The US banking system faces losses of over $3,000bn. Japan is in a depression. China is headed for zero growth. Some still hope that urgent surgery can restore the status quo. But more feel that we are at one of those rare points of inflection when nothing is the same again.

But if one dream is over, what other dreams wait in the shadows? Will capitalism adapt? Or should we be asking again one of the great questions which has animated political life for nearly two centuries: what might come after capitalism? Only a few years ago that question had been parked, deemed about as sensible as asking what would come after electricity. Global markets had pulled China and India into their orbit, and capitalism’s triumph appeared complete, with medievalist Islam and the ragged armies that surround the G8 summits jostling to be its last enfeebled competitor. Multinational companies were said to command empires greater than most nation states, and in some accounts had won the affiliation of the masses through their brands.

Yet the lesson of capitalism itself is that nothing is permanent—”all that is solid melts into air” as Marx put it. Within capitalism there are as many forces that undermine it as there are forces that carry it forward.

In this essay I look at what capitalism might become on the other side of the slump. I predict neither resurgence nor collapse. Instead I suggest an analogy with other systems that once seemed equally immutable. In the early decades of the 19th century the monarchies of Europe appeared to have seen off their revolutionary challengers, whose dreams were buried in the mud of Waterloo. Monarchs and emperors dominated the world and had proven extraordinarily adaptable. Just like the advocates of capitalism today, their supporters then could plausibly argue that monarchies were rooted in nature. Then it was hierarchy which was natural; today it is individual acquisitiveness. Then it was mass democracy which had been experimented with and shown to fail. Today it is socialism that is seen in the same light, as a well-intentioned experiment that failed because it was at odds with human nature.

What happened to the military is another useful frame for thinking about capitalism’s future. We are only a few generations from societies where the military stood at the apex of status and respect. War was part of the natural order, the…

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