The market economy remains a hard sell and recent events have brought out the Jeremiahs to proclaim the death of capitalism. But the modern critique of capitalism is incoherent, summed up by the May day protesters whose banner read: “Capitalism should be replaced by something nicer”. It is much clearer what anti-globalisation protesters are against than what they are for. For many people, environmentalism has taken the place of socialism as a focus of anti-market sentiment. But environmentalism offers no economic theory, only a visceral dislike of any economic calculus. The two principal strands of modern leftist economic thought are social democracy and redistributive market liberalism. Robert Reich, President Clinton's labour secretary, expounded the social democratic philosophy in office and in his recent book Supercapitalism.
Modern social democrats insist that the activities of private businesses should be subject to democratic political control, although they dilute that control to near homeopathic proportions. They continue to believe that wise and public-spirited bureaucrats can see further than myopic and selfish business people and usefully co-ordinate their activities. This social democratic solution to the travails of the financial sector is widely advocated right across the political spectrum.
The alternative philosophy of redistributive market liberalism was espoused by Mr Clinton's longest serving Treasury secretary, Robert Rubin. Mr Rubin (a Goldman Sachs alumnus, of course) believed “that the concept of state direction of economic activity and the state ownership of economic resources was likely to be highly inefficient” but yet “another focus of mine, unusually for a Treasury secretary . . . was poverty and the distress of inner cities”.