Is the end nigh for global capitalism? John Lloyd on a clutch of fiscal jeremiads

Here is a group of books that are, in the main, charting failure; the first fruits of the end of the optimistic narrative of growth fuelled by South-east Asia and the passing of communist command economies into successful capitalism.

The most scholarly of the lot, East Asia in Crisis (essays edited by Ross H McLeod and Ross Garnaut, Routledge, £17.99), is the least quotable and easily assimilated, but probably among the most valuable. The dominant note is anxious; David Hale, in a fine essay on the lessons East Asia might learn from the IMF's rescue of Mexico, says that the much-criticised IMF's policies will strengthen that region's economies but that "they will have to be supported by a steadily expanding global economy throughout the early years of the 21st century".

Yet it is exactly this growth, and the means required for achieving it, that are the targets for the scorn, despair and fear of most of these books, save one: Patrick Minford's Markets not Stakes (Orion Business, £20) is largely dedicated to showing that the growth of recent years, and the rising inequality of the "Anglo-Saxon" states (the misnomer for the US and Britain) that has accompanied it, is good, since the tide has raised all boats, and the vast rewards accruing to the top of the heap "merely reflects the substantial rises in the rewards to those with skill and good entrepreneurial fortune. There is no evidence that ordinary people (as opposed to some 'left-wingers') begrudge others their good fortune." Minford cannot have talked to these ordinary people for some time, or simply assumes that anything short of insurrection is glad acquiescence. Dislike of inequality is quite common, even as resignation to it is also common: it is one of the largest reasons for popular attachment to the National Health Service and comprehensive schooling, in spite of the problems of both.

Susan Strange's Mad Money (Manchester University Press, £13.99) provides the antidote to Minford. She is more of a polemical than an academic economist (more, even, than Minford); her concern since her 1986 book Casino Capitalism is to show that globalisation tips us the chaos whose edges, Paul Ormerod argues in his much more judicious work (Butterfly Economics, Faber & Faber, £16.99), we always nudge.

"Our problem in the next century," Strange flatly concludes, "is that the traditional authority of the nation state is not up to the job of managing mad international money." She justifies this by reference to a long list of ills - the ability of big international players to evade governmental control and taxation, the leaping growth of organised crime, the new wave of gigantism in business mergers, the "moral contamination" of rich rewards for the leaders and downsizing for the employees. She does not allow herself to be diverted by any consideration of popular acquiescence in all this; where Minford errs badly by assuming agreement to inequality, Strange errs in not discussing whether or not the lower paid within rich states have benefited at all, and more seriously in failing to ask why the masses in China and India have seen their living standards rise as both economies have gone in for relative liberalisation.

Edward Luttwak's book, Turbo Capitalism (Weidenfeld and Nicolson, £20), fills some of these gaps. A powerful and relentlessly pessimistic writer, Luttwak has for years made the literary classes shiver with his forecasts of the inevitability of fascism driven by the force of what he felicitously calls turbo-capitalism - the increasingly unrestrained, globally competent, bottom-line-obsessed form of the free market he claims we now have. Governments, whether of the right or the left, have nothing to say about this other than to promise better organised turbo-capitalism, desperately hoping that the growth it has so far engendered will keep on lifting up the boats. The inevitable failure of this strategy will lead, Luttwak says, to populism and a kind of fascism: "Populism in all its versions offers the promise of a more personal economic security to the broad masses of office workers and government employees now threatened by . . . unemployment. It is, in effect, a product-improved version of fascism, though we would be spared the frantic version of the original because there are very few expendable youths in today's small families."

Luttwak's vision seems less demented to me now than it did when I first read it, but it still seems far-fetched. It has not so far appealed to any country in the kind of economic extremis he describes; where it has, in the former Yugoslavia, it was a response not to economic but to national crisis. Among advanced-country parties that do show a major "product-improved version" of fascism, France's Front National remains uniquely large, and is presently undergoing sapping travails as it seeks a life after its increasingly unpopular leader.

The one book that engages the heart as well as the mind is Richard Sennett's The Corrosion of Character (W W Norton, £14.95). Sennett makes an elegiac case for the kind of character bred in the society we are losing - one in which the dignity of ordinary, long-term, secure labour encouraged habits of dependability and long-term care for family and children. These, he says, are threatened by the consequences of turbo-charged, and insecure, capitalism.

Sennett is tremendous in his close listening to the people he interviews: from Rico, upwardly mobile son of a janitor who had put his all into his family's welfare; to Rodney Everts, foreman at a computerised bakery, where "baking" is reduced to pressing a bagel icon on a Windows programme; even to the entrepreneurs and world leaders who congregate each year at Davos, in Switzerland, to hear each other underpin globalisation. From these voices comes a threnody for a lost world Sennett does not romanticise but whose lost securities and care for inner needs he mourns.

"What political programmes follow from those inner needs I don't know," he writes. "But I do know a regime that provides human beings no deep reasons to care about one another cannot long preserve its legitimacy." I cannot, or perhaps do not want to, accept that. But it is worth a thought, at the end of a nasty year.

This article first appeared in the 04 December 1998 issue of the New Statesman, Just get out and have fun!