Tuesday, February 20, 2024
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Capitalism? If only!


BORIS Johnson has claimed that the success of Britain’s Covid vaccine programme is due to ‘greed and capitalism’. As shadow chancellor, John McDonnell said his intention was ‘to overthrow capitalism’. Fair enough – he is a Labour man with a right to his views, as we all have. But how about this?

‘A creeping sense of hostility to business’ has taken hold in the Conservative Party, says George Freeman, former head of Downing Street’s policy unit. This hostility is not ‘creeping’, George; under Johnson and Sunak it is galloping with giveaways galore and a magic money tree in every back garden. The distressing fact is that we don’t need a socialist opposition in this country, for we already have a socialist government. This Tory government’s economic profligacy makes the splurges once promised by the Marxist Jeremy Corbyn look parsimonious.

If you read the papers and listen to the BBC, you’d think that Britain is a satanic outpost of capitalism red in tooth and claw, with widows begging in the streets and orphans sold into slavery. In fact we live in a socialist state masquerading as a Conservative administration. Here are some facts:

Nearly 50 per cent of Britain’s GDP goes to the public sector. In so-called communist China it is only 17 per cent. At the height of their totalitarian tyranny, the Soviets were spending only 10 per cent more than we do today. You are taxed on your wages. Then you pay 23 per cent – temporarily reduced to 21 per cent – VAT on nearly everything you buy with the money on which you have already been taxed.

Fuel taxes are at an outrageously high level. If we have a car we pay road tax. If we drink or smoke, the price of our pints and fags is artificially inflated by taxation. Governments ask people to save, so to reduce the burden of taxation. But the prudent who do save are paid little or no interest. In fact, with rates as low as they are, savers – especially among the older generation – are actually losing money by their thrift. If we do save, we are taxed again on the meagre interest.

If we do our bit by buying shares in British companies, we are taxed on our dividends. There are further taxes on share dealing. The state broadcasting propaganda department fiercely polices an annual tax called the TV licence. The industrial, commercial, financial and manufacturing companies which generate income for the country pay large sums in business taxes. (Of course, an outfit such as Amazon is big enough and unscrupulous enough to elude any tax regime and so gets away with £billions – your £billions and mine.) And, in the form of inheritance tax, we have to pay up again even when we’re dead. British businesses which ought to be leading our economic recovery are prevented by labyrinthine corporate and state regulation.

Is this what Mr Johnson calls ‘capitalism’? These levels of taxation and regulation are combining to hinder the economic recovery we need to get us out of the decline produced by the government’s reaction to Covid. And such taxes are required only because the government needs to pay for its army of civil servants, its quango mountain, its legions of useless box-tickers, its lousy education system, the failing and extravagant NHS and its bloated state welfarism. Then there are the howling protests against ‘the cuts’. The truth is that this government will be borrowing and spending more when it leaves office than it did when it came in. Whatever economic and social system is currently being operated in our country, it is not by any shadow of meaning capitalist.

And yet the Prime Minister and his Chancellor play adolescent politics and talk as if we are living at the height of the industrial 19th century, with boys shoved up chimneys and girls driven to prostitution. Then we see the nation’s largest wealth creators, the City of London business and finance houses, traduced and reviled daily.

Its critics accuse capitalism wherever it is practised of increasing unethical inequalities. This is not true. Generally speaking, those nations which have hitched their economic bandwagon to free competition are lifting their people out of poverty. What emerging economies need is not aid – poor people in rich countries giving money to corrupt rich people in poor countries – but free trade. Africa could feed not only itself but half the world – Europe in particular – if its agricultural producers were paid the market price for their crops. But they are not. Instead, food prices are kept artificially high by huge subsidies to EU farmers under its Common Agricultural Policy.

Socialism has never worked anywhere: where it is practised moderately, it impoverishes the people; where it is practised thoroughly, it leads to the erosion of freedom, the gulag and genocide.

The road to prosperity rather than to serfdom remains what it has always been: the policies of political and economic freedom – low taxes and a light touch when it comes to business regulation – coupled with strong national institutions. This creates the necessary framework for the generation of wealth and a fair taxation system which provides that just redistribution of resources which all parties say they desire. This is the only sort of freedom which is genuine – because it is rooted in practicalities and not in theories about rights and abstract notions of ‘equality’.

There is a further important ingredient about which we hear little from Conservative politicians these days. This is the much-despised practice of charity. I say not the idea of charity but the practice of charity. Historically, a great proportion of the wealthy have looked for good causes upon which to spend at least some of their wealth. The centuries since industrialisation have produced philanthropists by the hundreds. But charity has a longer pedigree even than this, having its origin in the gospel itself – a fact to which we might wish our senior churchmen would pay more attention.

I can speak from personal experience as a City priest of fourteen years, for part of that time as Chaplain to the Stock Exchange and to half a dozen livery companies. It was the Church and these ancient companies and guilds which built the parish churches, founded hospitals and schools and delivered so many from hardship and deprivation. This would have been impossible without the conditions provided by the free market. If that is capitalism, bring it on.

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Peter Mullen
Peter Mullen
Peter Mullen is a Church of England clergyman, writer and broadcaster

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