Frankly, I think the debate is very confused and misses important points. Also, Mason’s book appears to base its analysis on the idea of the Kondratieff wave and Marxism (Chapter 3 of the book is even called “Was Marx Right?”). Unfortunately, I think these theories are nonsense.
In my opinion, the whole debate cannot proceed until one has defined “capitalism” carefully. What is the essence of capitalism?
I think these are the core and essential attributes of capitalism:
(1) where there are strong (if often limited or circumscribed) private property rights;Defined in this sense, it is obvious that capitalism can come in many forms.
(2) where most capital goods are privately owned and where most investment decisions are made privately.
Here is just a small set of possible capitalist systems:
(1) a Rothbardian capitalist system where no government exists and where everything is privatised including justice;I do not see any substantive problem with capitalism when it comes in form (4) or (5). (4) and (5) are what we would call the social democratic mixed economies of the post-WWII era.
(2) a Misesian or Hayekian Classical liberal capitalist system, where there is a minimal night-watchman state with basic public infrastructure (under Hayek’s system it might have some minimal social and economic interventions);
(3) a neoliberal capitalist system where governments attempt to control macroeconomics by monetary policy and varying degrees of government intervention (such as public infrastructure spending, regulation, social security, basic social services, and welfare), but where labour markets are deregulated, governments try to balance budgets, and involuntary unemployment is often a serious problem;
(4) a capitalist system where a Keynesian state maintains full employment by fiscal policy, strongly regulates businesses, and provides extensive social services (such as health care, education, and unemployment benefits) and welfare, strong public infrastructure spending, but where nationalisation of certain industries/services is minimal or non-existent;
(5) a capitalist system where a Keynesian state maintains full employment by fiscal policy, strongly regulates businesses, has strong public infrastructure, provides generous social services (such as health care, education, and unemployment benefits) and generous welfare, and where some industries are nationalised (e.g., the commanding heights of the economy).
The problem with capitalism is when it comes in forms (1), (2), or (3) (or anything in between).
Just because neoliberalism is badly flawed, it does not follow that the left should totally reject capitalism in the sense I have defined it above. We can still have a social democratic mixed capitalist economy, and all the evidence suggests that this is the best and most successful economic system modern industrialised economies can have.