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Is there life after capitalism?In 1995, I published a book called The World After Communism. Today, I wonder whether there will be a world after capitalism. That question is not prompted by the worst economic slump since the 1930s. Capitalism has always hadcrises, and will go on having them. Rather, it comes from the feeling that Western civilization is increasinglyunsatisfying, saddled with a system of incentives that are essential for accumulating wealth, but that undermine our capacity to enjoy it. Capitalism may be close to exhausting its potential to create a better life at least in the worldsrich countries.By better, I mean better ethically, not materially. Material gains may continue, though evidence shows that they nolonger make people happier. My discontent is with the quality of a civilization in which the production andconsumption of unnecessary goods has become most peoples main occupation.This is not to denigrate capitalism. It was, and is, a superb system for overcoming scarcity. By organising productionefficiently, and directing it to the pursuit of welfare rather than power, it has lifted a large part of the world out of poverty.Yet what happens to such a system when scarcity has been turned to plenty? Does it just go on producing more of the same, stimulating jaded appetites with new gadgets, thrills, and excitements? How much longer can thiscontinue? Do we spend the next century wallowing in triviality?For most of the last century, the alternative to capitalism was socialism. But socialism, in its classical form, failed as

it had to. Public production is inferior to private production for any number of reasons, not least because it destroyschoice and variety. And, since the collapse of communism, there has been no coherent alternative to capitalism.Beyond capitalism, it seems, stretches a vista ofcapitalism.There have always been huge moral questions about capitalism, which could be put to one side because capitalismwas so successful at generating wealth. Now, when we already have all the wealth we need, we are right to wonder whether the costs of capitalism are worth incurring.Adam Smith, for example, recognized that the division of labor would make people dumber by robbing them of non-specialized skills. Yet he thought that this was a price possibly compensated by education worth paying, since thewidening of the market increased the growth of wealth. This made him a fervent free trader.Todays apostles of free trade argue the case in much the same way as Adam Smith, ignoring the fact that wealthhas expanded enormously since Smiths day. They typically admit that free trade costs jobs, but claim that re-trainingprograms will fit workers into new, higher value jobs. This amounts to saying that even though rich countries (or regions) no longer need the benefits of free trade, they must continue to suffer its costs.

Defenders of the current system reply: we leave such choices to individuals to make for themselves. If people want tostep off the conveyor belt, they are free to do so. And increasing numbers do, in fact, drop out. Democracy, too,means the freedom to vote capitalism out of office.This answer is powerful but nave. People do not form their preferences in isolation. Their choices are framed by their societies dominant culture. Is it really supposed that constant pressure to consume has no effect on preferences?We ban pornography and restrict violence on TV, believing that they affect people negatively, yet we should believethat unrestricted advertising of consumer goods affects only the distribution of demand, but not the total?Capitalisms defenders sometimes argue that the spirit of acquisitiveness is so deeply ingrained in human nature thatnothing can dislodge it. But human nature is a bundle of conflicting passions and possibilities. It has always been thefunction of culture (including religion) to encourage some and limit the expression of others.Indeed, the spirit of capitalism entered human affairs rather late in history. Before then, markets for buying andselling were hedged with legal and moral restrictions. A person who devoted his life to making money was notregarded as a good role model. Greed, avarice, and envy were among the deadly sins. Usury (making money from

money) was an offense against God.It was only in the eighteenth century that greed became morally respectable. It was now considered healthilyPromethean to turn wealth into money and put it to work to make more money, because by doing this one wasbenefiting humanity.This inspired the American way of life, where money always talks. The end of capitalism means simply the end of theurge to listen to it. People would start to enjoy what they have, instead of always wanting more. One can imagine asociety of private wealth holders, whose main objective is to lead good lives, not to turn their wealth into capital.Financial services would shrink, because the rich would not always want to become richer. As more and more peoplefind themselves with enough, one might expect the spirit of gain to lose its social approbation. Capitalism would have

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done its work, and the profit motive would resume its place in the rogues gallery.The dishonoring of greed is likely only in those countries whose citizens already have more than they need. And eventhere, many people still have less than they need. The evidence suggests that economies would be more stable andcitizens happier if wealth and income were more evenly distributed. The economic justification for large incomeinequalities the need to stimulate people to be more productive collapseswhen growth ceases to be so important.

Perhaps socialism was not an alternative to capitalism, but its heir. It will inherit the earth not by dispossessing therich of their property, but by providing motives and incentives for behavior that are unconnected with the further accumulation of wealth. The writer, a member of the British House of Lords, is Professor Emeritus of Political Economy at Warwick University,author of a prize-winning biography of the economist John Maynard Keynes, and a board member of the MoscowSchool of Political Studies.