Sunday, 6 November 2011

FT: Capitalism need not be about greed and gambling

A worthwhile article in the FT by John Kay:

Capitalism “should be replaced by something nicer”, one group of demonstrators demanded. The slogan encapsulates the incoherence of the protests at Wall Street and the City of London.

More than a century ago the sociologist Werner Sombart explained the lack of appeal of socialism in the US with the observation that “all socialist utopias have foundered on roast beef and apple pie”. The socialist utopias of Russia and China would later founder on precisely those issues. For roast beef and apple pie, today read iPads and Twitter. Protesters know capitalism delivers their mobile phones. Only a minority would renounce this material world altogether: which is how the Daily Telegraph could report that most went off at night to enjoy the sprung mattresses and showers that have replaced hay bales and water from the pump during two centuries of capitalist industrialisation.

Indeed. One of my favourite tweets from Sunday Morning Live this morning was the one commenting on the impressive Wi-Fi signal enjoyed by the protesters.

Kay continues:
A semantic confusion leads us to use the word market to describe both the process which puts food on our table and the activity of gambling in credit default swaps. That confusion has enabled people to claim the virtues of the former for the latter.
The inventors of social networking sites resemble the occupiers of St Paul’s Churchyard tents more than the occupants of boardrooms. The besuited Winkelvoss twins, lobbying and litigating for a share of Mark Zuckerberg’s business, embody the deformed view of market economics which confuses business interests with free enterprise.

Of course, state should not prevent gambling, whether through casinos or stock exchanges, and it shouldn't take any interest in private sector executive salaries. What it should do is allow bad gamblers to go bust, and stop subsidising businesses (whether they be banks, car manufacturers, or eco-industrialists). We need less government intervention, not more.

No comments:

Post a Comment