The New Economy is long gone. The dotcoms are no more. The internet is dull. Globalisation is so deeply disputed that even its chief beneficiary, the US, seems to be pulling back from global engagement. Government is in fashion again as a problem solver. Financial markets are crashing in an all-too-familiar pattern of boom and bust. In short, it seems little is left of the idea, so dominant in the second half of the 1990s, that capitalism was taking a new form that would create opportunities for social advancement as well as profit.
That vision rested on two linked propositions. First, the main focus for economic decision-making had shifted from the national to the global. Second, the principal sources of wealth creation had moved from tangible assets, such as land and raw materials, to intangible assets such as knowledge and creativity, expressed through innovation and new technology. The globalised, digital and knowledge-driven economy was meant to be quite different from the industrial, national capitalism it preceded. When the dust settles, what will remain of that argument?
Alexander Bard and Jan Soderqvist, the authors of Netocracy (Reuters, 280pp, £17.99), are convinced that we stand on a historic fault line with capitalism behind us and informationalism ahead. They have coined a new vocabulary to describe the social structure of this new society. Nexialists and eternalists are members of the netocracy, which protects its power and status through its privileged position in global networks, while the powerless consumatariat languishes at the bottom of the social pile. The industrial proletariat was defined by its labour: the consumatariats are defined by the pap they watch on television. Although Netocracy contains interesting insights into the growing likelihood of populist violence among the displaced and dispossessed, its central claim that capitalism is collapsing is never convincing. Bard and Soderqvist argue that their post-capitalist, informationalist society is always in motion, a feature that Marx long ago attributed to capitalism.
A far more intriguing, readable account of how digital technology is changing society is provided by the witty David Weinberger in his thoughtful Small Pieces Loosely Joined (published by Perseus in September, 240pp, £12.99). Weinberger's enthusiasm for the web is undiminished by the dotcom crash because he never saw it primarily as a tool for business, but as a medium for collaboration, gossip, speculation and creativity. The web's great strength is that it is not the basis for a new economy, and cannot be captured by corporations or governments.
Weinberger's argument - that, from capitalism, a new social realm is emerging in which people are better able to communicate and collaborate - is all the more persuasive for its subtlety and humour.
Ellen Meiksins Wood would not be remotely impressed with either book. The Origin of Capitalism (Verso, 213pp, £13) opens with an interesting question but delivers a predictable answer. To imagine that capitalism could have different possible futures, mixing different kinds of companies, public services, forms of ownership and labour, requires us to ask whether it could have had different possible pasts. Capitalism is not an expression of a trans-historic impulse to improve labour productivity or create new products. It is not human nature. It arose in specific conditions in agrarian England and then spread. Capitalism was not embryonic in feudalism, waiting to flower. European feudalism was very diverse. It produced different outcomes, only one of which was "capitalism" based on private property.
Meiksins Wood convincingly explores the various explanations for the rise of capitalism, but fails to translate that analysis into insights on future alternatives. She implies that there is little difference between the social market economies of Scandinavia, the authoritarian market economy of Singapore and the Wall Street version of US capitalism. There is only one alternative, she offers lamely, at the end: socialism. But what that might amount to, in a global context, after the collapse of communism, she does not say.
Robert Brenner's excellent The Boom and the Bubble: the US in the world economy (Verso, 303pp, £15), completed more than a year ago, shows an uncanny ability to map the future. In the final pages, Brenner questions American confidence that the crony capitalism revealed in the Asian economic crisis of the late 1990s could never afflict the US. His conviction that the financial bubble that sustained the US economy around the turn of the century would be exposed as corrupt as well as misguided has now been proved right.
The story is told with a dizzying array of economic data, in a framework of Marxist economic analysis. Yet its main ingredients are very simple. The world economy enjoyed an unparalleled period of growth between 1948 and 1971, when capitalism was industrial rather than financially driven, and international in scope rather than global, with the US, Germany and Japan as the main players. However, this boom period sowed the seeds of its own crises.
Overinvestment in manufacturing capacity in developing economies, particularly in Asia, destabilised the otherwise orderly system, creating a glut of products. This, combined with lower US labour productivity, propelled the world into a series of increasingly troubling crises as the US stumbled to recover.
Brenner argues that the fundamental problem of manufacturing overcapacity and excessive competition has never been tackled properly, and has appeared in a series of financial bubbles and currency crises ever since. Seen in this longer perspective, the new economy bubble of the mid-1990s, according to Brenner, was not the rebirth of the US economy but just another expression of its tendency to crisis. The growth rates achieved in the mid-1990s were feeble compared with the sustained growth of the old economy between 1950 and 1970.
Brenner refuses to be seduced by the New Economy. However, the least satisfactory aspect of his analysis is his reliance on manufacturing as the driving force for change in the rest of the world economy, the lack of a compelling account of the changing structure of advanced econo-mies, and the real improvements in productivity and innovation which took place in the US economy in the 1990s. The idea that we could sort out all our problems, if only the world produced fewer cars, CD players and washing machines, seems a little far-fetched. Both Joseph Stiglitz, in Globalisation and Its Discontents (Allen Lane, The Penguin Press, 304pp, £16.99), and George Soros in On Globalisation (PublicAffairs, 202pp, £12.99), are convinced that we are in the midst of a new, reformed global economy, but they are also realistic about the prospects for change. Both believe globalisation must, and can, be saved from its tendency to spread poverty, environmental damage and instability.
Soros's book makes tricky reading, as it is a series of loosely connected short, memo-like statements. Stiglitz's is impressive on virtually every front: sweeping analysis and practical proposals for reform are combined with passionate appeals to combat world poverty. Stiglitz is a Nobel prizewinning theoretical economist who dared to get his hands dirty with practical policies at the World Bank. He draws in stories from chicken farms in Morocco, schools in Uganda and banks in Botswana to make his humane and ethical case that globalisation must be a more open, democratic and fairer process.
This is not so much a book about globalisation as an attack on the world-view and practices of the IMF, which Stiglitz comes close to naming as the executive committee of global, financial capitalism, so in hock is it to the US Treasury and Wall Street. Stiglitz persuasively argues that economic development in the poorest parts of the world requires sustained aid, good governance, public infrastructure and social goods like education, as well as stock markets, privatisation and free trade. The IMF sees development as a purely market-driven economic process. On the contrary, Stiglitz argues, economic development is impossible without social transformation to promote education, attack poverty, improve the position of women and create open, reliable government.
Are we living in a distinctively new capitalism? Well, certainly, it is different from the more organised, industrial capitalism of the 1950s: our capitalism is global in culture, better connected by technology, and driven by disruptive innovation in technology as well as finance. But the continuities with the past and the tendencies to crisis are still strong, and the process of change will be more complex, messy and confused than either the super-optimists of the new economy or the super- pessimists on the Marxist left imagine.
Indeed, it is striking how many assumptions thinkers from the left such as Brenner and Meiksins Wood share with free- market economists of the right. Both, in different ways, seem to believe that the world should be ordered, stable and in some kind of equilibrium. They believe that any departure from this idealised state of balance is a step towards crisis.
Reading Brenner's account of how the world has stumbled from one crisis to another, what stands out is the resilience of the system. That is the nature of the new world economy: complex, occasionally well ordered, but often chaotic and difficult to influence, let alone control. But just as crisis is in its nature, so is adaptability. The globalised economy is not a big accident waiting to happen, but a series of mini-accidents always in progress, with bubbles, booms, busts and collapses following one another, along with innovation, growth, creativity and vitality.
Charles Leadbeater's new book, Up the Down Escalator: why the global pessimists are wrong, is published by Viking