Anyone with a remote interest in business in the long term should watch David Harvey’s talk at the RSA on The Crises of Capitalism.
Harvey explains the sort of radical theory that most academics are unfamiliar with in a way that is wholly accessible (at least by the second viewing!) He sounds, in fact, like a combination of Eddie Izzard and Oliver Postage.
But the point he’s making is as sober as they come.
The capitalist system was born only a few generations ago and is shuddering under its own weight. We should not assume that it will keep on going. Every theory in the book has had to adapt to cope with the events of the last thirty years; but why adapt: there’s every possibility that the system we’ve all come to live with might actually give up and die.
And this is why business owners should take note. Harvey has a dig at his academic colleagues for not spending enough time actually doing something about the problem. Today, they can neither predict what’s going to happen, nor enjoy saying “I told you so” afterwards. He’s right to say that it’s their duty to change their mode of thinking. I meanwhile will take this opportunity to have a dig at the anti-capitalists, many of whom just don’t like the capitalist system because of what they see as its institutionalisation of greed and ‘selfish’ human nature. But with these opinions they too are stuck with the old text book that can no longer account for what’s happening.
Capitalism will fall because it will eat itself, not because a bunch of cardigan-wearing hippies (myself included) hold a protest and overthrow it. When this happens, what are you entrepreneurs going to do? You people with imagination and drive… with families to feed, aspirations to live up to, and immense intelligence, education and talent. In Britain you have already seen your government side with the City for a century and watched them, as Harvey says, “screw industry to keep the financiers happy”. But what happens when the system collapses, and the financiers go out of business?
Growth forever is not possible. When the rules of business change so much that the way you work today – getting hold of finance, purchasing labour, resources, technology, producing and selling a commodity, re-investing some of the profit – is totally unrecognisable, what are you going to do?
Harvey says “the legitimacy of neoliberal ideology is in question and nobody knows what to put in its place.” For any academic this is a rallying call. But for entrepreneurs with the skills to make things happen: now is the time to adapt your long-term strategy to increase “social control over the production and utilization of the surplus” i.e. protect and isolate yourselves from the power of the financial markets to govern what you do, take the lion’s share of your profits before you do, and dictate whether or not your customers can afford to buy your products. Why not start by trying to produce something of genuine value. Now that’s a toughie.