Capitalism isn’t cosy shock

I appeared as a witness at a World Congress of Faiths “Moral Maze” before a small audience in Southwark Cathedral last night. Surprise, surprise I defended capitalism against a range of (mostly religious) critics.

This is more or less what I said.

Capitalism is of course rather lovely, but it isn’t cosy. Like freedom, it isn’t by itself virtuous. It is (like freedom) something people want and make when they live in an orderly society with fairly decent government. It grows where people get to make choices.

It is arguable that in bad societies, capitalism itself could become a Bad Thing. But it doesn’t seem to work like that. We find – by living in them – that the great capitalist societies are also agreeable and interesting places. It is pretty likely that societies get nicer the more capitalist they become (at least we hope that’s what will happen in China and Russia and other spots).

This may well be because capitalism has so many benign features. It requires trust, co-operation, good laws, sophisticated information flows. It is mostly a process of voluntary agreements.

So one can perhaps say that capitalism has been the product of good societies, and is as good as they are good, in a process of mutual reinforcement.

Capitalism is often posited as the cash nexus which destroys human relationships, community and small business. This is nonsense since for every small business (a high street grocers, say) which is destroyed by competition, capitalism (a bank loan or overdraft) is helping to set up another small firm (an organic farm perhaps).

Insofar as big business thrives, it does so because people like the services and products big firms provide.

Capitalism is inventive and that produces problems as financial structures and institutions run away with themselves. The financial world is of course prone to herd-mentality and unwarranted enthusiasm, when the vigour of greed – so valuable much of the time – looses the bonds of (boring) caution. But even with boom-and-bust and the pains of these cycles, the history of capitalism remains one of growth in material prosperity punctuated by occasional and frankly marginal dents. (And yes, the downturns cost real suffering, no doubt about it.)

Of course there is heated debate about how much capitalism ought to be regulated, and how much of its wealth ought to be syphoned off for socialised welfare.

Its critics describe capitalism as a monolithic system with its own interests. This is the bit I find hardest to counter.

On the one hand, it is manifestly true that for all working purposes capitalism is sort of total. The leftiest commune would have to bank its loot somewhere, etc. On the other, capitalism offers a huge variety of engagements with its tentacles, and especially a wide range of riskiness in occupations and investment opportunities.

I think capitalism is beautiful and interesting and quite or very good in its influence. But I like it for reasons which its critics hate: I like its providing a range of experience – civilising a range of experience – from the most obviously virtuous to the frankly all-but piratical. I don’t think it would be any good if it didn’t. 

I may be on the winning side in this sort argument, though it hardly ever feels like it when I am talking with audiences of the kind which turn out for debates. This may be the first modern recession to have left intact a generalised if wary respect for capitalism.

Of course, the way I talk about capitalism may be coloured by my general enthusiasm – it has been called Panglossian – to think positively. It won’t entirely do for me to say that capitalism’s critics seem to indulge in negativity. But I do think they are longing for a rule of virtue which would be boring and perhaps nasty if it were achievable.

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Publication date

06 November 2009