His basic proposition is that the current economic crisis does not necessitate the creation of a wholly new system, underpinned by new ideas. What we do need, however, is the proper application of the good old ideas that somehow fell by the wayside in recent years: managing the shortcomings of the market through regulation and selective state provision. He traces the belief that the market is insufficient all the way back to Adam Smith.
The piece is particularly interesting to me as he questions the usefulness of the term 'capitalism'. I've thought for a while that the idea that there is a capitalist 'system' not particularly helpful.
'Capitalism' is defined as a situation where there are property rights and market relations governed, to some degree of effectiveness, by the rule of law. This now describes practically all of the world, with very minor exceptions such as North Korea (more of a weird cult-state than an alternative model). As such it doesn't really have any descriptive purchase.
A good way to test whether the term describes anything useful is to consider the improbability of its absence. Despite the headlines about the 'end of capitalism', I don't believe anyone is seriously expecting the abolition or demise of property rights and market relations. It's like describing our economy as one based on the breathing of air and expecting this to reveal something significant.
The whole idea that there is something called 'capitalism' was only really tenable whilst there was an alternative which could be presented as potentially viable and successful: Soviet Communism. And the Soviet experiment now looks like a journey down a dead end. So twenty years after the collapse of capitalism's 'other' I think the word's retirement is long overdue.
Why is this worth doing? I believe if we stopped using the concept we'd see the options ahead of us more clearly.
In particular, when we look at things through the prism of capitalism we lose sight of the moral framework that should govern behaviour. This is because, just like communism and socialism, capitalism is an all-encompassing system and, as such, self-justifying. Its logic and, implicitly, its morality is inherent.
However, I would argue that we need to make decisions about how resources are distributed with reference to an independent moral framework rather than to how the system should work for the sake of consistency. Such a morality is not intrinsic to the market (or indeed to business) but must govern it. The market cannot justify (or damn) itself. It is a morally neutral but highly effective tool. 'Capitalism' as a concept muddies this point.
Rather, Ralf Dahrendorf in his 'Reflections on the Revolutions in Eastern Europe' argued that we need to get away from the primacy of economics, that we should stop looking for all-encompassing systems. The important thing is for there to be an open society (as per Popper). This will ensure there is the best discussion and application of what morally appropriate rationale be brought to bear on the distribution of resources.
Don't get me wrong, I'm in favour of a vibrant market and a limited state. It's just that I don't believe capitalism really exists. There's just you and me and what we believe to be fair and efficient. That's the best basis for arguments about how we organise our society and economy.