These changes and the end of the Cold War in 1989-91 have ushered in the era of the New Capitalism: more global, more efficient and more dynamic. The Old Capitalism of the post-war industrial world operated in a regulated economy relying for its profitability on industries based on food processing, white goods, cars and steel making. The New Capitalism is a deregulated economy increasingly relying on services and knowledge. It commercializes all aspects of culture and leisure. The New Capitalism deepens the commodification of things once done within the family economy: preparing meals, caring for children and caring for the elderly. Activities, once performed by government, have been commercialized or privatised in recent years: education, electricity generation, telecommunications, water and health. All of this economic activity is backed by sophisticated industries of marketing and advertising. Everything is a product and everyone is a customer.

New Capitalism is a libertarian capitalism and libertarianism has attractive elements. It is more open and flexible . Workers are more mobile and skilled workers, especially those with skills in demand have more autonomy in their working life and good material rewards. For most people daily life is less constrained by social conformism. Enjoyment is not constantly shadowed by moralistic guilt. Sexuality and sexual preference are hidden in the shadows and the expectations of women (and men) are less rigid.

Indeed the libertarian new capitalism has embraced the libertarian cultural revolution of the 1970s. Diverse lifestyles have been converted into market niches for an endless array of new consumer products. Above all, for many, material living standards are higher than at an time in history.

Under this dispensation a curious paradox has emerged. The threat of communism has collapsed and Western economies pour out a cornucopia of material goods, yet there is an uneasiness about all of this. There has been a popular revival of critiques of hyper consumption and hyper individualism. There is a yearning for ‘moral values’. A move back to religious belief – often fundamentalist -- has been observed, both in the wealthy West and in the less developed world.

The gap between the super rich and the poorest is growing. A larger middle class is growing. In a previous era the struggle over this unequal distribution of wealth was the underlying dynamic of politics in countries like Australia. Today resentment over the unequal distribution of wealth has lost its bite. But unease and resentment about something else is growing. It’s hard to put your finger on but it is about the way we live, the quality of our lives. It has something to do with that overused and slippery term, ‘stress’. It is about being unable to spend as much time with your children as you’d like. It’s insecurity about your job. It’s about the growth of social problems like gambling, drug abuse and mental illness. It’s a loss of trust in common institutions (and not just parliament). For ‘old Australians’ it is an unease over multiculturalism and an uncertainty over national identity.

It’s also about the penetration of commercial values into all parts of our lives. As we enter the 21st century our world is not only faster, busier and more stressful it is also suffused with the language and values of business.

It once seemed common sense that public goods such as water, telephone services, electricity, road building and so on would be organised with the public good uppermost in mind. Privatisation, marketisation, competition and deregulation have become the new common sense – and bring with them a new set of values. Universities were once institutions whose rationale was in the knowledge they produced and passed on. Today universities jealously guard their ‘brand’ in the competitive market for fee-paying overseas and local students.

The market revolution

Humanity did not always live in such excessively market-driven economies. In pre-market agrarian societies life was regulated by custom and not markets, every action by an individual was moralised, invested with a sense of right and wrong which was determined by whatever religious or spiritual beliefs prevailed. Money was not the sole measure of value. Every action was measured against the weight of tradition, and every action occurred within a web of obligation towards family and tribe. Such societies were stable and slow paced. Lest we romanticise them, they were (and are) societies of material scarcity and sometimes people starved to death. Obligation was enforced by ostracism or violence. They were deeply conservative -- marriages are arranged and women obey men sometimes on pain of death.

The point of the comparison, as I said, is not to romanticize these societies, but to say this: our modern day instincts and minds were shaped by a million years of hunter-gather society then by agriculture-based societies for the last 10,000 years. Our human nature evolved in conditions which are utterly different from modern society. We always had the capacity for individual aspiration and self-interest but this was held in check by low material level which forced communal lifestyles for most of human history. Today as the material wealth of society soars to new heights, these instincts are less restrained. As well, a growing gap is emerging between these instincts and the more communal human instincts.

The market grew out of occasional exchanges on the periphery of human communities. In the earliest times, salt was traded over long distances, in later ones fruit, vegetables, animals and were bought and sold on a cycle of ‘market days’. Today the market is the central totem of our society, active around the clock, producing commodities, demanding our time and defining our lives. In this kind of society social relations are under constant pressure of being reduced to their commercial and instrumental purpose.

Once a robust sphere of non-commercial life existed alongside the world of the market. Today this non-commercial sphere, from the level of public institutions down to family life is shrinking and is itself being commodified, its elements being produced or packaged and sold on commercial terms. Old fashioned notions like the public good blur and the quality of life changes in so many ways. We live rushed lives, jamming work, fast food and leisure into the constricted space of our lives. One response is the popular radical movement in Italy today called the ‘slow food movement’ which stands for a different way of living, not just of eating.

This is the era of the New Capitalism whose outlines first emerged during the long boom which ended in the mid-1970s. Its flourishing only fully emerged after the impact of the Thatcher and Reagan eras made themselves clear. It is a turbo-capitalism, a lean and mean capitalism, a capitalism with no competitors.

Family values and the New Capitalism

The effect of the new commercial values is most keenly felt when it affects our most intimate places, our immediate circle, our family and close friends.

Families, friendships and other non-market bonds are a problem for economic liberalism and the commercial culture which it promotes. Relations between families, friends and similar communities tend not to be motivated by self-interest but by care for others and altruism. Parents raise their children because they love them, not for reward. They may receive a reward, such as the reciprocal love of their child but it is not because of this calculation that they spend time and money and less tangible things in caring. Nor is this solely because children are uniquely vulnerable. Among adults, friends help each other without a thought of monetary reward.

And this happens in communities as well. While writing this book I happened to visit the war memorial in the town of Goulburn in southern New South Wales. I was struck by an inscription honouring the dead soldiers. It read: ‘Service Before Self’. The society which chose these noble but quaint words might as well have been from antiquity rather than one within living memory. An ethic of service still exists in communities but more than ever today it works against the grain.

Care for others, altruism, non-market relations – such feelings, such motives and the actions which flow from them do not make sense for most economic theorists. They do not easily fit the model of rational, self-interested behaviour. The place where they flourish most of all is in families. One person who has done much to pinpoint the contradiction between market values and family values is the feminist economist, Nancy Folbre in her book The Invisible Heart. This American academic chose the title of her book as a play on words of the best remembered phrase in Adam Smith’s 1776 book, The Wealth of Nations. Smith saw the ‘invisible hand’ of the market – composed of a multitude of self-interested actions – resulting in a common good. Smith, often credited as the intellectual founder of neo-liberalism (it’s actually more complicated than that) pointed to the beneficial role of self-interest in the economy. In another memorable phrase he argues that ‘it is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own self interest.’

But Folbre points out that even though Smith was speaking figuratively his example is very misleading. The sale of meat by the butcher does not actually provide us with dinner at all. He provides the meat for dinner but the preparation of dinner (like many similar acts) is usually done by a wife or mother who does not act out of self interest. In fact, a vast, parallel political economy based on the ‘invisible heart’ continually lubricates and reproduces society.

The invisible hand represents the forces of supply and demand in competitive markets. The invisible heart represents family values of love, obligation and reciprocity. The invisible hand is about acheivement. The invisible heart is about care for others. The hand and heart are interdependent but they are also in conflict. The only way to balance them successfully is to find fair ways of rewarding those who care for other people. This is not a problem that economists – or business people – have taken seriously. They have generally assumed that God, nature, the family and ‘Super Mom’ – or some combination thereof – would automatically provide whatever care was needed.

Nancy Folbre points out that the book which launched Adam Smith’s career was not The Wealth of Nations but The Theory of Moral Sentiments. In it Smith showed he was perfectly aware of the existence of the kind of altruistic labour which Folbre writes. He assumed that some kind of strong moral and altruistic underpinning of society would continue indefinitely and not be fundamentally damaged by the operation of competition and markets. But the spreading and entrenchment of markets, and especially of the values they promote, is doing just that.

Since the days of Adam Smith the functions of the family have progressively been whittled away by the rise of industrial capitalism. From the introduction of widespread wage labour, the manufacture of food and clothing, to the provision of education and health, the family has been reducing continually. Not that this has been a uniformly bad thing. The traditional family depended almost totally on the unstinting and unpaid work of wives and mothers whose choices about their own desires and needs depended on the goodwill of their husbands. The market and the process of commodification, as we shall see later, are by no means entirely bad things. Folbre argues that capitalism weakened the family in some ways that were good in other ways that were bad. Wage employment was important for women giving them some alternatives to immediate marriage and motherhood. Some degree of financial independence became possible. ‘Most of us agree that the growth of individualism expanded personal freedom in some very healthy ways.‘

In the era of neo-liberalism these tendencies have rapidly intensified and are now having an opposite effect from expanding freedom. Today the final remaining functions of the family are being squeezed as the care of young children and the provision of food are increasingly provided by the market and the pressures of work constrict the time of parents. But the question is not just how much further we can go in this commodification. The question is whether we are already experiencing the costs of the crushing of our most intimate groupings and the devaluing of care.

Markets and the environment

One of the best known areas on which market values clash with other values is the environment. This is obvious in basic ways, such as the desires of property developers and construction companies to tear down heritage buildings or for logging or mining companies to despoil the natural environment. But this is a microcosm of what is happening globally.

Markets can harness self interest to produce massive economic growth. In the past century world economic output has increased twentyfold. This has brought enormous benefits in standards of living but it has been purchased at enormous cost to the environment and to our future. Between one third to a half of the world’s forests are gone and about half the mangroves and other wetlands. About three quarters of marine fisheries are over-fished. There is a crisis in the loss of biodiversity, with large numbers of species of birds, mammals reptiles and fish facing extinction or already extinct. The use of oil and coal plus deforestation has increased the amount of carbon dioxide in the atmosphere. The result is human-made climate change, with the melting of icecaps, erratic storms and desertification. The scale of it all and its implications are too difficult to contemplate for most people.

In her speech to the American Association for the Advancement of Science, the AAAS president, ecologist Jane Lubchenco said:

The conclusions … are inescapable: during the last few decades, humans have emerged as a new force of nature. We are modifying physical, chemical, and biological systems in new ways, at faster rates and over large spatial scales than ever recorded on Earth. Humans have unwittingly embarked on a grand experiment with out planet. The outcome of this experiment is unknown, but has profound implications for all life on Earth.

Another analysis of the global ecological crisis is aimed at the increasingly obvious glaring holes in neo-liberal theory. The economist and environmentalist David Korten argues that one of the key weaknesses of free market economics is that corporations can ‘externalize’ their costs. That is, they mostly don’t have to pay for, or face the consequences of the true cost of their operations. It is basic to market theory that the producer must bear all the costs of production and that these be included in the selling price of a commodity. In fact, corporations constantly try to externalize their costs. They try to ‘free ride’:

‘Externalized costs don’t go away – they are simply ignored by those who benefit from making the decisions that result in others incurring the costs. For example when a forest products corporations obtains rights to clear-cut Forest Service land at giveaway prices and leaves behind a devastated habitat, the company reaps the immediate profit and the society bears the long term costs. When logging companies are contracted by the Mitsubishi Corporation to cut the forests of the Penan tribespeople of Sarawak, the corporation bears no cost for devastating native culture and ways of life.’

Globalization and human values

The area of commercialisation and marketisation which has caused some of the greatest political controversies is not on the home turf of advanced industrial countries but concerns the less developed world. The social and moral crisis which is implicit in advanced countries is explicit in the under-developed world. In the latter the crises exacerbated by the global neo-liberal economy, can be a matter of life and death. For example, it can mean the denial of life-saving drugs to the dying due to intellectual property rules tightened at the insistence of pharmaceutical companies; it can mean the stripping of jungle mountains and plains of their natural cover by logging companies; it can mean the dumping of toxic waste from mining in rivers which are the life blood of local communities.

Or it can mean something less dramatic such as the refusal by wealthy ‘free trade’ nations to open their borders to the agricultural products of poorer nations. As a result, they pay $300 billion annually in farm subsidies which distort trade and lower world prices to the detriment of poor countries. About 25,000 American cotton farmers, for example, are paid US$1.5 billion annually as subsidies while they control 40% of global cotton exports.

The main moral defence of neo-liberal globalization is that it is necessary to assist people in less developed countries to gain some of those benefits of a higher living standard – clean water, affordable food, shelter, a health and education system. It is telling then that one of the most powerful rebuttals of this comes not from a radical in the anti-globalization movement but from the Nobel prize winner for economics, Joseph Stiglitz.

Explaining why he wrote his book Globalization and its Discontents, Stiglitz said his views on globalization were changed by serving in the World Bank where ‘I saw first hand the devastating effect that globalization can have on developing countries and especially the poor within those countries.’ Stiglitz argues that globalization has the potential to enrich the poor but must be ‘radically rethought’. What made Stiglitz critical of his own generation of neo-liberal economists is that he had a broader notion of human values which made him skeptical of ideologically-driven policy.