Cooking the Books: Capitalism is irredeemable (2020)

The Cooking the Books column from the March 2020 issue of the Socialist Standard

‘Corbyn’s defeat won’t end the debate about capitalism’ wrote the editor of City AM (10 January) commenting on a report entitled ‘The Crisis of Capitalism’ by William Wright who runs a think-tank, New Financial, that puts out propaganda in favour of private enterprise and so-called ‘free’ market capitalism, his rather narrow definition of the term.

In his report Wright claims that ‘Jeremy Corbyn, Bernie Sanders, Elizabeth Warren and millions of their political supporters want to turn capitalism on its head’, adding ‘Capitalism, it seems, is in crisis.’

So, it’s a crisis of legitimacy not an economic crisis that he is talking about. It is true that millions of people in the US, Britain and elsewhere are dissatisfied with the way capitalism is working and want something done about it. Hence the popularity of politicians like Corbyn and Sanders amongst a minority of the population. But to claim these politicians want to overthrow capitalism is going way beyond the evidence. What they want is to reform capitalism, with more government intervention than Wright would like. Warren even openly admits that she wants to reform, in fact save, capitalism. The other two talk of ‘socialism’ but mean a more state-regulated capitalism.

City AM’s editor made a fool of himself when he wrote that ‘Labour’s ideological error was to insist that the system’s vagaries, contradictions and flaws are proof of its irredeemable inadequacies.’ Labour has never claimed that capitalism is irredeemable; on the contrary they have always claimed – and did in their manifesto for the December general election which envisaged the continuation of a dominant private sector – that the profit system can be reformed so as to work in the interests of the many. But it can’t, as the failure of all Labour and other reformist governments has consistently shown.

Wright lists ten reasons why he thinks his version of capitalism has become unpopular with so many people. Basically, he attributes it to increased inequalities of various sorts (as between generations, regions, types of job contracts, as well the rich getting richer). According to him, ‘the relentless pursuit of profit’ in favour only of shareholders over the past 50 years has meant that ‘workers feel expendable, suppliers are beaten into submission on price, and consumers often feel exploited.’ Further, the increase in ‘market power and concentration’ has had the result that ‘large firms become more powerful and monopolistic, stifling competition and undermining the wider benefits of capitalism to consumers.’ Big business acts as if ‘it doesn’t have to play by the same rules, such as paying tax’, so, with governments going along with this, ‘creating an uneven playing field between large and smaller companies – and between capitalism and consumers.’

This seems a fair list of why Wright’s variety of capitalism has become unpopular, but there’s not much that governments can do about it. They can make Amazon and the others pay more tax and bring in some laws against consumers being swindled. But private enterprises can’t be prevented from relentlessly pursuing profit for their owners. Nor can the concentration of capital into larger and larger units be reversed. These are not ‘vagaries’ or ‘flaws’ of capitalism, but are built-in – irredeemable—features of the system.