‘Modern capitalism, I am regularly told, will be the death of us.’ So columnist Tom Eaton began a recent column, one which illustrates an idea that has become one of the clichés in the political discourse of the Left: the evils of capitalism.
He goes on to say that ‘… billionaires have profited enormously from a global pandemic, and … the rest of us are praying that the world’s factories will soon return to full capacity, making plastic whatsits that nobody needs so that imaginary wealth can keep being juggled by the ‘richest’ nations’, adding that ‘I can’t help feeling that capitalism, at least in its current form, is pretty terrible.’
Eaton is not alone in displaying a fairly shallow and contemptible view of the capitalist West, untempered by analysis. The reality is that though billionaires may profit from the pandemic, that’s generally because they successfully produce what people need or want.
Jeff Bizos of Amazon is an extraordinarily rich man, but in the time of the pandemic his core business, the online provision of goods, was particularly apt.
Eaton implies, as do so many of the West’s dog-in-the-manger Left, that great wealth is built only through the deprivation of the poor. This is an archaic stereotype. Yes, there are still companies exploiting labour in the Third World and maybe they should be shamed for it, but there is also the desperation to make some kind of living in that Third World that needs to be understood. If a socialist government was exploiting the same people it would be worse.
People like Jeff Bizos, Mark Zuckerberg and Elon Musk made their money through some luck, invention, a lot of hard work and a preparedness to fail. We know nothing about the far more numerous failures, so we criticise the successes. Success of this type is extremely rare.
The bottom line is that, in 2020, in countries where the rule of law applies, the wealth gap is not a result of depriving the poor. The Left’s being offended by ‘inequality’ is an instinctive, moral distaste.
Yet, what these obscenely rich people do is create employment, direct and indirect. It is their taxes and their philanthropy that make a difference to inequality and poverty.
Eaton says ‘we must, surely, be capable of figuring out a system that doesn’t require large numbers of people to be very poor so that a small number can be very rich?’
Wealth creation is not a zero-sum game
Shibboleth upon shibboleth – the very wealthy don’t deprive the poor. A Facebook or an Uber provides jobs and creates wealth. If wealth creators like these didn’t exist, there wouldn’t necessarily be alternatives to them. Wealth creation is not a zero-sum game.
Capitalism is not a fixed ‘system’; it is adaptable and capable of correction. It is not perfect but it provides opportunities for people to be who they are and do what they can and want to.
Eaton does concede that an alternative to ‘capitalism’ hasn’t been found. Command economies, as hankered after by the African National Congress (ANC), do not create wealth; it is in the nature of government control that innovation and entrepreneurship are stifled.
The alternative is spelled out clearly in the latest report from the IRR, Growth & Recovery: A Strategy to #GetSAWorking. It examines the weakness of the ‘fundamentally centralising, collectivist and redistributive’ ideological approach of the ANC and the benefits of ‘putting decision-making power closer to where those decisions have an impact; ideally, in the hands of individuals’.
Another thought to conjure with: capitalist societies often have a considerable philanthropic ethos. And they are generally motivated by a sense of humanity. Bill Gates is a prime example. American society is very philanthropic. Within severe constraints, South Africans are philanthropic and caring.
Eaton naïvely says ‘I’m afraid I’m going to keep my head down and keep doing what I’ve been doing. I am aware that this makes me complicit in inequality and injustice. I know that, simply by living my life in this decade of this century, I am an investor in the burning of rainforests and waste of human potential.’
Equality of opportunity
Eaton would be contributing to inequality and injustice on a much larger scale if we lived in a society shaped by the socialist ideal of equality of outcomes rather than the capitalist ideal of equality of opportunity. Socialism has failed because of its obvious and inherent contradictions. Eaton should know this. Capitalism is not eating the world. Environmental degradation is a crisis in Asia, Africa and parts of South America – not Europe and America.
A current example of private sector efficiency is evident in Anton Rupert’s R1 billion Sukuma Fund, which aids businesses affected by the lockdown. A woman applied for relief from the fund on a Tuesday evening. Early on Wednesday morning, she received acknowledgment of her application and approval for it. By Thursday morning the grant was in her bank account.
In contrast, the inefficiency and widespread ineffectiveness of state-led initiatives are the very qualities that have driven our decline, creating – as the IRR’s Growth and Strategy report puts it – ‘a feeling of despondency and helplessness in the face of what appears to be an inexorable slide towards ever greater immiseration and hopelessness’.
And checking this slide, it argues, ‘requires action: a fundamental shift towards greater individual freedom, along with a removal of the impediments to growth and investment’.
[Picture: Gino Crescoli from Pixabay]
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