to resolve these tensions in part by imposing restrictions, constitutional or political, on arbitrary or confiscatory actions by governments that “interfere” with property rights. But the idea that property rights are absolute is not philosophically or practically coherent in a modern society.

3. What Marx got right about capitalism

Marx had two fundamental insights. The first was the importance of economic forces in shaping human society. For Marx, it was the “mode of production” – how labour and capital were combined, and under what rules – that explained more or less everything about society, from politics to culture. So, as modes of production change, so too does society. And he correctly concluded that industrialisation and capitalism would lead to profound changes in the nature of society, affecting everything from the political system to morality.

The second insight was the dynamic nature of capitalism in its own right. Marx understood that capitalism could not be static: given the pursuit of profit in a competitive economy, there would be constant pressure to increase the capital stock and improve productivity. This in turn would lead to labour-saving, or capital-intensive, technological change.

Putting these two insights together gives a picture of capitalism as a radical force. Such are its own internal dynamics that the economy is constantly evolving, and this in turn results in changes in the wider society.

4. And what he got wrong . . .

Though Marx was correct that competition would lead the owners of capital to invest in productivity-enhancing and labour-saving machinery, he was wrong that this would lead to wages being driven down to subsistence level, as had largely been the case under feudalism. Classical economics, which argued that new, higher-productivity jobs would emerge, and that workers would see their wages rise more or less in line with productivity, got this one right. And so, in turn, Marx’s most important prediction – that an inevitable conflict between workers and capitalists would lead ultimately to the victory of the former and the end of capitalism – was wrong.

Marx was right that as the number of industrial workers rose, they would demand their share of the wealth; and that, in contrast to the situation under feudalism, their number and geographical concentration in factories and cities would make it impossible to deny these demands indefinitely. But thanks to increased productivity, workers’ demands in most advanced capitalist economies could be satisfied without the system collapsing. So far, it seems that increased productivity, increased wages and increased consumption go hand in hand, not only in individual countries but worldwide.

5. All societies are unequal. But some are more unequal than others

In the late 19th and early 20th centuries, an increasing proportion of an economy’s output was captured by a small class of capitalists who owned and controlled the means of production. Not only did this trend stop in the 20th century, it was sharply reversed. Inherited fortunes, often dating back to the pre-industrial era, were eroded by taxes and inflation, and some were destroyed by the Great Depression. Most of all, after the Second World War the welfare state redistributed income and wealth within the framework of a capitalist economy.

Inequality rose again after the mid-1970s. Under Margaret Thatcher and Ronald Reagan, the welfare state was cut back. Tax and social security systems became less progressive. Deregulation, the decline of heavy industry and reduction of trade union power increased the wage differential between workers. Globally the chief story of the past quarter-century has been the rise of the “middle class”: people in emerging economies who have incomes of up to $5,000 a year. But at the same time lower-income groups in richer countries have done badly.

Should we now worry about inequality within countries, or within the world as a whole? And how much does an increasing concentration of income and wealth among a small number of people – and the consequent distortions of the political system – matter when set against the rapid ­income growth for large numbers of people in the emerging economies?

Growing inequality is not an inevitable consequence of capitalism. But, unchecked, it could do severe economic damage. The question is whether our political systems, national and global, are up to the challenge.

6. China’s road to capitalism is unique

The day after Margaret Thatcher died, I said on Radio 4’s Today programme: “In 1979, a quarter of a century ago, a politician came to power with a radical agenda of market-oriented reform; a plan to reduce state control and release the country’s pent-up economic dynamism. That changed the world, and we’re still feeling the impact. His name, of course, was Deng Xiaoping.”

The transition from state to market in China kick-started the move towards truly globalised capitalism. But the Chinese road to capitalism has been unique. First agriculture was liberalised, then entrepreneurs were allowed to set up small businesses, while at the same time state-owned enterprises reduced their workforces; yet there has been no free-for-all, either for labour or for capital. The movement of workers from rural to urban areas, and from large, unproductive, state-owned enterprises to more productive private businesses, though vast, has been controlled. Access to capital still remains largely under state control. Moreover, though its programme is not exactly “Keynesian”, China has used all the tools of macroeconomic management to keep growth high and relatively stable.

That means China is still far from a “normal” capitalist economy. The two main engines of growth have been investment and the movement of labour from the countryside to the cities. This in itself was enough, because China had so much catching-up to do. However, if the Chinese are to close the huge gap between themselves and the advanced economies, more growth will need to come from innovation and technological progress. No one doubts that China has the human resources to deliver this, but its system will have to change.

7. How much is enough?

The human instinct to improve our material position is deeply rooted: control over resources, especially food and shelter, made early human beings more able to reproduce. That is intrinsic to capitalism; the desire to acquire income and wealth motivates individuals to work, save, invent and invest. As Adam Smith showed, this benefits us all. But if we can produce more than enough for everybody, what will motivate people? Growth would stop. Not that this would necessarily be a bad thing: yet our economy and society would be very different.

Although we are at least twice as rich as we were half a century ago, the urge to consume more seems no less strong. Relative incomes matter. We compare ourselves not to our impoverished ancestors but to other people in similar situations: we strive to “keep up with the Joneses”. The Daily Telegraph once described a London couple earning £190,000 per year (in the top 0.1 per cent of world income) as follows: “The pair are worried about becoming financially broken as the sheer cost of middle-class life in London means they are stretched to the brink.” Talk about First World problems.

Is there any limit? Those who don’t like the excesses of consumerism might hope that as our material needs are satisfied, we will worry less about keeping up with the Joneses and more about our satisfaction and enjoyment of non-material things. It is equally possible, of course, that we’ll just spend more time keeping up with the Kardashians instead . . .

8. No more boom and bust

Are financial crises and their economic consequences part of the natural (capitalist) order of things? Politicians and economists prefer to think otherwise. No longer does anyone believe that “light-touch” regulation of the banking sector is enough. New rules have been introduced, designed to restrict leverage and ensure that failure in one or two financial institutions does not lead to systemic failure. Many would prefer a more wholesale approach to reining in the financial system; this would have gained the approval of Keynes, who thought that while finance was necessary, its role in capitalism should be strictly limited.

But maybe there is a more fundamental problem: that recurrent crises are baked into the system. The “financial instability” hypothesis says that the more governments and regulators stabilise the system, the more this will breed overconfidence, leading to more debt and higher leverage. And sooner or later the music stops. If that is the case, then financial capitalism plus human nature equals inevitable financial crises; and we should make sure that we have better contingency plans next time round.

9. Will robots take our jobs?

With increasing mechanisation (from factories to supermarket checkouts) and computerisation (from call centres to tax returns), is it becoming difficult for human beings to make or produce anything at less cost than a machine can?

Not yet – more Britons have jobs than at any other point in history. That we can produce more food and manufactured products with fewer people means that we are richer overall, leaving us to do other things, from economic research to performance art to professional football.

However, the big worry is that automation could shift the balance of power between capital and labour in favour of the former. Workers would still work; but many or most would be in relatively low-value, peripheral jobs, not central to the functioning of the economy and not particularly well paid. Either the distribution of income and wealth would widen further, or society would rely more on welfare payments and charity to reduce unacceptable disparities between the top and the bottom.

That is a dismal prospect. Yet these broader economic forces pushing against the interests of workers will not, on their own, determine the course of history. The Luddites were doomed to fail; but their successors – trade unionists who sought to improve working conditions and Chartists who demanded the vote so that they could restructure the economy and the state – mostly succeeded. The test will be whether our political and social institutions are up to the challenge.

10. What’s the alternative?

There is no viable economic alternative to capitalism at the moment but that does not mean one won’t emerge. It is economics that determines the nature of our society, and we are at the beginning of a profound set of economic changes, based on three critical developments.

Physical human input into production will become increasingly rare as robots take over. Thanks to advances in computing power and artificial intelligence, much of the analytic work that we now do in the workplace will be carried out by machines. And an increasing ability to manipulate our own genes will extend our lifespan and allow us to determine our offspring’s characteristics.

Control over “software” – information, data, and how it is stored, processed and manipulated – will be more important than control over physical capital, buildings and machines. The defining characteristic of the economy and society will be how that software is produced, owned and commanded: by the state, by individuals, by corporations, or in some way as yet undefined.

These developments will allow us, if we choose, to end poverty and expand our horizons, both materially and intellectually. But they could also lead to growing inequality, with the levers of the new economy controlled by a corporate and moneyed elite. As an optimist, I hope for the former. Yet just as it wasn’t the “free market” or individual capitalists who freed the slaves, gave votes to women and created the welfare state, it will be the collective efforts of us all that will enable humanity to turn economic advances into social progress. 

Jonathan Portes's most recent book is “50 Ideas You Really Need to Know: Capitalism” (Quercus)

Jonathan Portes is senior fellow The UK in a Changing Europe and Professor of Economics and Public Policy, King’s College London.

This article first appeared in the 22 June 2017 issue of the New Statesman, The zombie PM

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