NEW MEDIA ARTICLE
Regular readers won’t need me to remind them that capitalism has been getting a bad name in recent years.
Free market economics has been blamed for the Great Recession (wrong: this actually resulted from dangerous banking practices, feeble regulation and debt-based economic policies). Banking and corporate scandals, we are told, are the product of free markets (wrong: scandals simply result from bad behaviour).
The latest and most powerful indictment, set out to good (or at least controversial) effect by Thomas Piketty, is that capitalism is the cause of widening inequalities of wealth and income.
What has disturbed me most about this is the way in which supporters of the free market have rushed, in their droves, to defend inequality. The all-too-frequent response to Piketty seems to be that capitalism and inequality are Siamese twins, and we should like it or lump it.
Frankly, this is dangerous nonsense.
It is dangerous because, if capitalism accepts the inequality tag, it will go the same way as feudalism, the French ancien regime and the Russian Tsars.
It is nonsense because free markets, founded in competition and operated ethically, do not create inequality. Corporatism, on the other hand, does create inequality, just as surely as absolute monarchy, feudalism and communism.
Supporters of popular capitalism need to put the record straight. I’m delighted to have been invited to write on this for CapX, which incidentally is a first-rate source. You can read my article here.
As ever, your comments are very welcome.