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The trouble with global capitalism

05 February 2016

Angela Tilby bemoans the state of modern capitalism

SOMETHING has gone wrong with global capitalism. That is the conclusion not only of those who believe that capitalism is inherently immoral, but increasingly of those who believe in its virtues. There are plenty of reasons for disillusionment.

There is Google, with its derisory contribution to British taxes; Tesco, which is accused of blackmailing its suppliers and cheating them of payment; the corporate selling on of debt for vast profits from sub-prime mortgages that led to the crash in 2008, recently described as a giant Ponzi scheme (one that pays investors out of new capital with no real wealth behind it).

New technology and automation is taking away jobs and fuelling massive inequality of income between the very rich, who hold the capital, and the poor (let alone the rest of us in the middle). All this suggests that the well-documented ability of capitalism to generate greater prosperity and well-being for all may be grinding to a halt.

Capitalism has drifted a long way from its roots in the economic theories that came from Enlightenment thinking. Originally, capitalism was linked to the enlightenment charter of personal liberty: the freedom to advance one’s own interests by providing goods or services to others. Competition and free markets were intended to work for the common good by allowing choice and driving down prices.

Global capitalism does not work like this now. It encourages monopolistic practices (who doesn’t want to use Google?), limiting freedom and choice, and disenfranchising the majority, while creating a powerful global elite, beyond the scrutiny of national governments. The contradictions are all too clear, and are provoking an unexpected rebellion from conservative politicians, right-wing journalists, and workers in the financial sector.

While the advocates of capitalism wring their hands, the old Communists have rushed to adopt it. Neither Russia nor China has any interest in the link between enterprise and personal and political freedom.

China is cheerfully dumping its cheap steel on the world, and taking away British jobs. China wants happy consumers, but does not want them to be free to say what they like. Russia still attempts to hold Europe to ransom over gas; but Russian capitalism seems to be in the grip of a cartel of thieves with suspicious links to the President.

Freedom cuts both ways, and Western nations need to generate reforms of the system which restore credibility and fairness. This will never come from the ideological Left, who remain suspicious of personal freedom. But the Right must keep up the pressure: all our futures depend on it.

 

The Revd Angela Tilby is Diocesan Canon of Christ Church, Oxford, and Continuing Ministerial Development Adviser for the diocese of Oxford.

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