Introduction
This essay will argue that while Erik Olin Wright raises essential critiques of capitalism’s flaws and inequities, Deirdre McCloskey’s perspective on capitalism’s ability to generate widespread prosperity when coupled with robust governance and public interest, guardrails is ultimately more compelling. Wright goes too far in wholly rejecting the capitalist model, whereas McCloskey presents a more nuanced view harnessing capitalism’s productive dynamism through a regulated “civil society” framework.
First, the key ideas and contrasting viewpoints from Wright’s “How to be an Anticapitalist Today” and McCloskey’s “Why Liberalism Works” will be summarized. Then, a response will be provided that agrees more with McCloskey’s defense of capitalism’s benefits when accompanied by progressive reforms and government oversight to serve the public good. Wright’s criticisms will be engaged with, but an argument made that some form of regulated market capitalism seems vital for driving widespread economic development and poverty reduction globally. But all these will be put to test and complemented by added perspectives from other researchers to reach into the inner connection between the capitalist and social democratic approaches.
Overview of Wright and McCloskey
According to the article ‘How to be an Anticapitalist Today’ by Erik Olin Wright, an imaginary dismantling of capitalism is the most straightforward of all the criticisms of capitalism. In Wright’s opinion, capitalism is doomed to failure, since a stable situation becomes impossible with distribution of wealth unevenly, lack of joy in any activity and high irresponsible spending of productive resources, and of course, no real democracy to make everybody integrated into economic matters (Wright, np). As Wright bluntly states, “capitalism is, after all, a form of economic dictatorship of the bourgeoisie over the proletariat”.
Wright contends that the concentrated private ownership of capital and the means of production by a small economic elite inherently grants this capitalist class immense power over workers and society. This dynamic creates sharp class divides, exploitation of labor, and a disconnect between economic activity and societal needs (Wright, np). Wright advocates transcending capitalism by exploring alternative economic models based on social ownership and control, whether through evolutionary socialist paths or more revolutionary ruptures. He argues “the core idea of an emancipatory social transformation is subordinating the rational trumping of capital’s economic power over labor”.
On the other side, Deirdre McCloskey offers a strong defense of capitalism and economic liberalism in her book “Why Liberalism Works.” McCloskey highlights how capitalist market economics, respect for property rights, and relative economic freedom have been vital drivers propelling widespread rises in prosperity and living standards globally. She cites how “in a mere two centuries, real income per head has increased by a factor of thirty in the leading economies” enabled by capitalist development, innovation, investment, and global trade (McCloskey, np). Far from being a source of impoverishment, McCloskey argues capitalism’s dynamism has radically reduced poverty worldwide.
McCloskey counters that full-scale economic planning and state control tend to stifle incentives, efficiencies, and creative potential over time. She sees value in market competition as a productive force when constitutionally bound. However, McCloskey supports a robust “civil society” in which government, public policies, and social voices help shape market activity toward positive social ends. As she puts it, “it is not a matter of choosing between an unbounded market and unbounded state control, but of a socially regulated market economy” (McCloskey, np). While presenting starkly contrasting viewpoints, both authors grapple with the complex challenge of how to harness market forces and productive energies while channeling them through social norms and democratic decision-making to serve the broader public interest. Whether one favors capitalism or explores socialist alternatives, there must be careful consideration of how to fairly and effectively reconcile any disconnects between economic activity and societal needs.
Response
After carefully considering the perspectives of Wright and McCloskey, I find myself largely agreeing with McCloskey’s defense of capitalism’s ability to generate widespread prosperity when paired with robust governance and regulations to serve the public good. While Wright raises vital critiques about capitalism’s tendencies toward inequality, alienation, and resource inefficiencies, I believe his outright rejection of the capitalist model goes too far. Not only does McCloskey convincingly show with examples that capitalist economic growth based on respect for the right to owns property and the application of economic dynamics of market mechanism have now become the impetus of improvements in standards of living and poverty reduction in a great measure through these past centuries (McCloskey, np). For her, the fact that no other economic system has demonstrated a higher efficiency level when it comes to freeing people’s capacity to think freely, innovate and bring forth a change is hard to deny. Compared to the computerless operations of state capitalism, market motivation and the survival of pressure contest seem to shed new light on the economic dynamism.
Wright’s worries about the excesses of capitalism, however, cannot be disregarded. Unrestrained “free market” fundamentalism has, in fact, resulted in extreme inequality, labor abuses, devastation of the environment, and a lack of democratic responsibility for major economic decisions that affect society. This indicates that institutional restraints on the basic capitalism impulses and a robust regulatory framework are necessary (Wright, np). The views of economists such as Joseph Stiglitz, who advocates for a “mixed economy” that combines strong regulations and public policies with market incentives to ensure that capitalism’s productive forces serve society as a whole, offer a convincing third position. This might entail, as Stiglitz contends, measures like equitable taxation, stronger anti-trust enforcement, empowered stakeholder governance, stringent environmental restrictions, and increased democratic control over essential financial resources and public goods.
Such a nuanced approach appears to provide a workable solution. It would uphold the forces of capitalism—markets, property rights, and profit—as catalysts for innovation and economic growth. In addition, it would firmly control and alter those capitalist tendencies by implementing a number of public interest protections. This could make it possible to maximize capitalism’s potential for production while reducing its propensities for exploitation, inequality, and harm to the social and natural systems—tendencies that Wright sharply highlights. Drawing on McCloskey’s defense as well as Wright’s criticisms, we can forge a reimagined regulatory capitalist model that could be crucial to building a more sustainable and equitable economic system that is appropriate for the twenty-first century, especially in light of existential challenges like climate change and rising inequalities (McCloskey, np). Unrestrained capitalism and total market abandonment don’t sound like progressive answers. The most compelling course of action, instead, seems to be to imaginatively combine strong democratic government with economic dynamism.
Works Cited
McCloskey, Deirdre Nansen. “Why Liberalism Works: How True Liberal Values Produce a Freer, More Equal, Prosperous World for All.” Google Books, Yale University Press, 2019, books.google.co.ma/books?hl=en&lr=&id=jj6zDwAAQBAJ&oi=fnd&pg=PP1&dq=Dierdre+McCloskey. Accessed 16 Mar. 2024.
Wright, Erik Olin. “How to Be an Anticapitalist in the Twenty-First Century.” Google Books, Verso Books, 2021, www.google.co.ma/books/edition/How_to_Be_an_Anticapitalist_in_the_Twent/9MctEAAAQBAJ?hl=en&gbpv=1&dq=Erik+Olin+Wright. Accessed 16 Mar. 2024.
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