Capitalism — what’s in a name?

Last week all three party leaders made speeches on capitalism in which they attached different modifiers to the word. Mr Clegg trumpeted ‘responsible’ capitalism based on employee ownership. Mr — or should it be Comrade? — Miliband decried ‘predatory’ capitalism. Mr Cameron came out in favour of ‘socially responsible and popular capitalism’. None of the three identified the fundamental problem of capitalism, as it has become.

Actually, the problem starts with the very word ‘capitalism’. Show me someone who uses it often, and I’ll show you someone in need of a remedial course in both political economics and elementary logic.

The word has largely negative connotations, and that’s how it was understood by those who first put it into general vocabulary. ‘Capitalism’ was first used in its modern meaning by the French socialists Blanc and Proudhon, and it became a common term of abuse courtesy of Marx and Engels. In other words, ‘capitalism’ is a pejorative term used by socialists and anyone else wishing to disparage the underlying concept.

As such people have difficulty defining the concept positively, they define it negatively — not as something it is (free enterprise fuelled by capital), but as something it isn’t (socialism). Logically, they should talk about ‘non-socialism’ instead, for that’s what they really mean. Implicitly then, ‘capitalism’ is a swear word.

Understood negatively as non-socialism, ‘capitalism’ will appeal or repel depending on one’s attitude to what it isn’t. And one’s attitude to socialism depends on whether one proceeds from common sense or ideological bias. Leaving the theory aside, simple empirical observation will suggest that the amount of economic misery in a country is directly proportionate to the amount of socialism in it. To this simple equation there are no known exceptions.

In the economic game, socialism is broadly characterised by the state being a major player, rather than merely the referee. In Stalin’s Russia, for example, the state owned 85 percent of the economy, whereas in Britain it’s still only about 50 percent (closer to 75 in the north of England and the Celtic fringe), so there’s room for growth in that direction.

Cameron is to be complimented for his judicious use of ‘capitalism’. In his speech he mostly used positive terms like ‘free market’ or ‘free enterprise’, which he described correctly as ‘the best imaginable force for improving human wealth and happiness’. Now happiness is a nebulous notion, and one that America’s Founding Fathers ill-advisedly inserted into their Declaration of Independence. When later pressed for a precise definition, they explained that happiness equated to what Cameron called ‘human wealth’. The add-on ‘…and happiness’ is therefore tautological.

Now, only someone who is as feeble of mind as he is strong of leftie animus (e.g. Ed Miliband) will deny that this kind of happiness is always much greater and more evenly spread in conditions of free enterprise. Moreover, free enterprise generally presupposes a reasonably free society, although China has added numerous qualifiers to this presupposition.

However, both the defenders of free markets and their detractors reduce a very complex issue to the simplistic binary proposition first popularised by Orwell’s animals: ‘Capitalism good, socialism bad’ or vice versa. Their frame of reference is identical; they just disagree on the number of legs.

Both regard the economy as a panacea, a cure-all treatment of every social ill. If that’s what’s expected of the economy, it’ll invariably fail. No -ism can live up to such a lofty expectation.

Leading the party that’s still nominally called Conservative, Cameron understands this better than his colleagues, which is why he’s calling for a capitalism ‘in which the power of the market and the obligations of responsibility come together’. Suddenly the desire to compliment Dave, which is seldom close to the top of my aspirations, fades away. For he is mixing up the proverbial apples and oranges.

Free markets are there to make a few people rich, most reasonably comfortable and a few poor. Responsibility comes into it only inasmuch as it’s a pragmatic tool for controlling social unrest animated by the sixth deadly sin: envy. That’s why, while it was always understood that a competitive free market would, like any other competition, produce its winners and losers, even the early winners had to make sure that others didn’t lose too badly. Thus a social safety net was put in place under the economic summit to catch those falling down to the flinty ground below.

As free markets were gradually ousted by modern corporatism, the capitalist, the owner of capital, disappeared as the pivotal figure. That distinction has passed on to the bureaucratic manager who disposes of the capital he doesn’t own. This figure lacks a face — can you name offhand the current CEO of Ford or Marks & Spencer? The names are still on the door, but they are now attached to impersonal entities, not to any particular capitalists (which term, incidentally, predates ‘capitalism’ by a good 700 years).

As markets are now largely controlled by increasingly globalised corporations converging with increasingly globalised governments, ‘responsibility’ has become a meaningless shibboleth. If before it meant softening the plight of those who fought the good fight and lost, it has now come to mean breeding and fostering a class of those who have neither fought any fight nor have the slightest intention of ever doing so. As such, it’s a device for the self-perpetuation of the corporatist elite made up of both corporate and governmental managers. By paying off those who could potentially unseat them, they buy themselves a few more years of corporate power, while reducing ever greater numbers to being just that: numbers, not men and women.

Britain has neither capitalist nor indeed free markets any longer. It has a largely dysfunctional population corrupted by what Cameron calls ‘responsibility’ into apathy, ignorance and sloth. The problem with our economy in particular and society in general isn’t too little ‘responsibility’ but too much.

And the problem of which all three party leaders are painfully aware is that free, capitalist production can no longer pay for controlled, socialist distribution, otherwise known as ‘responsibility’. The will is there, but the money has run out. All three respond in the only way that comes naturally: instead of making responsible, but hard, choices, they make irresponsible, but easy, speeches. They aren’t trying to improve the economy; they are trying to improve their own electability.

Regarded in that light, perhaps Cameron did a bit better than the other two. There are still enough voters out there for whom ‘capitalism’ doesn’t sound as negative as it did originally. Whether they’ll consent to be tricked… sorry, I meant governed by the wielders of the word and negators of its meaning remains to be seen.





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