The downfall of capitalism will not be brought about by a superior system, but rather by the success of the capitalist system itself. The rapid increase in wealth allows for the formation of an intellectual class which primarily sees its task as criticising capitalism, thereby gradually undermining the very system that is responsible for its own existence. In other words, the threat is not from a superior alternative, but from cultural-economic suicidal tendencies within the capitalist system itself.
At least this is how the Austrian economist Joseph Schumpeter imagined the decline of the free market economy in his 1942 book Capitalism, Socialism and Democracy. Schumpeter, who managed the intellectual feat of being both a defender of capitalism and an admirer of Karl Marx, recognised sooner than others that economic success cannot replace spiritual fulfillment.
Like the German sociologist Max Weber, who detected the cultural roots of capitalism in Protestantism, he argues that the pressure of economic rationalisation inherent in capitalism will eventually turn against its spiritual origin.
The superiority of capitalism as an economic system is an objective fact and not a personal opinion. In his study on the economic development of the global South and the successor states of the Soviet Union, Steven Radelet shows that the number of developing countries with annual growth exceeding 2 per cent has risen in recent years from 21 to over 71 states.
Two per cent may not sound much, but it is the equivalent of doubling the income of millions of people allowing access to better education, health systems, and a longer life expectancy.
This success was made possible almost exclusively by the liberalisation of the economy, which unfortunately has not been equally successful everywhere.
The poverty in much of Africa can be linked to Marxist-influenced kleptocrats like Zimbabwe’s Robert Mugabe, who managed to bring the breadbasket of Africa to the brink of permanent famine.
In Latin America, it was less Western imperialism than a catastrophic economic policy that transformed Venezuela and Argentia from two of the richest countries on the continent into economic basket cases. And, in the case of Venezuela, creating as many refugees as the civil war in Syria.
If Western intellectuals would have replaced their infatuation with Che Guevara and Ho Chi Minh with admiration for Lee Kuan Yew (Singapore’s first Prime Minister) or Roh Tae-woo (South Korea’s first democratically elected President) the world might be a better place.
In 1965, Singapore was economically at the same level as Chile, Argentina, and Mexico, and South Korea was about as poor as Egypt. Today, the two Asian states are almost six times as wealthy as their former economic twins.
Indeed, postcolonial study groups and anti-capitalist columns are extremely reluctant to talk about Asia, since it would contradict their parochial view of the world.
Returning to Schumpeter, whose predictions have much more in common with reality than those of Marx, we can create a kind of ideological litmus test that allows us to understand many of the contemporary ideological currents much better.
For him, it was above all the cultural and spiritual homelessness as a result of the decline of traditional belief systems that would lead to new, capitalism-hostile ideologies that would ultimately take their place.
The modern climate movement, for example, is proving to be more of a religious than a scientific movement. This does not mean that climate change is not an important issue; on the contrary, but precisely because of its importance, perhaps the field should be left more to dry scientists like William Nordhaus and less to youthful activists like Greta Thunberg.
When Thunberg tweets about systemic change, Fridays for Future longs for the end of capitalism, and “Just Stop Oil” wants to end fossil fuels, they resemble supplicants at a religious service, not participants in a scientific debate.
When the former Archbishop of Canterbury, Sir Rowan Williams glorifies Greta Thunberg as a prophet sent by God, I recommend all clear-thinking people to turn to books like Michael Shellenberger’s Apocalypse Never: Why Environmental Alarmism Hurts Us All.
Individuals like Nordhaus and Shellenberger are interested in how the climate crisis can be realistically solved – through incentives, innovation, and above all economic growth which enables technologies that can mitigate negative effects of climate change.
The alarmist movement, on the other hand, represents a religious absolutism according to which only collective self-flagellation through renunciation of wealth can be the solution – a primarily technical problem is here reinterpreted into a moral-religious worldview in which there are saints and sinners who must be punished and rewarded accordingly.
The alarmists themselves, of course, are exempt from their own prescriptions: Which is why climate activists will continue to fly to luxury summits in Davos, while the VW worker in Wolfsburg is forbidden to vacation in Mallorca.