MAKING MONEY, PRESERVING FREEDOM

George Monbiot (from Wikipedia)

I was intrigued by a column in the Guardian newspaper recently by the environmental correspondent and in-house favourite George Monbiot challenging us to declare that capitalism is dead. It has long been accepted thinking on the left to say that capitalism is wicked, out of date and incapable of saving us from disaster. And yet, curiously, it seems to go on and on. The system is both resilient and adaptable and has long outlived socialism organised by the state or communism, as it was once known. I think that the death of communism has removed the brake on the acquisition of excessive personal riches which is such a blight on the system and on the lives of those who have accrued great wealth and seem none the happier for it. Having loads of dosh does not seem a good way to live.

Actually, I do not care that much about capitalism in itself. It is the democracy and freedom which come with it that I value. I agree with Winston Churchill who said that democracy was the worst system of government ever invented - except for all the others. The world is full of people who offer cheap and easy solutions to our problems. Just put me in charge for a while and everything will be ok, they say. I don't believe a word of it. These people often used to be on the left but are now mainly found on the right - Trump, Farage, Erdogan et al. 

At least with a consitutional democracy you can vote out those who are in charge every four or five years. Nobody lasts forever in a democracy and sometimes they last a pretty short time, as Theresa May has found out recently. I actually feel sorry for her and think she got dealt a bad hand in trying to sort out Brexit, one which she did not play very well in the end. Once I feel sorry for a leader their time is usually up. Pity does not play well in politics.

Monbiot's argument is that capitalism is failing us because it uses up resources more quickly than they can be created and this will inevitably lead to disaster. I think this underestimates the adaptability of the wealth creation process. Everybody in the country is aware of the potential dangers of climate change and global warming and so single use plastic, hybrid and electric cars and renewable energy are all making headway, not because this is ordered from above but because it is demanded from below. We still want to travel, turn on our computers and heat or cool our homes but at least we are going about these activities in a slightly more responsible way. Most people can buy into a system which takes account of the need to change our ways but are not keen to go back to the Stone Age.

Take tax for example. I can remember the days when tax rates were far higher than they are now, notoriously ninety eight per cent at the top end of the scale for 'unearned' income - ie investments. This led to two things, first the creation of so-called tax exiles, who chose (but were not forced) to live abroad on the advice of their accountants to avoid punitively high taxes. Secondly, inflated transfers fees for soccer players, which could be written off against corporation tax, and creation of entities such as Apple corps which was started by the Beatles who, faced with enormously high tax bills, could squander their wealth on schemes like these which could also be written off. Irresponsible short termism and lack of involvement in your country's long-term future were actually encouraged by high taxes.

Now personal taxes have been reduced to the levels that have been maintained for some time - a tax free allowance of roughy what you would earn on minimum wage, then twenty per cent until you get to around double the national average, forty per cent above that and forty five per cent for the top earners. Some people claim to like paying tax, others hate it and most of us cough up and have a good moan while acknowledging that they are needed to pay for schools, health, roads and agencies which protect us like the police and army. 

I think capitalism works better in a free society where innovation is encouraged. The example of China shows, however, that it can also flourish in repressive societies. Nominally communist, China long ago embraced free enterprise while retaining a high level of state control and offering little in the way of political freedom. In fact, China has a highly repressive and controlling society and has also has experienced terrible environmental problems and high emissions of greenhouse gasses, problems which more flexible western societies have been quicker to address, not because business is concerned with the long-term future of the planet but because the consumer is and demands better ways of protecting it. 

In short, capitalism does not need freedom but freedom needs capitalism. if we are going to save the planet we will have to do so from the bottom up not the top down and this requires the preservation of capitalism and the freedoms that go with it.

How can we individually make a difference as individuals? To find out go to:

https://savingourplanet.net/12-solutions-can-limit-global-warming/

To read George Monbiot's article go to: 
https://www.theguardian.com/commentisfree/2019/apr/25/capitalism-economic-system-survival-earth . 

Edwin Lerner    My other blog is diaryofatouristguide.blogspot.com