The problem is not all is well in the land of the free market, despite the rosy picture painted by rising GDP figures. Capitalism has stopped functioning as it was supposed to. Rather than being a model to deliver as much choice to as many consumers at the lowest price, it has become a means by which wealth is transferred to those who already have a lot of it. What we now have is not an economic system which encourages small business and innovation, but instead the buying up of as many assets as possible by a few oligarchs. Ordinary people are not seeing the benefits of hard work. The rich are just seeing the benefits of being rich.
A generation or two ago, in the post-war boom, it was eminently possible for working-class people to attain middle-class, home-owning prosperity as a result of working hard. Many thousands did. For young people today, social mobility is a cruel myth.
Now, your ultimate status is more likely to be determined by how wealthy your parents were. Everything from the school you will attend or how healthy a child you will be will is simply a matter of money now as the safety net of the welfare state is gradually dismantled. If you’re from a privileged background, you’ll get an easy pass into top flight universities, and then your parents can bankroll increasingly important unpaid internships before you can start earning for yourself. Even after that, they will have to keep supplementing your rent due to how low wages are and if you live in London they will need to buy you a house if there is to be any chance of you owning your own property. If your parents cannot afford any of this, you are doomed to life of uncertainty and low paid jobs. If they can, then you will become rich and you will be in a position to help your own children get a head start in life. If this process continues after a few generations we will not have a class divide but the economic equivalent of Apartheid.
All of this is a result of our obsession with using the free market to make the allocation of resources more efficient. Sometimes with good intensions - and sometimes with a pernicious hatred of the poor or anything that is free - governments have let the ideology of neoliberal capitalism invade social systems which are supposed to prevent excessive wealth transfer to the few. The belief that we will all be better off with more capitalism has simply moved wealth up the social pyramid into the hands of the rich where it stays.
This should worry those of us on the left. Tony Benn warned about the dangers of unelected power and no one is less accountable than the global uber-wealthy. However this should also worry the Right, as we now have a crisis in capitalism. In the 1980s the Conservatives were the party of the small business owner, the entrepreneur, the working class person who wanted to increase their economic standing. Now they are the party of the billionaire, the vested interest and the wealthy, elderly English country gentleman – or at least that is how it is perceived. People no longer see capitalism as game that rewards hard work and clever thinking but as a competition that is fixed from the beginning.
At the top of the pyramid will be the children of billionaires who will never have to work for a penny. They will enjoy a life beyond anything we can imagine while the rest of us work harder to attain the most basic comforts. It hardly seems fair that some people can have so much through so little work under an economic system which is supposed to reward hard work. This is what capitalism has become. Meanwhile the environment suffers, equality suffers, social harmony suffers but no one is stirred into action to address the source of this problem.
The crisis in capitalism affects us all (I am assuming no oligarchs are reading this) and addressing this problem should be the centre of our politics. The fix to our broken capitalism is to dial it back. The answer is not a soviet-style centralised economy, but a balanced economy where some goods are allocated by the free market and some are evenly distributed. The basic starting position for the capitalist competition needs to be made fairer. This means an equal distribution of food, clothing and quality school places for children. It means controls on housing, healthcare and University places so that no-one is given an unfair advantage over anyone else. The place for the free market should be for non-essential consumer luxuries which allow us to express our individualism and avoid the grim uniformity of Maoism.
The fix to broken capitalism is to stop holding the free market on high as a perfectly functioning economic model that will always deliver the best outcome; the only other people who believed so strongly in the infallibility of their economics were the Soviets, and it led to their ruin. It begins with simple things like not encouraging unnecessarily competitive behavior in children, and listening to legitimate criticism of where capitalism does not work. It also means not appropriating the starkest warnings against the dangers of unbridled capitalism as arguments in favor of the free market – as Boris Johnson did.
Capitalism has dented the Left by invading every area of life. However, acknowledging that capitalism is broken and striving to correct this will breathe new life into the Left. It hasn’t won – in many ways it isn’t even working. Just as the crisis of capitalism is the root cause of society’s problems, it should be the basis for our politics too.