A few years ago it would have been considered
impossible that either the SNP would win 56 seats in Scotland or that Jeremy
Corbyn would one day lead the Labour party. If I had been able to place a bet
on this combination of events happening what sort of odds might I have
obtained? I’d, no doubt, have been able to retire on a ten pound bet. Yet
somehow both these events have occurred in the same year. This year. What’s
going on?
I’ve tried to keep this blog reasonably impartial
with regard to Labour, the Lib Dems and the Conservatives. This is not least
because I’ve voted for each of these parties at one time or another. I thought
the country needed change in 1997 and so I voted for Blair. I may well have
done so a second time. I voted this year for the Lib Dems in Gordon, not only
to keep out Alex Salmond, but because I thought they did a good job in
coalition. I’m not one of those Scots who uses the word “Tory” as an insult,
because, Judas that I am, I preferred Thatcher to Michael Foot in 1983.
Mainstream UK politics has always been rational. There
is a sensible debate to be had about what works best economically. Reasonable
people can disagree about how best to regulate free market capitalism. I would like the markets to work for everyone,
so that each of us has a reasonable chance of sharing in the wealth of our
country. Even if I accept that pure laissez faire capitalism would be best
for economic growth, I’m not sure that I want to live in the society that this
would create. After all, the Wild West was dangerous for everyone.
The reality however in the UK is that no major party
is offering anything approaching pure right wing economics. The Conservatives are
not even letting the market determine wages. Rather they prefer to steal a policy
from Labour’s last manifesto and introduce a living wage. They are trying to
prevent the inexorable growth of spending on benefits, but this would be the
job of any sensible party in power. Balancing the books should not be
considered right wing. Rather it’s mainstream, centrist politics. The reality
is that the Conservatives are somewhat to the left of the Democrats in the
United States. They support state spending to an extent that is contrary to
true free market economics. If there are voices in the Conservative party that
wish to cut state spending to 20% of GDP, I haven’t heard them. But such a voice
from the margins would be the Conservative equivalent of Jeremy Corbyn.
Given an ideal world and the chance to do everything
that he would like, what percentage of GDP would Jeremy Corbyn like the state
to spend? Well true socialism would require approximately all of GDP to be made
up of state spending. Socialism is not what the Labour party has been campaigning
for since Neil Kinnock began his programme of reform and modernisation. The big
ideological change that Labour made that culminated with Blair was that
capitalism was the only game in town, but that it could be better regulated to
benefit everyone. This is usually called social democracy. There are sensible
countries where this form of government works rather well. Again there is a mainstream debate to be had about how we can make economics work for
everyone, so that no-one is left out. But let’s be clear. This is not a debate
about socialism. It’s a debate about
regulating capitalism.
What’s the defining characteristic of socialism? In
my view it’s the idea that what matters most is eradicating inequality. For a
socialist it’s fundamentally offensive that some people earn millions while
others earn hardly anything. Their aim is to eradicate this inequality. I think
this is fundamentally the wrong approach. It ends up with not only the rich
being poorer, but the poor being poorer. It is simply contrary to human nature
to try to eradicate inequality. To do so leads to poverty, because the
motivation people have to create wealth is either to raise themselves up from
being relatively poor or to extend the gap between themselves and someone else.
If everyone in the UK earned £15,000 pounds a year whether they were a company
director or on unemployment benefit, why would anyone strive for success?
If we all lived on a tropical island where all we needed to
do was to pick fruit from the trees in order to live in perfect contentment, we
would be in something close to a socialist paradise. There would be no
inequality. We would all have equal access to the fruit. But there would be no
progress either. We would remain stuck in our perfect equality just as if we
had never left the Garden of Eden. Progress, economic growth and everything our
society has created in the past centuries is because of our fallen nature.
Trying to eradicate inequality is trying to bring man back to his state of
nature. It is Utopian and like all Utopian ideas can only happen by means of
coercion.
Let’s imagine a company director earning £200,000 a
year, while his next door neighbour lives on unemployment and housing benefit. Let’s
say this person is paid £10,000 per year. This is a great inequality. How do we reduce
it? Well we could tax the company director and pay more benefits to his
neighbour. But the rich person might naturally reflect that if a thief came
into his house and stole half his earnings he would be prosecuted, but if a government
does so they are praised for being socialists. He might try to take steps to
avoid this government taking his money. How could he do so? He could move
elsewhere to place that doesn’t want to bring him down to the level of someone
who doesn’t work at all. How could he be prevented from doing so? Well Mr
Corbyn could introduce a law that prevented rich people from travelling and he
could introduce capital controls preventing rich people sending money abroad. It
is in this way that socialism inevitably begins to damage freedom. We’ve known
since 1991 that given the choice between state socialism and capitalism, people
will vote with their feet. The Berlin Wall was the condition for the
possibility of socialism.
Let’s say we have succeeded in taxing all the
company directors so that they earn no more than the average. Let’s say that we pay everyone more or less
the same whatever they do. What sort of effect will this have on our economy?
What incentive would I have to start a company and run it well? None at all. Moreover why even sweep roads, when I can go to the doctor and describe some non-visible
symptoms that prevent me from doing so? The trouble with socialism is that it
causes the economy to stagnate. Eventually even the poorest person ends up
receiving in benefits far less than he would have done with the capitalist
model.
This is easy to illustrate. People on benefits in
the UK earn far more than people who work in Eastern Europe. This is precisely
because those countries tried to eradicate inequality.
It is time to recognise that capitalism depends on
inequality. Inequality is not a fault. It’s a feature. What matters moreover is
not trying to change human nature to such an extent that we can get rid of inequality.
This can only happen anyway with some sort of re-education programme that will
fail, but at huge human cost. What matters is gradually striving to raise the
standard of living of everyone.
Free market capitalism has raised the average
standard of living in the UK to such an extent that someone who doesn’t work is
far better off than someone who did work fifty years ago. The standard of
living of someone who receives the living wage will be such that they will be
able to do things that were way beyond the reach of their grandfathers. So long
as I earn enough to live comfortably I couldn’t care less that someone else
earns millions. Rather I’m grateful to such a person for the fact that his
taxes improve my standard of living.
There is some sort of mass hysteria going on in the
UK, but it has the same root. In Scotland the left sees nationalism as their
path to a socialist paradise. This has now spread southwards so that the Labour
party has elected someone who likewise wants to create a socialist paradise. I’ve
lived in a socialist paradise. It was called the Union of Soviet Socialist Republics. Don't try to tell me it wasn't socialism. Really you don’t want to go down this route. If
you didn’t work, if you were found out on the streets during working hours, you
were liable to be sent to a psychiatric hospital. The streets were paved with re-education. If you think Tories are
heartless, you should try socialists.
