Is there an alternative to Capitalism?

Am I the only one getting thoroughly sick and tired of the protesters in front of St Paul’s Cathedral? I get their point, they think life in a capitalist system is unfair and should be made more fair. Yeah great, any suggestions about what a better system than capitalism is? No? What a fucking surprise.

The Church of England is not, at least in principle, in favour of huge profits by either individuals or corporations (except themselves, they do have a large portfolio of stocks in the FTSE). When stopped by the police from entering the London Stock Exchange, the protesters decided to block the entrance to probably the only organisation in the local area not wholly obsessed with profit at any cost. A bit of a PR coup really, even if it was an accident, as the general public are more likely to care about the obstruction of a church of a god than a church of money. One major thing they seem to have overlooked (a fact which seems to be overlooked by most modern protesters) is the provision of a viable alternative.

In 2003 when many people marched throughout Europe to show their displeasure with the planned invasion of Iraq, the alternative was to not invade. Whatever your personal views on the invasion, not invading was always a valid option and was given as the chosen alternative by the protesters in that movement. In more recent times, many protests have been due to economic circumstances. From university tuition fees to public sector pensions, today’s protesters all seem to have the same message. “It’s not fair” and not much else other than to say that another way should be found. This is not an alternative, none of the major political parties have viable options due to the current hamstrung nature of the public purse, there simply isn’t enough money in the treasury for students or public sector employees to be given special treatment anymore. All that seems to come out of the current protest camps are a variety of ways of telling us “it’s not fair”, “it” being capitalism or at least life under a capitalist system. I have yet to hear anyone give a viable alternative or to even explain what they mean by “capitalism”. As far as I can make out, it was the removal of knowledge in the marketplace by obscuring the products for sale that caused much of the financial distress being seen now.

Imagine a farm produce wholesale marketplace. All the producers have their wares on show and you are free to barter with them for the prices you will be prepared to pay. You can see and touch the produce, you can tell the quality and know what it will be worth to you once purchased. However, as time goes by some producers start to pre-package their products, making it very difficult to tell the quality of the goods before purchase. Not only that but you cannot even open the box after purchase because you will be re-selling it on to another dealer with the eventual owner only knowing the quality when it is too late to do anything about it, you only have the word of the producer to go on for any knowledge as to the quality of the product. With no checks on the producers, is it any wonder this modern-day version of Jack’s magic beans economics failed? Whatever anyone tells you, this is not capitalism. Blocking the workings of Adam Smith’s invisible hand by making the marketplace opaque not only prevents free access to the markets by those who do not understand the jargon or etiquette of the stock exchange, it limits the scope of the free market system. Poor products will not sell well at a fish market, why should their stocks rise in the FTSE? True capitalism may be inherently unstable and volatile but as long as transparency is maintained, long-term rises in stocks with no worth (and slow falls in valuable stocks) will be kept to a minimum. It is not less capitalism that is the solution, it is more freedom, transparency and accountability in the marketplace that can return us to economic growth.

Whatever you hear the protesters say, we are all better off in many ways than our parents generation. They in turn were better off than their parents and so on. This is not only in terms of material consumer goods such as cars or televisions (although many of these, such as washing machines or dishwashers, could be said to have improved the lifestyles of their users) but also in terms of working hours and conditions (including paid holiday, much safer working practices and conditions, minimum wage etc), higher life expectancy both in terms of quantity and quality (retirees going on activity holidays would have been unheard of decades ago) and also in the education and freedom of career choice available to the modern school/university leaver. In the early part of the last century many men and indeed children worked in mines, dangerous factories and other industrial sites. Regardless of the education received at your local school, you where unable to choose a career, it was provided by the local works, you did what your father did, you were unskilled and could work nowhere else, hence the fear felt by many of these communities when the global market made many of these works unprofitable and left them out of work. Instead of seeing the opportunity provided by these closures, many sought in vain to stop them by protest, making the situation for their communities worse. Embracing the changes in the modern world and changing with it, rather than fighting to hold back the tide, is the only way forward today. We can all be better off by using the free market to better our own situations, trying to halt globalisation can only work against you, resulting in you been left behind those who have chosen to press forward into modernity.

The only examples of non-capitalist policies given by the current protesters that I have heard have included using co-operative banks or shopping at The John Lewis Partnership. These companies exist inside the capitalist system not outside and are subject to all the same forces, unless you force people to run companies in this way, many will not choose them. Given that many of these people seem to not be in full-time employment (or at least don’t have to go to a permanent place of work every weekday), they shop at John Lewis & Waitrose and use banks which are more expensive to the users than most on the high street, I presume they are not those most at risk from the ravages of this inhumane capitalist system. Without the modern economic booms of the late 1980s and early 2000s I doubt if many of them would be in a situation to afford to protest in this way.

The continual flow of population from states with restrictive economic policies to those with higher levels of economic freedom is evidence enough that living in these kind of nations is not popular with those who have no choice in the matter. From Cuba to the former Soviet Bloc to South-East Asia, the general populace have never been happy to live under repressive, far-left regimes. Fully socialist or communist states have never been (and can never be) maintained inside democratic systems, people will always want more freedom to choose.

Scandinavian countries so-called social-democractic polices are often touted as a kind of “3rd way” in between the extremes of capitalism and socialism. The results of their policies are plain for all to see: high GDP, high human development index scores and low Gini coefficient all sound almost too good to be true. There are however certain factors which have helped them (especially Norway & Sweden). Being generally sparsely populated, often mountainous and forested has given them easy access to sustainable timber, hydro-electric & geo-thermal power, iron-ore and other minerals. Fertile fishing grounds and the discovery of North Sea oil & gas when combined with their relatively low population have also helped boost their ability to fund large welfare states, resources that are simply not available in the levels required to most Western European states. Restrictive immigration policies (until recently) and a lack of former imperial colonies contributed to high levels of social homogeneity. This, combined with some of the freest movement of labour in Europe (hiring and firing is surprisingly easy for such ‘left-wing’ governments) has hindered the abuse of the welfare state so often seen in this country. Other than high tax rates and some nationalised industries, their economies are free-market based with emphasis on foreign exports of both natural resources and high-end technology. High levels of population density, a relative scarcity of natural resources and a pre-existing welfare dependency culture mean that these models cannot be copied into the UK wholesale and although there are aspects that could be adopted they would, despite their long-term benefits, be expensive to implement and would increase the expense of government borrowing in the short-term.

In both the long and short-term, I can see no viable alternative to free-market economic policy. It remains to be seen how much state intervention is necessary or desirable to maintain (or start) growth and prosperity while continuing our inevitable progress toward human health and happiness. My own feelings are that people and companies should be left to trade as best they can with as little government intervention as possible. Laws and policies that ensure free trade and equality of opportunity can, in my opinion, only ever be good but laws that restrict these freedoms should always be avoided.

“It is not the creation of wealth that is wrong, but the love of money for its own sake.”
 
“No one would remember the Good Samaritan if he’d only had good intentions; he had money as well.”
 
“There can be no liberty unless there is economic liberty.”
 
– Margaret Thatcher
 
 
Thanks for reading
 
Rowan
 
All comments are welcome, I’ll answer as many as I can
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