Capitalism has little to do with it, Mr Johnson

Triumphant about Britain’s success with vaccination, Boris Johnson ascribed it to “greed and capitalism.” He later withdrew the G-word, but the damage was done.

Liberal, which is to say illiberal, papers are running scurrilous pieces about the PM glorifying a deadly sin and equating it with capitalism. In fact, he did neither.

Johnson was merely cocking a snook at the people he facetiously calls “our European friends”, whose corporatism has supposedly failed where Britain’s capitalism has supposedly succeeded. Left in the subtext was an “I told you so” aimed at persistent Remainers. You see, Johnson was implying, had we listened to you, many more Britons would have died.

However, this is a wrong case study to cite as a vindication of capitalism, even though nationalisation is marginally less rife in Britain than on the continent. It’s not immediately obvious why, say, the American pharma company Pfizer and the Anglo-Swedish AstraZeneca are any more capitalist than, say, the French Sanofi. They aren’t – for the simple reason that none of them is capitalist in the real sense of the word.

Capitalism these days exists mostly at the level of a corner sandwich shop or, if you’d rather, a dot-com start-up. But today’s giant multinationals are neither run nor controlled by capitalists, if we define the breed as the owners of capital. Modern captains of industry don’t necessarily own the capital of which they dispose, and nor do they live or die by their success or failure.

They take risks mostly with other people’s money, gaining fortunes by achieving success, while personally risking little in case of failure. When they fail, they take the king’s ransom of redundancy and either move on to the next bonanza or retire to some tropical paradise of philistine comfort.

The qualities essential for a rise through modern corporations are different from those needed in a capitalist environment. They are, however, close to those required for careers in government bureaucracies.

Today’s multinationals bear more resemblance to government departments than to entrepreneurial concerns. Thus, even as modern governments grow more corporatist, so, tautologically, do actual corporations. Witness the ease with which executives switch from the corporate to the government arena and back again.

Pharmaceutical companies, more than most others, work under the yoke of government regulations. The state tells them what they can and can’t produce, how they must test their products and often how much they are allowed to charge for them. This, in addition to the noose of imposed quotas and red tape suffocating all industries in general.

(No libertarian criticism of, for example, mandatory quality control of drugs is implied. I’m merely describing how things are, without suggesting that pharmaceutical companies should be free to market potassium cyanide as potassium chloride if that suits them.)

Specifically in the vaccination project, the state and corporations combined their efforts. The state placed the orders, specifying the requisite efficacy and production volumes. It even financed much of the research.

I also detect the state’s hand in AstraZeneca’s decision to sell their vaccine at cost — after all, the company is supposed to owe its highest loyalty to the shareholders, and those chaps like profits and dividends. AstraZeneca must have received some incentives to take a more altruistic approach. It could have been, for example, a promise of future state contracts, fast-tracked regulatory approval or some such.

If our vaccination success is a poor case study for capitalism, it’s an excellent one for Brexit. For even without this empirical proof, any rational analyst (that is, one not blinded by ideology) would know that a single independent government has to be more flexible and fleetfooted than an unwieldy Leviathan of 27 states.

So it has proved. Accountable only to its own people (and even there not so much), HMG moved fast to place the orders for the vaccine, prepay the agreed amounts and chip in with research and testing expenses.

Thus the ensuing success is an exemplar of effective collaboration between the state and industry, not of the otherwise demonstrable superiority of capitalism over any other economic method. But this success also tells a cautionary tale.

Such cooperation is desirable, really indispensable, at crisis time. Whether the crisis is a war, pandemic or natural disaster, libertarian concerns must fade into the background. National necessity comes to the fore, and it’s best served by an effort spearheaded by the national government. Desperate times, dangerous measures and all that.

However, history shows that, even when the times cease to be desperate, the government is reluctant to give up its power to apply dangerous measures. In this case, a distinct possibility exists that, once the Covid situation has been resolved, HMG will try to apply the same model to the entire economy and the entire country, to the detriment of both.

History also shows that nowadays forewarned doesn’t necessarily mean forearmed. Modern people are like dead fish – they can only go with the flow. Creeping state control doesn’t bother them very much; they aren’t trained to be alert to its dangers. When they develop such alertness, it’s usually too late.

P.S. Contrary to the Remainers’ doomsday predictions, capital is flowing from the continent to Britain, not in the opposite direction. This, according to financial analysts, explains the rising exchange rate of the pound against the euro — long may it continue.

3 thoughts on “Capitalism has little to do with it, Mr Johnson”

  1. All correct. Hasn’t been capitalism in the USA at least for almost ninety years now [FDR]. There is modified capitalism we can agree on. YES.

  2. The word ‘capitalism’ has, like ‘fascism’ become almost entirely meaningless.

    Political taxonomy in general has contorted to the point where it is often impossible to conduct a discussion on politics, and that’s in the rare instances where both parties act in good faith.

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