The Future of Capitalism

The New Economic Game

With the advent of the industrial revolution, success came to be defined as an increase in a society’s material standard of living. Given that definition, capitalism is, in fact, the only successful economic system in the world. Its competitors lie strewn upon the boneyard of defunct notions such as fascism, socialism and communism.

Despite its success, something is clanking inside the thrumming engine of capitalism and it doesn’t sound good. That grinding noise is the sound of the world economy decelerating from an inflation-adjusted annual growth rate of 5% in the 1960s, to 3.6% growth per year in the 1970s, to 2.8% in the 1980s, to just 2% in the first half of the 1990s.

Another interesting note: while the U.S. economy generated 38 million net new jobs from 1973 to 1994, western Europe failed to create a single net new job during the same time period. Yet even in the U.S., something is awry. In the 1980s, 64% of all earnings gains went to the top 1% of the workforce, raising serious questions about the long-term stability of the social and economic structure.

Historically, dominant social systems without competitors - ancient Egypt...