CAPITALISM – the accumulation of capital – has made people rich and liberated? No it has not!
What made us rich was being liberated (a little at first!) leading after 1800 to an explosion of innovation, accelerating over the next 2 centuries. The result? A 3000% rise in the real incomes per person of the poorest amongst us
A nascent liberalism in Northwest Europe, and at length a good deal of the world, gave ordinary people the permission to have a go – and they did!
A better word than capitalism would be “innovism” says Dierdre McCloskey a retired Harvard economist. It would reorientate economics to studying the conditions for human creativity. The conditions are not top-down coercing of people but liberty. Would we tolerate a top-down approach to music, painting, science or fashion? Then why for economics?
The two real threats we face are tyranny which threatens liberalism and poverty which tyranny causes. We have examples of authoritarian populism around the world and the Covid-19 pandemic has introduced more State interventions
However, we should not allow the State to hold onto these extra powers. Total State intervention in the economy does not have a good track record. Look at Venezuela
Liberalism is grounded in equality – a society with equality of permissions, with no physical coercion to slavery; no serfs to lords; citizens to kings; wives to husbands. This was the creed developed in the 1700s and interestingly is reflected in the social aspects of the current UN’s 17 SDGs
We are concerned that today inequality is growing, however compared to 1800 an average British wage as moved from £3 per day to £90 per day (both in today’s money). Liberalism is at threat in a society that believes things are rotten in a number of ways but if you accept an ideology of adult self-respect and respect for others and resist the sin of envy, we can avoid descending into populism either left or right.
Do you agree with this view of our society and its options to deal with today’s threats?