Amidst the total incoherence that seems to characterise most of these "anti-capitalist" protests going on around the world (including here outside St. Paul's), Tim Harford brings a bit of sanity with this imagined dialogue.
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Capitalism can’t just be about money
Tim Harford
The Undercover Economist
05/11/2011
“So what do you reckon about the protests?”
“The occupation of the front doorstep of St. Paul’s Cathedral, you mean?”
“No, that’s a sideshow.”
“I hear you. Amazing the amount of fuss the media can make about a few people with tents, isn’t it?”
“Exactly. I’m talking about the issues, here.”
“Quite so. Well, I think we should overthrow capitalism and replace it with something nicer.”
“Don’t be daft. That’s the problem with this movement: no coherent proposals and no practical alternative to capitalism. Hello? Where were you when the Berlin Wall came down?”
“You’re the one who’s being daft. This is a false dilemma: schoolboy debating tactics. You’re trying to imply that either we swallow the existing system whole, or we stand shoulder to shoulder with Joseph Stalin. Well I’m not buying that.”
“You were the one who said he wanted to overthrow capitalism.”
“OK, I may have exaggerated for comic effect. But one of the problems is “capitalism” is pretty poorly defined, isn’t it?”
“I know capitalism when I see it.”
“Do you? Every successful economy in the world is a mixed economy: market forces plus hefty doses of government spending, redistribution and regulation. Plenty of room for sensible argument about how those mixtures should vary.”
“All horribly reasonable. It sounds like an attempt to distract from the fact that the rich aren’t paying their fair share of tax.”
“Aha, the 1 per cent, you mean?”
“Exactly, the 1 per cent.”
“How much tax do you think they should pay?”
“Um – well, more.”
“More than what?”
“More than they are doing now!”
“How much do you think they are paying now?”
“Well, not enough.”
“We’re going in circles here. We’ve established that you’d like the rich to pay more than a quantity of tax which you admit is entirely unknown to you. It’s 27.7 per cent, by the way.”
“What is?”
“The percentage of income tax paid by the top 1 per cent of earners in the UK. It’s 27.7 per cent. I looked it up. It’s on the revenue and customs website. It’s a little fact you might find useful next time you get into a discussion about whether it should be more than that.”
“Let’s go back to this something nicer business.”
“I’ve got a five point plan. Number one is more meaningful equality of opportunity. Left-wingers have been too interested in making sure people who make very different choices end up with similar amounts of money. Right-wingers have been too glib about levelling the playing field and accepting whatever outcome the market produces. We need much more attention to the quality of nurseries and schools.”
“More easily said than done.”
“Isn’t everything? Number two, raise more taxes from environmentally damaging activities. For some reason we seem to have decided that jet fuel and domestic heating deserve a tax break, yet simply being rich is regarded as the most profound of pollutants.”
“What about the banks? They’ve been doing toxic things.”
“They have, but the idea that the cause of the crisis was simply fat cat bankers is juvenile. The financial system – its regulations, risk management and ethics – is profoundly flawed. Fixing those flaws is a hugely technical problem as well as a political one. Fighting the banking lobby is going to be necessary but not sufficient. And that’s point three.”
“Point four?”
“We need to pay serious attention to our innovation system. Patents are useful in some circumstances but seem to be distorting the computing industry. There is far too little attention being paid to ideas that really matter, such as low-carbon technology or antibiotics.”
“And point five?”
“Point five is the most ambitious of all. We need a cultural shift in parts of business. Capitalism can’t just be about trying to make money – that’s the ethics of a used car salesman or a drug dealer. Capitalism has to involve a sense of creativity, boldness and pride in a job well done. The most successful companies have usually had this and many still do – from Apple to Brompton to Zipcar – but many financial companies seem to have long ago abandoned them.”
“None of this quite amounts to the overthrow of capitalism, does it?”
“No. I think it’s going to be rather more difficult than that – and a lot more useful.”
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