Capitalism on the wane?

We thought we’d reached “the end of history”, said Philip Aldrick in The Times. The fall of the Berlin Wall was said to herald the decisive triumph of free-market capitalism – its “final coronation”. We were wrong. Since the financial crash of 2008, capitalism has become a dirty word. Most British people, as a recent poll found, regard it as “greedy, selfish and corrupt”; are more sympathetic to socialism; and favour renationalisation of the railways and utilities. It has got to the point where both the Prime Minister and the Chancellor felt compelled to give speeches last week justifying a system that “has delivered vast wealth across the West” and doubled living standards in the UK in 40 years. “A free market economy,” Theresa May intoned, “is the greatest agent of collective human progress ever created”. That a Tory PM should harp on that point , said Toby Helm in The Observer, is a measure of how terrified she is that Jeremy Corbyn may be right: that his rejection of contemporary capitalism is “the new mainstream”.

Except it isn’t, said Aditya Chakrabortty in The Guardian. The British people haven’t embraced Karl Marx. It’s not capitalism they’ve turned against, it’s the appalling way the Tories have handled it. The Conservative Party once took it as read that “the way to keep voters true to capitalism was to allow them some share in its dividends”, to make them feel part of a property-owning democracy. Yet the Thatcherite policies they’ve espoused since the 1980s – relentless privatisation, deregulation, an austerity programme targeting the poor – have done the reverse. Home ownership has slumped to its lowest point in decades; “share ownership among individuals is below where it was when Thatcher entered No. 10”; the average British worker earns less than he or she did before the financial crash. In fact, today’s 15- to 35-year-olds, as the Resolution Foundation now forecasts, could earn less over their lifetime than their parents did. In sum, the Tories have “defended capital rather than capitalism”.

But what we’ve experienced is far from anything resembling “unbridled free-market capitalism”, said Oliver Wiseman in Capx. Take housing. It’s a market that bears no resemblance to the “unregulated Wild West” that Corbyn imagines our economy to be. It’s a market in which the Government “builds houses, subsidises houses, taxes houses”; in which “it decides how many houses should be built and where”. More often than not, it’s government rules and planning regulations, not the unbridled free market, that thwarts the supply of new houses. That’s why there is something bogus about this entire controversy, said Ben Chu in The Independent. Britain, like most affluent countries, has a mixed economy. May and Corbyn may differ as to where the dividing line between state and market should fall, but their differences lie “on a recognisable continuum”. May says she wants a louder voice for workers in boardrooms. Corbyn is not calling for the nationalisation of supermarkets. To talk as if one side is offering us “capitalism” and the other “socialism”, is nothing short of “fatuous”.