Capitalism - Part 2

Part 1 was about the version of capitalism we are living with has been changing with 3 versions that I can see today, they are:

• Capitalism with Democracy - old style, welfare state included.

• Capitalism Chinese style - No democracy, Communist party (or Oligarch) rule, state control.

• Capitalism American style - Laissez-faire, small Government or a plutocracy and no welfare state.

These are versions of the religion of capitalism. I think that since the 1960s the pendulum has been swinging back from old style Capitalism with Democracy towards the American style. This is a version that we have not lived under before and it is becoming extreme to the extent that things are breaking, as they did with Communism where it became too distorted.

Capitalism American Style

This version of capitalism is sometimes called Laissez-faire and that is the version of capitalism we are experiencing today. Its the version of capitalism unleashed in the UK by Thatcher when the pendulum swing started, it was accelerated in 1989 when the Berlin Wall fell and communism collapsed, and was given a further boost in 2008 in the global financial crisis.

It is also the American Republicanism version of democracy and to some extent even of Democrats due to their natural lean to the right. It is the version of capitalism favoured by large banking and financial institutions where they control the strings of politicians. Its the version of capitalism that comes under the misleading term "the Washington Consensus". This is misleading because there is absolutely no 'consensus' for it. Outside of America it may better be called the Washington Doctrine (in the US they use this term to talk about something else, connected to George Washington).

Inflicting the Washington Doctrine around the world is down to institutions like the CIA, the World Bank and the IMF, and its partner institution the EU, all supported by the likes of Goldman Saches, JP Morgan, Citibank, RBS, and other parasitic businesses in their universe such as Deloitte and PWC. The Americans have developed their colonialism into one where invasion and occupation is not always needed, one which wraps their corporate interests up closely with their intelligence community and their military interests and if necessary, military strength. The combined economic interests of these groups can be protected by apparent third party institutions like the UN.

The UN and the EU both do good things, which is why they are useful to the Washington Doctrine. If you have a program to feed starving children like the UN does, or have national Governments within the EU who promote unions like Germany does, it makes it much more difficult for people to look at the pain inflicted economically in South American by the World Bank and IMF, or in Spain and Greece by the EU, or to question the war on drugs when you come up against UN sanctions (read US sanctions).

What is the version of capitalism expounded by the Washington Doctrine? It includes the following:

• Privatise everything, for example charge fees for University education.

• Deregulate everything - because regulation hinders making profits.

• Remove the welfare state - it does not benefit the wealthy.

• Allow money to be made from things which carry no value whatsoever - for example sub prime mortgages.

• Put profits above the environment.

• Put profits above exploitation.

• Believe that wealth trickles down.

• Accept suffering of the weak.

This is a version of the world where you believe that there is no such thing as society, where you believe that everyone gets what they deserve, where you believe that if you work hard you can be wealthy and you want to be wealthy, whether that's from inventing the iPhone, a cure for cancer, or from being an Instagram influencer. Where you believe that your only fans account makes you an entrepreneur doing something of real value because there is value in you making money and the ethics or personal long term damage to you of making that money doesn't matter, where you listen to the banking and financial sector when they claim to be doing something of value for society. In the final version you'd privatise the NHS or other underfunded Government services like the DVLA, or Trading Standards, things that provide valuable services for society, but which are not profit making.

If this version of capitalism is working then there is no need to change. We are told that the market is perfect and will solve everything. As the pendulum has been swinging towards this since the 1960’s, we’ve had 50 years to make this version of capitalism a success, a good length of time, so we can judge it on its successes and confirm this by asking:

• Have we reduced income disparity in the UK, reducing the gap between the richest and poorest?

• Is home ownership a realistic possibility for Gen Z after a few years of working?

• Has this version of capitalism averted a global climate crisis?

• Are there any areas of the country that are literally impossible for you to ever live in As they are reserved for the global super wealthy?

• Have we eradicated systemic and institutional racism?

• Paying £9,000 for a degree is far too little, you would prefer to pay the market rate of £50,000+ for a course because thats the market price. Education costs and students are the consumers who should pay for it.

• Do we have a quality media owned by real British people who would never hack the phone of a dead child or racially abuse a new member of the Royal family?

• Has the UK implemented long term strategies for reducing global warming irrespective of what the rest of the world is doing?

• Have we stopped giving substantial tax breaks to organised crime gangs like HSBC and paedophile gangs like the church?

• Have the global UK banks headquartered in London stopped being the money laundering capital of the world ?

• Do our best brains leave University and strive to create value by being an entrepreneur, or do they take up jobs in the City of London described by a Bank of England governor as being largely pointless to society?

• Have we solved homelessness?

• Is the NHS on an endless road of improvement?

• Are you convinced that education and healthcare should only be provided to those who can afford it so that schools and hospitals can focus on making a profit?

• Are you going to be inundated with good quality job offers on leaving University?

• Has the jobs created over the last few decades, been of a high quality, or as drivers or warehouse workers for app companies?

• Has globalisation helped make your opportunities better, at the same time as helping the poorest globally, or has it just been good for a specific few?

Has this system delivered over the last 50 years? If it has, then it will be of benefit to you going forward. In which case, stop reading this, lets keep going as we are as things are clearly going fine.

In my view, its not working, its more broken than any previous version gone before, unless you're a Master, in which case, its the best of times. In my view Laissez-faire is greed capitalism. I can't see anywhere within this where the 99% benefits, and thats the 99% on a UK scale, or even on a global scale. I can't see where a properly funded National health Service fits in with this, or where helping homeless people fits in with this. I can see within this how homelessness is caused as this system causes it. I can see how it creates victims. I can see how it leaves people worse off and disadvantaged, I can see how the number of insecure jobs driving for platform companies or in their warehouses increases, while the number of good quality well paid jobs for the globally better off decrease.

Capitalism Chinese Style

Because we no longer have the cold war and the USSR to compare ourselves against I worry that we have lost direction. We have perverted our version of capitalism as I have explained above. Our alternative now is China, and they are portraying themselves very well. When Trump was in office, the Chinese appeared more statesmanlike in their dealings. And as capitalism fails Generation Z I worry that they will look towards China as a role model. It has already started to happen during lockdown. The lockdown measures in China have been mumbled by people and mentioned in the British press as being better than in the U.K. More in control than our Governments and more effective.

Now I don’t know much about China. I do know that the U.K. doesn’t have the proudest history with China given our colonial behaviour in the Opium Wars. But I do know that the imprisonment of people because of their religious beliefs feels wrong to me. I do believe that harvesting organs from live donors for profit feels wrong to me. I do feel that a society where you earn points for state defined good behaviour feels wrong to me and one which is open to wide spread abuse from higher level corruption and greed by those making decisions. It’s probably another system that could be good if the people were perfect, but people are not perfect.

Whilst I think that our version of capitalism has taken the wrong turn, I still believe that freedom of the individual to act and make choices is the right and ultimately, democracy, real decision making by the lowest individuals in society is the best safeguard against the imperfections of the humans. The Chinese way of controlling thought and ultimately freedom is not something we should want to follow.

Capitalism with Democracy

This is the version of capitalism that we all thought we would end up with after the fall of the berlin wall in 1989, but one which in fact was killed off, with its final breath being taken in 2008 with the banking crash when taxpayers money was used to bail out banks, totally perverting capitalism and essentially saying to casino banker, the more at risk you are, the more money you can get from the poor. Your bankruptcy will never happen. Hardly capitalism!

Capitalism with Democracy means that we live in a market driven capitalist society but one where the values we all share drive the market. Ultimately, this is a better version of capitalism because, as Aristotle was getting at, it will protect the society and also help the weakest, ultimately making the wealthy wealthier, and safer, for longer.

In this version of capitalism, we would encourage free markets with minimal government intervention, we would encourage and promote entrepreneurialism, however, it would be under the supervision of the Government as elected by the people.

It would be one where we are not afraid to have rules to reconnect the pay of the highest within a company to the lowest, with a view to reducing that gap, if that got out of control, as it has done.

It would be one where Corporate Governance rules confirm that profit is important, but equally, the environment, employee welfare and society also has a price and needs to be factored in.

It would be one where we change how we measure things so that its not all about the price or your earnings that measures your value, but childcare, being a mother, being a carer, unpaid jobs like these are valued within our national accounts so that we see things with real value in our national Balance Sheet.

It is one where accounting rules put a price on the damage caused by resource extractors and polluters so that when profit is being measured, that cost, the cost of the death of the future workforce is being factored in.

It is one where the noise from news papers promoting the views of Masters is taken with a pinch of salt and where a negative view is taken as affirmation that perhaps something is going the right way.

People call this shared capitalism, or value capitalism, or even better purpose capitalism. In fact, there are already examples of companies driven by a purpose wider than the pursuit of profits already who are already reaping the benefits of such an approach in terms of higher profits.

Ultimately this capitalism is better for everyone in the longer term, its just not better off for the Masters right now because it confronts their greed right now and seeks to adjust it.

Since the fall of the Berlin Wall and the end of the Cold War, and since the bailing out of the banks, the pendulum has continued to swing away from this form of capitalism. Don't be fooled when people tell you that what we have now is just the way it is. Its not. Things can change and they do change.

But what worries me even more is that perhaps the pendulum hasn’t stopped swinging yet. Perhaps it continues to swing against democracy.

• What if the Government was making moves to start restricting our right to protest?

• What if the Government took steps to disenfranchise voters by demanding they show ID at polling stations, something which has never been necessary and which will solve a problem which does not exist.

• What if we had a first past the post system of Government which keeps a single party in power despite the actual make up of the countries voting habits?

• Where money goes from the Government to its friends unchecked and without real challenge.

• Where we decorate MPs home and MPs just brush it off as unnecessary noise.

If the pendulum is still swinging, we are in trouble.

Milton Freidman inspired Gordon Gekko to say “Greed is good”. I have nothing against capitalism, its a good system, better than others, but this view promoted by Friedman is only half right.

In my view, Greed is good... but in the long run, generosity is better.