“A creeping sense of hostility to business” has taken hold in the Conservative party, says George Freeman, former head of Downing Street’s policy unit. This hostility is not “creeping,” George; under Mrs May it is galloping. Last Saturday the prime minister denounced “the unacceptable face of capitalism.” I suppose her statement was a follow-up to her disastrous election manifesto which a commentator at the time described as “somewhat to the left of Ed Miliband’s.” No wonder she lost her party’s majority when she began the campaign by alienating her core supporters. Alas we now have not only an extreme socialist opposition in this country; we also have a socialist government.
But if you read the papers and listen to the BBC you’d think that Britain is a satanic outpost of capitalism red in tooth and claw. Whereas in fact we live in something approaching a socialist state. Here are some facts:
Nearly 50% of Britain’s GDP goes to the public sector. In so called communist China it is only 17%. At the height of their totalitarian tyranny, the Soviets were only spending 10% more than we do today. Never mind the anti-capitalist rhetoric, examine the facts. You are taxed on your wages. Then you pay 20% VAT on nearly everything you buy with the money on which you have already been taxed.
Fuel taxes are at an outrageously high level. If we have a car we pay road tax. If we drink or smoke, the price of our pints and fags are artificially inflated by taxation. Governments ask people to save, so to reduce the burden of taxation. But the prudent who do save are paid little or no interest. In fact, with rates as they are, savers – especially among the older generation – are actually losing money by their thrift. If we do save, we are taxed again on the meagre interest
If we do our bit by buying shares in British companies, we are taxed on our dividends. There are further taxes on share dealing. The state broadcasting propaganda department fiercely polices an annual tax called the TV licence. The industrial, commercial, financial and manufacturing companies which generate income for the country pay large sums in Corporation Tax and other business taxes. And, in the form of Inheritance Tax, we have to pay up again even when we’re dead. British businesses which ought to be leading our economic recovery are prevented by labyrinthine corporate and state regulation.
Is this what Mrs May calls “capitalism”? These levels of taxation and regulation are combining to hinder economic recovery. And such taxes are required only because the government needs them to pay for its massively expanded army of civil servants, its quango mountain, its legions of useless box-tickers, its lousy education system, the failing and scandalously corrupt NHS, and its bloated state welfarism. Then there are the howling protests against “the cuts.” The truth is that this government will be borrowing and spending more when it leaves office than it did when it came in. Whatever economic and social system is currently being operated in our country, it is not by any shadow of meaning capitalist.
And yet the lefty press – and now Mrs May – play adolescent politics and talk as if we are living at the height of the 19th century industrial revolution, under Gradgrind and Bounderby with altar boys being shoved up chimneys and girls shipped off in the white slave trade. And so we see the nation’s largest wealth creator, the City of London business and finance houses traduced and reviled daily.
Its critics accuse capitalism wherever it is practised of increasing unethical inequalities. But this is not true. Generally speaking, those nations which have hitched their economic bandwagon to free competition are raising their people out of poverty. What emerging economies need is not aid – poor people in rich countries giving money to corrupt rich people in poor countries – but free trade. For example, Africa could feed not only itself but half the world – and Europe in particular – if its agricultural producers were paid the market price for their crops. But they are not. Instead, food prices are kept artificially high by huge subsidies to EU farmers under the Common Agricultural Policy.
Socialism has never worked anywhere: where it is practised moderately, it impoverishes the people; where it is practised thoroughly, it leads to the erosion of freedom, the gulag and genocide.
The road to prosperity rather than to serfdom remains what it has always been: the policies of political and economic freedom – low taxes and a light touch when it comes to business regulation – coupled with strong national institutions. This creates the necessary framework for the generation of wealth and a fair and functioning taxation system which then provides for that just redistribution of resources which all parties say they desire. This is the only sort of freedom which is genuine – because it is rooted in institutionalised practicalities and not in talkative theories about rights and abstract notions of justice.
There is a further important ingredient about which we hear little from Conservative politicians these days. This is the much-despised practice of charity. I say not the idea of charity but the practice of charity. Historically, a great proportion of those who have become wealthy have looked for good causes upon which to spend at least some of their wealth. The centuries since industrialisation have produced philanthropists by the hundreds. But charity has a longer pedigree even than this, having its origin in the gospel itself – a fact to which we might wish our senior churchmen would pay more attention.
I can speak from personal experience as a City priest of many years and as Chaplain to half a dozen livery companies. It was the Church and these ancient companies and guilds which built the parish churches, founded hospitals, hospices and schools and delivered so many from hardship and deprivation. This would have been impossible without the conditions provided by the free market. If that is capitalism, then bring it on.