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Responsible capitalism


What are the negative effects of capitalism, and how deeply-rooted are they?

We hear much about the merits of “responsible capitalism” even from those close to the Labour Party, and this tells us two things immediately. Firstly, that many in the party, whilst championing social equality, are scared stiff to be thought of as anti-business, and secondly, that there is an acceptance among many people that there are far worse economic systems in the world than capitalism. The argument seems to be that if only its upholders were brought into line and made more accountable for its failings, then a sanitised version of capitalism might be workable.

Unfortunately, capitalism with a moral conscience is as rare as a comb in Duncan Goodhew’s bathroom cabinet. By and large, responsible capitalism is a chimera, a fanciful conception. For whilst the most sandal-wearing, vigorously-bearded Socialist would have to concede that driven people inevitably rise to the top in a competitive world, the capitalist must acknowledge that his system succeeds by keeping the vulnerable in their place. Capitalism is not the bright, industrious pupil who reaches the top of his class. It is more akin to the playground bully, who muscles his way to supremacy by exploiting the inadequacies of the weak.

Not that capitalism is incapable of whispering sweet nothings in your ear, as various commentators have been forced to admit. Thomas Day (1748-89), a member of the 18th century group of polymaths known as the Lunar Society, wrote a letter to Arthur Young praising the improvements in industry at the time: “What morasses have been drained, what arid deserts cultivated, what an increase of animals, of happiness and population!” However, as he had to admit, the advances threatened destruction in their course, having a tendency to bear away “liberty, public spirit, and every manly virtue.” The manufacturers were reducing the farmers to slavery, he spluttered. Sounds familiar?

Another who eventually accepted that self-interest was divisive was the poet, William Wordsworth. He came to realise that the growth of the free market was likely to enslave rather than liberate.

Today, trade union news sheets as well as the national newspapers routinely trot out statistics that illustrate the unequal distribution of wealth in the world. Oxfam announced in 2014 that the world’s 85 richest people had accumulated as much money between them as half of the world’s population, highlighting that people are increasingly separated by economic and political power, fuelling social tensions.

However, it was ever thus. According to the historian Jose Harris, just before World War I, ten per cent of Britain’s population owned 92% of its wealth. Robert Tressell’s The Ragged Trousered Philanthropists (1914) offers a perspective on how decent working people suffered poverty in order for the capitalist system to provide abundance and even superfluity for the few – all of which illustrates how little has changed since Tressell’s day.

I don’t do wealth envy, but I recognise when cash corrupts: when multinational companies can hold elected governments to ransom, and when the taxpayer effectively subsidises major chains because they pay so little that workers have to claim working tax credit in order to avoid privation.

President John Kennedy once declared that “if a free society cannot help the many who are poor, it cannot save the few that are rich.” It’s a statement worth heeding.

Mervyn Edwards

Posted: 2nd August 2016

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