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19 September 2012 By Edward Hadas

Revolution was not on the agenda when the Second Vatican Council of the Catholic Church opened on Oct. 11, 1962, almost exactly 50 years ago. However, the gathering marked the start of a new era, not only for the world’s largest centrally-run religion. During the following years, the hope for a better, freer world led to everything from the sexual revolution to the Prague Spring, from African independence to the hippie culture of Woodstock. A half-century on, it seems a good time for an economist to take stock.

The economy was not the top concern of the ’60s would-be revolutionaries, but calls for a new society had two revolutionary economic implications.

First, like so many other parts of the established order, the economic “system” was to be overthrown. The target was clear enough in Eastern Europe – the Communist planned economy. Elsewhere, the economic villain was harder to pin down, although it was often assumed that “capitalism” was intrinsically evil – heartless corporations and excessive materialism in the West and post-colonial exploitation in the Third World. It was time for radical change; if not a return to some imagined pre-industrial communal paradise then at least a massive refusal to become cogs in the machine. It hardly seemed to matter then that dissidents in the East were longing for what protesters in the West were loathing.

One of those 1960s dreams has come true. Communism is gone, save for Cuba and North Korea. Otherwise, the “system” appears well entrenched. Corporations, larger and more impersonal than ever, have extended their reach in a globalised world. Developing economies may be less in thrall to the former colonial masters, but indigenous entrepreneurs are just like their western exemplars. The communes are closed or have gone commercial. Alternative careers are rare, money and finance ubiquitous.

The second economic revolutionary demand was for the abolition of poverty in the midst of post-War plenty. This sentiment led to the foundation of the United Nations World Food Programme in 1961 and the U.S. government’s war on poverty in 1964. The post-Vatican II Catholic Church was one of the keenest promoters of global economic “Justice and Peace”.

That dream has come closer to reality. True, hunger still plagues a billion people, but abject poverty has diminished as GDPs have risen around the world, and safety nets have helped the needy in richer countries. Nonetheless, the 1960s’ revolutionary and religious fervour made only a minor direct contribution to these improvements. Developing countries primarily copied the practices of rich countries while the welfare state mostly expanded existing programmes.

It might sound like “the system”, which was not overthrown, has actually been good for the world. Was the rage against the machine all in vain, and the idealism unnecessary? I think not, and not only because of the collapse of the Soviet economic model.

While most of the children of the 1960s eventually signed up for work within the system, many did not completely abandon their higher aspirations. As a result, the counter-culture spirit has infiltrated the corporate world. Capitalism has proved flexible enough to change in response to its critics. In the 1960s, theory Y management – the idea that employees should be encouraged more than disciplined – looked original. It is now obvious. Corporate claims to “social responsibility” may often sound hypocritical, but executives would not even bother to pretend if they didn’t believe that companies should do more than merely provide profits for shareholders. “Don’t be evil”, as Google’s founders put it, is a 1960s-style slogan that most bosses would now endorse.

The 1960s commitment to the elimination of poverty has also borne fruit. Without it, companies would be less willing to offer better conditions for their employees in poor countries, or to demand better conditions for their suppliers’ employees. Without it, western politicians would be more hostile to the expanding power of China and former colonies. Without it, there would be even more hostility to economic immigrants struggling to earn a decent living in rich countries.

Of course, history does not repeat itself. Last year’s global Occupy Movement didn’t amount to much. In a way, that failure is a sign of the greater success. The decade’s economic idealism has had enough influence that calls for radical change now sound silly.

Nonetheless, idealistic dreamers are still valuable. They can remind the world that the ultimate purpose of a prosperous society is not wealth for its own sake, but something better. I would suggest three goals for the grandchildren of the 1960s. First, the battle against pollution is not yet won in rich countries and has only begun in the developing world. Second, there is an urgent need for a financial system which doesn’t have greed as its only engine. Finally, the gulf between rich and poor is still too wide. It is too often forgotten that a poor man’s rise from wretched poverty does more good for the world than a rich man’s latest bauble.

 

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