Cooking the Books: Capitalism in Action

In a speech in January David Cameron talked about using “this crisis in capitalism to improve markets, not undermine them”. At least he admits that capitalism does have crises, which is progress compared to the previous Prime Minister. He said he wanted “these difficult economic times” to “lead to a socially responsible and genuinely popular capitalism. One in which the power of the market and the obligations of responsibility come together. One in which we improve the market by making it fair as well as free, and in which many more people get a stake in the economy and share in the rewards of success. That’s the vision of a better, more worthwhile economy that we’re building”.

By “a socially responsible capitalism” and a “fair market” all he seems to mean is that the top executives of capitalist corporations don’t line their pockets so much, while everything else goes on as before, with profits coming before people and market forces enforcing the economic laws “no profit, no production” and “can’t pay, can’t have”. More a nightmare than a vision.

He went on:
“We are the party that understands how to make capitalism work … Because we get the free market we know its failings as well as its strengths. No true Conservative has a naïve belief that all politics has to do is step back and let capitalism rip. We know there is every difference in the world between a market that works and one that does not.”

It would be interesting to know what he thinks the market’s failings are. But he didn’t say. Nor did he elaborate on how he was going “to make capitalism work”. He can’t have been claiming like Gordon Brown to be able to make it work without it leading to other economic crises in the future. No politician dares do this now.

But, then, why does he not come out and say that there will always be crises from time to time under capitalism as that’s the way it works, as many other open supporters of capitalism have done? Such as HSBC chief economist, Stephen King, who has written of “capitalism’s inherent instability” (Times, 7 February). Or Times columnist (and former Tony Blair speechwriter) Philip Collins who has commended to Ed Miliband’s attention Marx’s “picture of capitalism as creative, destructive, radical, disruptive and prone to cycles of boom and bust” (Times, 7 January).

Or Tory grandee William Rees-Mogg stating that “no theory can stop recurrent boom and bust” (Times, 22 September 2008). Or the Times whose editorial (17 September 2008) observed after the collapse of Lehman Brothers that the “profitable parts of the business will find a new home and the weaker parts closed down. This is painful and worrying but the opposite of a disaster. It might be brutal and unforgiving but this is how capitalism works. The market ensures that those who make mistakes are accountable for them. What critics are too hasty to see as capitalism in crisis is, in fact, capitalism in action”.

Falling living standards and cuts to social amenities, needed in a crisis to help restore the profitability that drives capitalism, are equally brutal and unforgiving but that’s how capitalism works. Yes indeed, his is the “party that understands how to make capitalism work”. And, no, it doesn’t believe in just stepping back and letting capitalism rip. It believes in intervening, as at present, to help let capitalism rip.