“Join me in a toast to capitalism — still our only hope for progress” says Matthew Syed in the Sunday Times today in an article that will no doubt gladden Rupert Murdoch’s heart, if he has one.
I suppose in a world, and especially a country, where everything has to be binary economic and political system choices have to be binary as well. Capitalism good, Socialism bad if you like. The only workable reality is different. We have a mixed economy because There Is No Alternative – the modern TINA is participation between the private sector and the State.
Every nominally capitalistic enterprise lauded for its achievements by Mr Syed could not operate without services provided by the State. From healthcare for its employees to transport infrastructure. From the police and the emergency services to welfare and transnational relations on trade Government, and the public sector, are essential.
Whilst the private sector relies on the public sector the reverse is also true. The National Health Service, whilst publicly owned, has a raft of private sector suppliers – not least for the crucial dispensing of medication. Our healthcare system depends on a significant amount of contracting out. So does virtually every other public service.
The real threat to common-sense in our economy and our society comes from ideology. The Orwellian Good/Bad depiction – the simplistic and naive description of the heroics of capitalism here for example. The recent capture of the Labour Party by old-fashioned Clause IV Socialists was a victory for ideology and dogma over pragmatism. But those on their soap boxes crying out for Socialism are matched by those screaming for unbridled Capitalism. They are both demonstrably wrong.
Modern economies, the creators of wealth and progress, have been driven by free enterprise and private sector entrepreneurs. But decades of unbridled capitalism led to abuses to such an extent that Governments had to step in. Regulation of the manufacturing sector, for example, came from government not out of the kindness of the hearts of Victorian businessmen. The growth of the Trades Union movement came similarly as a response to exploitation.
The modern day debate should be ideology free and pragmatic. Fine tuning of our economy, including who does what and who owns what, should be based on public interest alone. Margaret Thatcher’s administrations and those of her Tory successor John Major gave us the core of the public/private mix we still have today. None of the services privatised in the 1980s and 1990s were renationalised by Blair or Brown. There is certainly a case for greater public accountability in some of them and possibly a return to public ownership, but not for ideological reasons.
The real modern triumph is not “capitalism” as such but the mixed economy. This is a continuous task and demands continuous review. But it’s fine tuning not Revolution that makes sense. We don’t need a neo-Thatcherite privatising revolution any more than we need the dead hand of Corbynite socialism.