Capitalism in Evolution

Capitalism in Evolution

Global Contentions – East and West

Edited by Geoffrey M. Hodgson, Makoto Itoh and Nobuharu Yokokawa

Contributors to this volume argue that to understand capitalism in evolution, this diversity of systems and approaches must be taken into account and their individual evolutions analysed. This book represents a major understanding of the evolution of capitalism in the twenty first century and brings together a distinguished group of experts with perspectives from America, Europe and Japan.

Chapter 11: The evolutionary spiral of capitalism: globalization and neo-liberalism

Makoto Itoh

Subjects: economics and finance, institutional economics


Makoto Itoh INTRODUCTION The globalization of the modern capitalist economy is widely acknowledged. More and more firms, products, financial assets and workers are being drawn into the global whirlpool of competitive markets. Capitalism has become increasingly competitive on a global scale. Repeated economic crises since 1973 have prompted the restructuring of capitalist economies. As a result, capitalist firms have extended and strengthened their global competitive activities. These achievements have been facilitated by new, microelectronic-based information technologies. At the same time, neo-liberal policy beliefs in the harmonious efficiency of freely competitive market have prevailed. The collapse of Soviet-type central planning reinforced the faith of the neo-liberals, and seemed to mark the final victory over socialism (Fukuyama, 1992). It is widely believed that the globalization of capitalism involves the extension of a self-regulating and efficient economic order. Yet we have a world with economic instability and polarized wealth and income. Especially when looked at over the broad span of history, neo-liberal triumphalism is somewhat tempered by a sense of disillusionment and confusion. Ironically, several neo-liberals have acknowledged that Marx was the prophet of capitalist globalization. The year 1998 was the 150th anniversary of the publication of the Communist Manifesto. The authors of the Manifesto had pointed out that the growth of bourgeois society had ‘given a cosmopolitan character to production and consumption in every country’ (Marx and Engels, 1998, p. 39). They also emphasized that the strong growth of the capitalist economy itself created the potential for self-destructive commercial crises....

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