Don’t get me wrong, I am an ardent capitalist, but even I must concede that socialism has an enduring popularity.
If you think as I do then you know that markets are just so damn great. There’s actually nothing that creates wealth, prosperity, and riches faster. There are only four things that create wealth: economic growth, family distribution, mutualistic societies, and charity. But the last three don’t even come close to the economic growth only markets can create. The free-er markets are — the better! Though even distorted markets still work (albeit not as well). Like cocaine, markets are irrepressible. It’s estimated that roughly 10–15% of the Soviet Union’s GDP was thanks to the black market. Markets are the single greatest force for poverty reduction the world has ever seen. And yet, defending markets on ideological grounds is not even remotely popular or common. Occasionally I’ll see markets defended in the mainstream media on pragmatic grounds, but even that’s rare.
This is not an article about capitalism or socialism. This is an article about the human condition.
Humans crave a system that rewards morality. What we have is a system that rewards aptitude. If tomorrow you were admitted to ER and needed surgery, would you prefer a moral surgeon or a competent surgeon? Let’s assume one precludes the other. The moral surgeon will botch the surgeon and kill you if he does it. The competent surgeon will save your life, but every night he goes home and beats his wife. Most people would choose the competent surgeon over the moral surgeon in these circumstances, even if they had knowledge of the former’s wife-beating tendancies. In reality the competent surgeon would get picked a hundred per cent of the time because we don’t know the morality of everyone we deal with in a professional context. I needed a minor surgery recently, and I met my surgeon before hand. Since I only engaged with my surgeon on a professional level, I was never in a position to judge my surgeon’s personal morality even if I had an objective test for a person’s morality. So the only things I could judge my surgeon on were his credentials, experience and aptitude of which he possessed a great deal of all three.
We want a system that rewards morality. We need a system that rewards and incentivises aptitude.
Markets are not inherently moral or immoral, rather they are morality blind. Markets create a world where a competent arms dealer and a world class surgeon can both be extremely wealthy. If morals are shades of grey, markets see only black and white. Humanity seems to want an impossible thing: a system that rewards morality, and somewhat perversely, they want it so badly that so many people will overlook all the inherent wickedness and coerciveness of socialist regimes because those systems began with the noble intention to build a world where everyone gets what they deserve. Socialists are generally perceived as having more empathy for the poor than capitalists regardless of the lot of the poor in socialist countries. Humanity then decries the evils of capitalism despite all the prosperity that capitalistic societies enjoy because markets incentivise individuals to become better at what they do to improve their own lives, but not to become better people. Exceptions to this rule are those who adhere to belief systems where material wealth is linked to human goodness, and out capitalists like myself.
This all amounts to an endearing, but ultimately deeply tragic statement on the human condition. I wholeheartedly understand the desire to live in a world where morality is rewarded, but I can offer no succour. If one’s morality is rewarded in this life (or the next), it is rewarded by something other than riches. At the end of the day, actions speak louder than intentions, and markets cater to needs before they cater to wants. In the end socialism caters to neither.
What do rich people have that poor people don’t? I imagine that ‘money’ is the first answer that comes into your mind. Well, yes, but let’s break this down. What does money give you? It gives you choice.
Farmers began co-ops in the mid-19th century because they were being sold expensive, rotten food by private food sellers. Because co-ops were providing better produce at cheaper rates, other private food sellers had to up their game. Farming co-ops weren’t non-profits; they were a different type of capitalism. The free-market doesn’t just mean the consumer wins because they have a choice of products to buy; they have a choice between outlets which are structured differently. Different forms of capitalism competed to create better capitalism.
At the time of the financial crisis, I remember seeing very little analysis about how the Co-operative Bank fared in comparison to it’s shareholder counterparts (although, to be fair, the Co-operative bank is not a true democratic co-operative). If we had a greater mix of co-operative banks and shareheld banks, with co-operative banks being perceived as being more ethical – the theory goes that a greater amount of customers choosing to bank cooperatively would signal to the shareheld banks that they wanted more ethical banking. The shareheld banks would have to get more ethical in order to compete. On the other hand, if a greater number of consumers perceived the shareheld banks as more efficient/cheaper, the co-operative banks would have to get more efficient/cheaper in order to compete. Thus, the pendulum would swing, increasing the efficiency, cheapness and the ethical credentials of banking.
What I’m arguing for is a greater plurality in the structures we interact with. In order for this to come about the State must recede. The main argument against greater marketisation of public services is the perception of capitalism as being unethical. A greater plurality could mean adding a dimension to capitalism that means organisations/outlets have to compete with each other on grounds of their ethical credentials as well as with prices, quality and providing shareholders with dividends. Most people don’t think about this dynamic between capitalist organisations when they think of the free-market.
The sector I fear for most is education. Classrooms don’t look that much different than they did in the 1930s. Even though almost every other area of our lives have changed our schools still look the same. Children don’t all learn the same, but we teach them all the same. Education does not seem to be moving with the times at all. I know no one who makes their living as a fine artist. I know a great deal who make their living using Adobe Creative Suite. Yet, I was taught fine art in school and I was not taught how to work any part of the Adobe Creative Suite.
Ultimately this rot is due to a lack of plurality ergo a lack of incentive to change and innovate. In my ideal world there would be three different types of school structure – schools run by private shareholder capitalist companies, schools run by cooperatively owned capitalist companies and schools run by private charities/non-profits. There would also be three types of funding – private funds, charitable donation and government vouchers. Vouchers give poor people what rich have. Choice. Were this the case education would look different in a very short period of time and unrecognisable after a long period.
This lack of choice is precisely why social democracy sucks. It sucks flexibility and plurality out of the system. The NHS, state schools and other public services are as good as they’re going to get. If that’s good enough for you, fine. But it may not be good enough in 50 years time. Changes in structure and competition change the game for the better, both ethically and efficiently. Embrace it.