I his latest book Alan Greenspan, ex-Chairman of the Fed, writes: “[Although we are driven by many emotional propensities, our intuitions about investments are rational.] That reason persuades me and most economists to conclude that modern industrial capitalism, despite earlier excess enthusiasm of what it could accomplish, has been the most effective form of economic organisation ever devised . . .”
Repeatedly in his book, The Map and the Territory 2.0, Greenspan writes that the industrial revolution was a unique event in the history of man’s civilisation. I would agree. It’s for this reason that I suggest that the industrial revolution was the first instance of capitalism — an oubreak of reason that pooled savings (in bank accounts) — could be used to build new developments (cotton-spinning factories).
If, for any reason, the industrial revolution were to decline, then capitalism would decline also. If this is what is starting to happen now among the advanced countries, then future investment for innovation development would not be coming from capital-from-savings but from capital-from-taxation — as suggested in my penultimate posting. Although strictly speaking this is still capitalism — in the sense that surplus money is required — it would be better to call the new post-industrial era by another term.