The use of the word capitalism always raises a wry smile from me on a good day, a snarl of anger on a bad one. Let us start with the Oxford dictionary definition "An economic and political system in which a country's trade and industry are controlled by private owners for profit rather than the state". This short essay is directed at Guardian rustlers, BBC presenters and producers, (ok so they are the same beasts), spoilt middle class children pretending to live in a tent outside St Paul's and finally the dumbed down economics faculties in educational establishments all over Europe and North America.
The one thing we do not have, have not had for nearly 100 years is capitalism. Post war Hong Kong came pretty close but I know of nowhere else. For the purpose of brevity I will restrict my argument to the United Kingdom. What we have is statism. Years ago in any economic exam paper it would probably be referred to as mercantilism. There is a strong case for calling it neo-socialism, we do not, repeat not have capitalism.
Fifty percent of GDP is spent by government. This astonishing figure immediately defeats any possible argument that we live in a capitalist society. Almost everything is run by government or quasi government organizations. Much of it happened by stealth. The gradual de-nationalization of industries was replaced with an expensive array of government sponsored quangoes quite deliberately set up to enable government to continue control but in the style of back seat driving.
The primary responsibility is no longer to the enterprise shareholder in the modern UK. Indeed the shareholder comes fairly far down the list, as any share portfolio holder will glumly tell you. The FTSE for example is at exactly the same level now as it was fourteen years ago, and in a significantly devalued currency, hardly the mark of a capitalist society. The first duty of industry is to compliance with government regulation, Brussels or Whitehall, it makes no matter. In financial services government stooges, lay folk always, in exchange for huge salaries, pensions and honours have complete and total domain. They interpret their own impenetrable rule book, adjudicate on it, assess their own fines, keep the fine and there is no serious appeal procedure, certainly none within the principles of English law. No presumption of innocence, trial by jury or open public accountability. Indeed secrecy is the mainstay of the procedure. The directors and employees therefore have their primary duty based on compliance. Not the shareholder or indeed even the customer. The Treasury in the shape of Mr Hoban are actually legislating on the remuneration of financial service companies this year. So there is no liberty of contract. Nor is there liberty of contract in employment. The government sets minimum wages, holidays, maternity and paternity leave, ordinary leave, pension arrangements and shadowy legislation based on 'discrimination'. As if we did not discriminate in absolutely every other aspect of our lives. Between tea or coffee for breakfast, jam or honey for tea or even Jane or Sally as a life partner.
The farmer's life is dominated by DEFRA, the factory by 'elf and safety, the restaurant by so many people at the Town Hall they are impossible to count. All of this, is of course, claimed by this public sector rentier class as being in our own interest. Caveat emptor is abandoned we are considered by the bureaucratic and political class to be too stupid to do anything for ourselves. Energy, agricultural, fishery, employment policy is all governed from Brussels. Whitehall controls the education and health services, and pretty incompetently too. Divide the number of qualified health workers or teachers into the annual budget and try and find out where the money goes. We have more administrators in hospitals than beds, more civil servants at the MOD than soldiers. We have nationalized the banks with tax payers' money. The government begs, borrows, steals and counterfeits billions of pounds every year. We are leaving our grandchildren with public debt too big for them to even comprehend. The public service broadcasters are selected by the government, so are the directors of the Bank of England and the Confederation of British Industry. Such gains an investor makes are hit with capital gains tax, the dividends hit with income tax, the companies themselves clobbered with corporation tax.
The examples of statism are almost limitless. But whatever it is it is not capitalism. So capitalism has not 'failed' because we never tried it.