15 October 2019

Free Exchange: The future of capitalism

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What is the future of capitalism? This week’s Free Exchange exchange, recorded live at the Conservative Party Conference in Manchester, debates just that.

Our Editor John Ashmore chaired an expert panel including the RSA’s Alan Lockey, digital policy expert Casey Calista and fellow of the Adam Smith Institute and self-declared inventor of neoliberalism, Sam Bowman, as they discussed  the rise of platform capitalism, solving Britain’s productivity crisis and whether we should be scared of big tech.

Alan Lockey 

I think there are perhaps two big trends in the future of capitalism, one of which is the rise of intangible investment, and the other is the future of work

Platform models, like Uber and Deliveroo, will grow and continue to grow from this point onwards. And that raises some very interesting questions about politics and policy.

Firms will be able to manage the supply of labour and the supply of production for their consumers with a degree of precision that we’ve not seen so far in capitalism. As a result, we could see a world where a lot of us are working for six or seven platforms at one time.

Adam Smith saw self employment as a kind of delivery of people from survival dependency. Now, I think that’s interesting, because that is something that is really, really positive about firms like Uber.

If the right leans into platform capitalism, there is a way to think about giving radical flexibility and control over individual production in a way that hasn’t really been possible since the 18th century. This could be a further fulfilment of Adam Smith’s vision.

Casey Calista

We’re not talking about tinkering around the edges, helping a couple people out who are out of work. We really need to be talking about huge transformative change to our society and our entire economy.

We need to invest more in Research&Development. And we need to make sure that we’re really fast adopters of new technology that will help us out.

We need to re-think how we attract and develop talent. Everything from the immigration system, to work training the education system could be overhauled.

Sam Bowman

What we’ve witnessed in the last decade is intangible investment overtaking in the developed world tangible investment. So intangible investment is now a bigger part of the story for the English speaking world in particular, than physical investment. That has some very interesting consequences.

The things that stop a successful tangible business from becoming the most successful business and destroying all of its rivals don’t usually apply to software, because serving one extra customer really makes no difference to them. And what that means is that we should expect to see more superstar firms.

It’s more valuable to be near each other than it ever has been before. From a policy point of view, what should we do about that? Well, one thing to do is to make it easier for people to move, and that means sorting out the housing market.

If we want to help left behind towns, and if we want to take advantage of the intangible economy, we have to let those towns plug in to the places that are growing, and we have to make a much more serious focus on things like bus routes and bus lanes.

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John Ashmore is the Acting Editor of CapX