Using the C word to prop the system up

Suddenly it’s alright, if not de rigueur, for the political elite to talk about capitalism – so long as you end up praising the system rather than burying it.

Yesterday it was prime minister Cameron’s turn. He came out against “turbo-charged” capitalism, declared that City bonuses were “out of control” and said the Tories favoured “social responsibility”.

Naturally, the leader of Britain’s most significant ruling class party was not about to propose a radical alternative. In fact, Cameron insisted that the “real solution” to the system’s current problems was “more enterprise, competition and innovation”.

Open markets, he declared, were the “the best imaginable force” no less for “improving human wealth and happiness” and could “actually promote morality”. Believe that and you’ll believe anything.

The question is: why is Cameron so desperate to preach the alleged virtues of capitalism and markets at this particular moment? Why did Clegg call for a John Lewis co-ownership model of capitalism? What made Miliband distinguish between “predatory” and “good capitalism”?

What unites them is their role as political custodians of the capitalist system, sharing out the management of the wider state’s responsibility for its development. Just as importantly, their job is sustain the system’s legitimacy in the eyes of the majority, which it requires if the 1% is to stay in control.

And that is what is under pressure, as every survey reveals. Trust in and support for mainstream politics and politicians, as well as the operations of big business and banks, is ebbing away.

The parliamentary democratic state system is rightly viewed as partisan for siding with corporate interests in the crisis, bailing out banks while taking it out on ordinary people. In practice, it is undemocratic. A million young people are out of work; living standards have been savaged; many require two or more low-paid jobs to make ends meet while key public services are being wrecked.

Enter Cameron, Clegg and Miliband. Together they are critical of “corporate greed” and other features but carefully avoid any censure of the fundamentals of the capitalist system let alone suggest there might (or ought to) be an alternative. Even Cameron’s criticism of New Labour’s “Faustian pact” with the banks (on which he is right) is another diversionary attack.

For it is neither corporate greed (capitalists down the ages have practised this) nor the excesses of banks and bankers (also not new) that lie at the heart of the present downward spiral into global depression on a scale scarcely imaginable because it has no parallels.

The financial system provided the credit (and its twin, debt) for a globalised economy that is required to grow year on year to sustain profit levels and satisfy shareholders. Going into reverse, destroying production and sacking people, is what happens when debt overwhelms consumers.

Banks collapsed because bad debts began to mount, calling into doubt the questionable value attributed to all sorts of assets that looked good on paper so long as they earned an income. Meltdown II is now on the cards. A new credit crunch already exists and the debt crisis overwhelming the eurozone is a reflection of the recession.

Reining in City bonuses or curbing executive pay will make not a jot of difference to how this crisis unfolds. This is merely the froth of capitalism as a system of production and exchange. Creating an alternative system which does not depend on constant expansion in search of profit is the basis of a sustainable, rational alternative.

Inevitably that means taking ownership and control of capital out the hands of the reckless minority and placing it under democratic stewardship. That is what distinguishes us from Cameron, Clegg and especially Miliband.

Paul Feldman
Communications editor