Folk memories of ancient battles are still a crucial element of Serbian national identity. Photograph: Paolo Pellegrin/Magnum
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The Belgrade train

A journey to the troubled heart of the Balkans.

At Cortanovci in November, the Belgrade train enters the wet woodland of the Danube shore. Egrets stand at ease by poplars. Warblers scatter as the train passes. This Serbian district of hills and orchards is known as the Fruška Gora, or “fruitful hills”. It is also a national park, though there’s nothing at Cortanovci to announce the fact. I’ve glimpsed the crossing-keeper only once in all the years I’ve taken the train: a woman in a stripy headscarf, she sat on a plastic chair in the sunlight among chickens and buckets, knitting.

The express trains no longer stop here, but if you follow the woodland track downhill from the platform you come across traces of an old beauty spot. A stream flows over stones that have been patched together like home-made cobbles. Old man’s beard loops between the trees. Near the water, signs of human activity appear: here a pile of firewood, there a hut made from branches and parts of an old car. Moss has climbed the car-door windows like a stain. On the bank, overgrown concrete plinths suggest the cafés that used to line the shore. Only one remains. Inside its cabin, a portable TV blinks from a high bracket. You can sit on the remains of a terrace and drink a brown sludge of coffee, probably made with river water.

The proprietor smokes at a polite distance. For once, in this talkative country, there’s nothing to say. The river holds his attention and yours. Sleek tenant of some of the most contested land in Europe, the Danube is not Serbian, any more than it is Austrian or Slovak or Romanian. Here it is a working waterway, navigable by immense barges loaded with shipping containers. They glide past, engines chuntering. Deliveries from downriver and even the Black Sea head for the industrial quarter of Novi Sad, inconceivable among the trees of this riverbank but no more than 20 kilometres upstream.

The Macedonian novelist and essayist Aleksandar – Sasha – Prokopiev and I found ourselves drinking coffee in the quiet of Cortanovacka Obala one evening in September 2001. We had escaped from a conference being held by the new, post-nationalist new Serbian Writers’ Association in a former local government holiday villa on the scarp above us. Elsewhere the western world convulsed and panicked. Here the late air was muggy under the trees, bright over the water. Clouds of midges caught the light. After a while, two young guys appeared, carrying an assortment of rods and tools. They had a couple of big fish each: carp, probably, or the bottom-feeding fleshy fish the people in these parts call cpaπ. Before we saw them we heard them, calling their dogs: Ide Goran, ide Zoran. The moment they noticed us they started hustling: beautiful fish, you can eat them here. They were dressed in the odds and ends the poor wear everywhere. One had an old shirt and trousers coloured with oil, the other was in a T-shirt and Chelsea strip tracksuit bottoms. They stared at us cheerfully, even as we declined in a fluster of excuses. Finally, Zivot, good health, they shouted like a kind of shrug, parting, and Zivoti, Sasha answered, bouncing a little in his seat and raising his cup.

I found myself wondering what they had done in the Yugoslav wars of the 1990s: they must have been in their twenties already by the time the conflict ended, and it’s the poor and uneducated everywhere who are first recruited to fight. Often, here, I’m grateful for the way people keep what they’ve seen unspoken; yet those secrets are frightening just because they exist. This is true even of the people I’m closest to. I couldn’t, for instance, mention my unease to Sasha. That evening his country (its official name, at Greek insistence, is now the Former Yugoslav Republic of Macedonia, or “Fyrom”) was still at war. It was something he couldn’t bear to speak about. As in its north-westerly neighbour Kosovo, a fault line had been reopened between the mainly Orthodox Christian, ethnic Slav population and the indigenous Muslim communities, known as Albanians, largely concentrated then, as today, in the region close to Kosovo and Albania. Even as I thought about this, the evening news on the café TV switched to pictures of his home town: the capital, Skopje, in its river basin ringed by mountains, among them the highlands around Tetovo, scene of one of the last offensives of the war. Sasha smiled and shook his head and looked away.

The fishermen were archetypes, doing what countrymen have done everywhere through the centuries. They could have been taken from the foreground of some 18th-century engraving. The Fruška Gora is a habitable idyll, the kind of landscape that humans have imagined in their search for paradise since before the Torah became the Bible. Eden, after all, was an orchard. But this evening its beauty was a kind of con. The overgrown waterfront made it clear that no one was holidaying in paradise. The tapping and knocking sounds of building in the orchards behind us was a sign not of prosperity, but unemployment. Local people were out of work not only due to the loss of tourist income, but because of Nato’s bombing of local industrial plants and the disappearance of a pan-Yugoslav market for Novi Sad’s manufactured goods. Men were fixing up their houses because there was nothing else to do – and because there were refugees to be accommodated.

For Serbs, the war had ended only two years earlier; their dictator Slobodan Milosevic had been gone for less than a year. The beautiful river we sat by, the water table that feeds the Fruška Gora’s orchards, had been polluted by the depleted uranium Nato used in its bombs. The fishermen’s catch, the fruit, even the water in our coffee could have been conta minated. Who knows? Perhaps it was here and now, on this peaceful evening by the Danube, that Sasha ingested, and I did not, the trace of contamination that would lodge in his thyroid and flower as tumours around his face and neck in the decade to come.

“It has been estimated that one-millionth of a gram accumulation in a person’s body would be fatal. There are no known methods of treatment for such a casualty” – this according to a memo written on 30 October 1943 by physicists working on the US nuclear project. Since Nato’s bombing campaign, leukaemia rates among newborn babies in the former Yugoslavia are said to have risen from one per 1,000 to between ten and 15 per 1,000. Recently Sasha told me, once again evading my eyes, about an epidemic of men with prostate and thyroid cancers in Skopje. Even his friend Mickey the mafioso, with whom we danced and drank at Sveti Naum one August Sunday, has gone into the clinic Sasha knows too well, and never come out.

Now the railway line breaks out of the woods and on to the rolling plain of the Banat, the breadbasket of the Balkans. The last of the Fruška Gora is a bald arable ridge sinking into the great level that most characterises Vojvodina, this ethnically mixed northern region of Serbia. It makes a fine contour, subtle and sensuous like the landscapes painted between the world wars by Sava Šumanovic, a Serb artist from nearby Šid, murdered in 1942. I keep a postcard of Šumanovic’s Autumn Viewon my desk, and its cream and gold remind me of the time we visited the little Austro-Hungarian border town, really more of a village. It was in Šid’s Art Klub, over another coffee, that Nenad Velickovic – novelist, youth worker and an ethnic Serb who remained to endure the siege of Sarajevo from 1992 to 1996 – lectured me on the presumption of the foreign NGOs that had flooded into his home town: the outsider never truly understands.

The first time I travelled across the Banat, just after the fall of Milosevic in October 2000, the whiteness stretching on all sides dazzled me. This was my first encounter with the openness of the south-east European plain. It’s Pannonia, the site of a huge lost inland sea, Raša, a translator for the UN peacekeeping forces, told me, lifting a hand from the steering wheel to gesture. Pannonia, he explained, stretches from Vienna to Belgrade and from Zagreb to the north-western corner of Romania, and though centred on the Hungarian steppes it encompasses Vojvodina, central Croatia, western Transylvania and corners of several other countries where they fall between the mountain ranges of the Alps, the Carpathians, the Adriatic Dinarides and the Balkan Mountains in the east.

Raša’s wool collar was stylishly turned up; an expensive scarf covered his chin. Yet despite his smart white four-wheel drive with its UNHCR number plates he was a typical Yugoslav mixture, with a Serb surname, a Muslim first name and, as I was discovering, a very Balkan fatalism. We were speeding north from Skopje to Novi Sad along the most inappropriate motorway I have ever travelled. Single-track in each direction, it had a single, shared central overtaking lane: the worst kind of temptation for drivers of a nation renowned for machismo, and which had recently lost a war. Everyone played chicken. Cars raced towards us, and we towards them, until disaster seemed inevitable – averted only by some sudden swerve.

Apparently unconcerned, Raša continued to explain the identity of this central Balkan region. If Vojvodina is a breadbasket, its handles are gripped by Hungary in the north, Romania in the east, the Serbian capital to the south – and Croatia to the west. That northwestern border between Serbia and Croatia around Vukovar suffered the worst of the conflict between those countries in 1991; yet Vojvodina, and the fertile plain of the Banat in particular, is historically anti-nationalist, a region proud of its ethnic diversity.

In 2002, there were still a quarter of a million Hungarians here and at least three million people from other minority groups: Slovaks, Croats, Montenegrins, Romanians and Roma, but also Bunjevci, Germans, Slovenes and Muslims. The regional capital, the liberal university town of Novi Sad, was known for its desire to distance itself from Milosevic; but later in the war the bombing of its bridges and factories hardened local anti-western feeling.

At the southern tip of the Banat, beyond Nova Pazova, the proximity of the capital announces itself with a strip development of new villas, built in red clay breeze blocks. But who would settle here, in one of these tall new houses, their small grassed yards unfit for the village fruit, flowers and chickens? Without shops, without the comfort of longterm neighbours, this is no village, but an echo of city life in the middle of nowhere.

In its own way it represents a more radical social reconfiguration than the tower blocks of the communist era; and it has become home to those who live nowhere. The builders and owners of these houses are the uprooted, the transplanted: the diasporans who come back each summer and dream of returning for good. A man leans his belly on a balcony rail to watch us pass. Between him and the railway line is dusty common land, full of weeds and criss-crossed with tracks. A goat pulls on a long tether. A ditch is clogged with rusting cars, fridges and bin bags of detritus.

The every-man-for-himself straggle of Nova Pazova is nothing like the planned, communist-era new town of Novi Beograd, where the train soon pulls up at a concrete platform of unmistakably 1970s design. New Belgrade’s bug-eyed concrete tower blocks are the symbols of this dormitory district, built across the river from the old capital. It’s densely populated, and a stop here takes time and is full of noise and emotion. The dreamlike sensation of a long journey is over. Families are reunited. The unfeasible baggage of returnees – huge suitcases, crates and sacks – is unloaded, a cue for shouts and laughter. Meanwhile a couple of youths with gelled hair and sharp jackets, up for a night in town, slip into the seats behind you. No one’s going to check their tickets now.

Finally the train begins to move. The platform slides away. You look down on to the Roma settlement that occupies the wasteland beneath the viaduct. This isn’t a couple of caravans and a van parked up in the English style. Instead, streets of shacks have been put together from the materials that shackbuilders everywhere have to hand: plywood, corrugated iron, cardboard, branches, tarpaulin and rags. To the western eye it looks like apartheid. Shouldn’t Roma people live clean, comfortable lives as they keep their culture and freedom of movement? But no state is going to look after them as well as it does its taxpaying voters. The shanty town signals impasse: the failure of utilitarian solutions to address minority needs.

There have been Roma in Serbia since at least the 14th century. They were here before the Turks, who named and rebuilt the great fortress that dominates the Belgrade city scarp. Kalemegdan stands above the confluence of the Danube and the Sava, the river the train must cross to arrive in the capital. Wide brick walls, fortified with turrets, loop around the edge of a rock and face most impressively east and north, towards us. Like the fortress at Petrovaradin, upstream in Novi Sad, Kalemegdan secured the river routes that helped the administration and prosperity of the Habsburg empire. Now its castle walls enclose lawns, trees and kiosks where you can buy cola and pumpkin seeds and sometimes, for your girl or a child, a keyring with a fluffy toy attached. Old men play chess on park benches, ringed by bystanders. And lovers, of whom Belgrade always has plenty, occupy the seats in the shadiest corners, or sit together on the broken walls. When the wind carries, you can hear the zoo animals yowling at the eastern end of the park.

At Belgrade, the Danube is enormous, easily incorporating the thickly wooded Great War Island that floats just below the citadel. But it is chiefly the Sava that Belgraders proper live on and with. Wider here at its final point than the Thames is at Westminster Bridge, or the Danube under the Chain Bridge in Budapest, the Sava is a Yugoslav river. Named for Saint Sava, the princely archbishop who founded the Serbian Orthodox Church and drafted the first Serbian constitution in 1219, it starts as a racing, turquoise stream in the Julian Alps of Slovenia. After passing through Ljubljana and then Zagreb, it serves as the border between Croatia and Bosnia for 200 kilometres until it reaches Sremska Mitrovica, the town whose prison was appropriated by the Serbian army during the wars of the 1990s.

In her third-floor apartment on a corner block near the Belgrade mouth of the Sava, Marianne, a literary translator who had married into the life of the city, once gave me a glimpse of the kind of bourgeois good life envisioned by the 1930s architect of her block. Her flat was all oak and glass, a circlet of rooms that opened into each other and, repeatedly, on to views of the street and river. Although the original fittings and the bigblocked parquet floors were looking a little tired, the flat continued to model the good life, its interlocking rooms suggesting the interlocking dialogue of family life.

Further west, though, the riverbank ceases to be residential and becomes utilitarian. Here, a train arriving from the south must shunt through a series of sidings below the city rock. Warehouses turn anonymous gable-ends to the tracks where workers amble. Sleepingcars are parked up seemingly at random; curtains flap at their open windows. Beyond lie the trade fair grounds, then suburbs that quickly turn away from the river, leaving its banks to birds and fishermen.

The Sava is also where the pleasure-barges anchor. Nightclubs, restaurants, brothels – in the years after communism they were powered by mafia money and turbo-folk. The aesthetic is bling and glitz; girls with straining corsets, huge eyelashes, fake tans, and enormous voices. Turbo-folk has great tunes (it is derived from folk material, after all), great emotion and a limited palette of topics: lament, passion, nationalist longing. It makes the folk-rock giants of the British 1970s look like mincing antiquarians. Turbofolk isn’t exactly dumbed down – the emotion it works up can be almost complex, at times genuinely sweet-and-sour – but it is amped up. It’s music for drunken parties, music to make the room sway and young women pump their right arm in the air, first finger extended, as they mark the sweet spots where, deliberately breaking her voice, the singer maxes out the emotion.

Turbo-folk is playing at every wedding party you stumble upon. It’s what binds the room together when everyone is already sodden with sentiment and slivovitz. It is grandiose and unsubtle, and a quarter-century ago you could have enjoyed or ironised the vulgar sentiment and thought no more about it. But in the wars of the 1990s the music became nationalist ammunition. The new aristocracy of the time were the mafia warlords and their turbo-folk molls.

Early 1995 brought the marriage of the most famous couple from that world, the mafia warlord Arkan (real name: Željko Ražnatovic) and the turbo-folk star Ceca. Arkan, who had graduated from organised crime and football hooliganism – he was the leader of Red Star Belgrade’s notorious followers, the Delije – wore a faux-military costume. Five years later he was dead, murdered in the lobby of Belgrade’s InterContinental Hotel. Two years after that, when I stayed in the less glittering Hotel Taš, there was still a “No Firearms” sign over the door of the breakfast room, which served nightly as a casino; but the morning eggs were irreproachable. The wars, and their turbo-folk soundtrack, had a tremendous kitsch momentum, although it’s disgusting to use this term in relation to the horrors inflicted on the civilian populations of former Yugoslavia. Still, both violence and music showed detached, postmodern Europe the potency of the lowest common denominator: what happens when thousands surrender their individual judgement to vulgarised emotion.

Balkan folk songs have form as a repository of warlike memory. Perhaps the bestknown of all is “The Field of Blackbirds”, which turns a story of defeat by the Ottoman imperial forces at Kosovo Polje in 1389 into a call to arms for Serbian nationalism. An oral peasant culture, such as still survives in the Balkan countryside, is a fertile context for the transmission of history and ideas through ballad and song. This is not so different from “When Adam Delved and Eve Span”, which we’ve inherited from our 14th-century Peasants’ Revolt, or the protest ballads sung by the wives of striking miners in the 1980s.

The difference, however, lies in the degree of surrender of better judgement, of individual responsibility, that turbo-folk evokes. “History is now and England,” T S Eliot wrote, though we don’t believe him. Turbofolk singers urge us to believe that history is now and Serbia, Bosnia, Kosovo. They position the listener inside the song, telling him that he is part of the story it narrates. They do this through both the words and the music, which doesn’t settle for being tuneful, or even good to dance to. Perhaps it’s easiest to think of it as something akin to soul music: a mix of the evocative national pull of folk music, the “belonging” repertory of regimental or Northern Irish marching bands and the meaningful tug of gospel. It’s music to make a lump rise in your throat against your better judgement.

Yet Belgrade also has a vibrant countertradition. Radio B92, still broadcasting today, confirmed its anti-nationalist stance during the war years not only through its news and commentary but by broadcasting western pop and rock music. In a way that got lost in the west in the 1970s, such music remains politicised here as the sound of idealism and rebellion. There is also a history of indigenous rock as critique. In the 1980s, Idoli, a Belgrade new-wave band with members from across Yugoslavia, issued songs of sardonic social commentary. In 1980 their “Retko te viðam sa devojkama” (“I rarely see you with girls”) was a pioneering gay statement in mainstream culture.

During the war years, B92 playlists moved from Prince and REM to Tricky and Super Furry Animals. Later, the radio station felt a responsibility to sanitise folk music because of the role turbo-folk had played in the war. It did so in part by issuing Srbija: Sounds Global compilations, featuring indisputably ethnographic artists.

The Belgrade train grinds across the steel railway bridge above pleasureboats still moored on either side of the Sava. Squint to the right along the northern bank and you can see a bare patch of ground, something like a building site, where the headquarters of Mirjana Markovic’s JUL party, the old communist left, was destroyed by a Nato bomb in 1999. At the time Markovic, who is still involved in Serbian politics today, was married to Slobodan Milosevic. Nato also bombed RTS, the city’s equivalent of Broadcasting House, as well as a large, army-run building out on the Pancevo road, which turned out to be not a military headquarters, but a hospital. For more than a dozen years, the ruins have been left exposed to the weather as a huge, open-air protest.

As the train arrives on the east bank of the Sava, the White City is grey with dust and petrol fumes, and dusk is settling over the scarp. Soon, it will be too dark to see the remarkable Jugendstil buildings downtown, the Austro-Hungarian villas of the embassy district, or of Knez Mihailova. On that wide pedestrian boulevard the Roma kids will be packing away their fiddles and money caps; suited men will be filling the tables of Snežana: Srpski restoran; and where the American Cultural Centre used to be before it was torched, girls in skintight jeans with tousled hair will scream with laughter down the cement arcade.

At the southern end of Knez Mihailova, where it meets the roaring traffic of the arterial Terazije, stands Hotel Moskva, the best in the city, its newly renovated green tiled roof and gilded art nouveau wall panels gleaming. The Moscow’s marble tearoom becomes a piano bar in the evenings, but the menu never changes. If you don’t want to drink you can still have a thimbleful of thick coffee and a not-quite-fully-thawed cream cake.

Below the hotel the city tips downwards, back to the Sava. Facing it is the Hotel Balkan, where in 1996 the Hungarian writer Péter Zilahy, then a young rebel taking part in the failed anti-Milosevic uprising, photographed government troops waiting under the hotel sign, symbol of the collapse of regional hospitality. Below the Balkan and the Moskva, Balkanska – Balkan Street – winds down to the railway station. You can probably see me there, toiling uphill.

Here’s the stop for the night bus to Skopje. Here’s the small leather-goods shop where I bought a most useful belt. The baklava shop. “Zlater” on the jewellers’ fascia board. The internet café. And ahead of me, huddled on its eccentric corner site, is the Hotel Prag, our usual place.  

Fiona Sampson is a poet. Her latest collection is “Coleshill” (Chatto & Windus, £10)

This article first appeared in the 27 May 2013 issue of the New Statesman, You were the future once

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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