The Five Forces That Broke Capitalism — and One Possible Fix

With the world in mortal crisis throughout the 1930s, the leading capitalist intellectuals of the day met in a series of fraught conferences. Horrified by the advances of totalitarianism, economists like John Maynard Keynes, Friedrich Hayek, Karl Polanyi and Ludwig von Mises clashed, tried to understand what had gone wrong and sought a version of capitalism that people would accept. Their efforts produced ideas that would guide the world for decades — from Keynes’ general theory to Hayek’s road to serfdom — and in 1938 birthed the concept of neoliberalism. But they failed to agree on much of anything.

A new capitalism would only arise, and the totalitarians would only be defeated, after the greatest war the world has seen. Today’s intellectual ferment among capitalists is uncomfortably similar. It’s no longer left to socialists or progressives to criticize free markets. Capitalists themselves are convinced they are facing the gravest crisis since the 1930s. The intellectual debate is almost as intense as in the days of Keynes and Hayek, even if — as in the 1930s — these discussions have minimal impact on politics.