"A World with Healthy Middle-Class Societies"

Justin Fox:

Is the Next Karl Marx a Management Consultant?, by Justin Fox: Wouldn't it be nice, Francis Fukuyama writes in an article called "The Future of History" in the current issue of Foreign Affairs, if some "obscure scribbler ... in a garret somewhere" would "outline an ideology of the future that could provide a realistic path toward a world with healthy middle-class societies and robust democracies."

This ideology, Fukuyama goes on:

could not begin with a denunciation of capitalism as such, as if old-fashioned socialism were still a viable alternative. It is more the variety of capitalism that is at stake and the degree to which governments should help societies adjust to change. Globalization need be seen not as an inexorable fact of life but rather as a challenge and an opportunity that must be carefully controlled politically. The new ideology would not see markets as an end in themselves; instead, it would value global trade and investment to the extent that they contributed to a flourishing middle class, not just to greater aggregate national wealth.

It is not possible to get to that point, however, without providing a serious and sustained critique of much of the edifice of modern neoclassical economics, beginning with fundamental assumptions such as the sovereignty of individual preferences and that aggregate income is an accurate measure of national well-being.

There are other, more political, aspects of this ideology that Fukuyama goes into (and for those who have already clicked through to the article and found most of it to be behind a foreignaffairs.com wall, you can get through the wall just by registering; you don't have to pay). But reading his description of the economic side of it, I couldn't help but think to myself: This ideology already exists. Its scribblers aren't in "a garret somewhere." They're in well-appointed offices at business schools and management consulting firms.

I know this because these people are constantly submitting articles to HBR. A brief sampling: Michael Porter and Mark Kramer's "Creating Shared Value;" Christoper Meyer and Julia Kirby's "Runaway Capitalism;" Dominic Barton's "Capitalism for the Long Term;" the collected works of Umair Haque. And it's not just us: I got a press release last night from the World Economic Forum (presumably written in a Davos garret) headlined, "To Serve Society Better, Capitalism Needs a Redesign."

You could say this is just rhetoric and PR meant to stave off those truly radical scribblers in garrets — and that may be partly right. But something more fundamental is going on. ...

I hate to be Mr. Negative today, but I'm less than fully convinced that we are anywhere near embarking on a path that places the welfare of the middle class at the forefront of economic decisions.