Alberto Mingardi  

Shall business defend "capitalism"?

Piketty on "merit"... Setting the Record Straight on...

John McTernan, a former political secretary to Tony Blair, had an interesting article in the FT. He urges "British businesses urgently need to become actively involved in politics". Mr McTernan is actually urging companies to join the debate on Scotland and the European Union, arguing that allowing the Scots to secede and leave the United Kingdom may be dangerous for them.

Mr McTernan rightly points out that it is not that "businesses do not want to get involved in politics" as they are "deeply and daily engaged in it," but "lobbying behind the scenes". Instead, Mr McTernan would like to see business making a principled case for capitalism:

The fundamental problem for business is that, while Thatcher achieved many things, when she reformed the UK she failed in one crucial area. She did not manage to teach the country to understand, let alone love, capitalism.
Now, I am not so sure that Scottish secession and eurexit are good cases in point. I personally find it not very appropriate for companies to take sides. After all, different employees may have different and fully legitimate opinions about the Scots and the English keeping their political partnership, and on the nature of the European Union. What Mr McTernan fears is that "populism" will create conditions under which enterprises will find increasingly difficult to thrive. That a number of European populist movements have a strong anti-market ideology is true, though this doesn't seem to be the case with Nigel Farage's UKIP, that criticises Europe, among other things, for its over-regulating vocation.

It is however certainly true that many business leaders do not seem to be keen to defend the profit motive, or the market economy at large. Sometimes they do use the right language. Sometimes they are reluctant to defend competition--because they often seek privilege and a set of rules that favour them. Sometimes they are perfectly good and competent managers or entrepreneurs, but have an ideological or philosophical inclination towards different set of rules than those that libertarians would approve of.
I thus wonder if it is really possible that (a) business leaders understand that an intellectual climate favourable to "economic freedom" is in their long term interest and (b) that they thus endeavour to make such case to a broader audience. This seems to be unlikely for a variety of reasons: first and foremost because "businessmen", "entrepreneurs" or "CEOs" are not a very homogeneous group, ideologically speaking, in spite of some of their critics may believe.

Don't get me wrong. I would love to see entrepreneurs wearing t-shirts saying "Capitalist, and proud", and making the case that their work is essential for a prosperous and thriving economy. But I have difficulties in thinking of "business" as an homogeneous constituency for market capitalism - and I fear it is never going to be one.

Comments and Sharing

CATEGORIES: Economics and Culture

COMMENTS (7 to date)
Carl writes:

I always just assume that the only group of people who despise capitalism even more than the militant socialists are business people, especially big business people. It's only natural that one's ideological fondness for competition should ebb and flow relative to one's fortunes.

Alberto's assertion that "an intellectual climate favourable to "economic freedom" is in their long term interest " seems rather odd.

-How is it in their interest that people be allowed to freely compete with them?

-If economic freedom were really in their interest, wouldn't they pursue it? They are after all, in the business of pursuing their interests.

-If economic freedom is really in their interest, then why is there so much crony capitalism?

The benefits of economic freedom from their perspective are, alas, surely all too "long term" for their liking!

I agree with Carl.

A paradox in my libertarian view is that those whom I regard as heroes (entrepreneurs) rarely regard themselves as heroes.

For example, a couple of immigrants who run a Mom-and-Pop store are examples of good citizens, in my view, for their contribution to the economy. But they often hope that their children can grow up to live what they consider to be better lives -- such as to go to college and then get a job as a government-school teacher. This would be a step down in my idealistic view. But that is the way it is. In fact government-school teachers probably have easier and more prosperous lives, in most cases.

Nigel Farage's UKIP pro-market? Well, I think this picture is a good example of what his party's ideology is really about.

English Professor writes:

As Milton Friedman once remarked, free markets have no natural constituency (can't find the exact quote right now). The dominant ideology of today is anti-market: it sees the free market system as exploitative and oppressive. And business owners for the most part want government to protect them or even provide them with some sort of advantage. They're no great fans of competition. So "capitalism," in the sense of Adam Smith's "system of freedom," has no one beyond a small group of intellectuals (let's call them "classical liberals") to promote and defend it.

ThomasH writes:

Defending capitalism would be a conflict with many if not most firms business plans. One might hope that business associations might support capitalism, but they seem rather just to support the business interests of existing firms.

Roger McKinney writes:

Adam Smith warned that

"Seldom do businessmen of the same trade get together but that it results in some detriment to the general public."

Businessmen don't want free markets; they want monopolies with them as the monopolist. The constituency that benefits most from capitalism is that of the consumer, but consumers don't understand.

Glen Smith writes:

Don't know about England, but here in the US, many businesses hate capitalism.

Comments for this entry have been closed
Return to top