Living under capitalism?

Last night on Channel 4 there was a program about the 1987 crash. The comment was uttered twice that at the time, people though that it signaled the “end of capitalism.” How can something end when it was never there in the fist place? This shows an extreme misunderstanding of the political climate of the time. People often believe that we live in a capitalist country; this is wrong, very wrong. This belief comes from a fundamental misunderstanding of capitalism and the situation that we find ourselves in today.

People believe that a society is capitalist if people are making money. That is clearly an oversimplification, but it seems to be the case. Somehow the common view of capitalism seems to be “make the rich richer and the poor poorer”. Capitalist free markets have never made any section of society poorer, and have in fact lifted the wealth of the poorest in society today to wealth that the Kings of a few hundred years ago could only imagine. While in Communist China, the wealth of the entire nation stagnated until the recent free market reforms were brought in to begin the recent growth that we have seen.

The massive amounts of wealth that were created from the economic reforms under Thatcher were indeed capitalist in nature, however, that does not mean that we were living under capitalism. There was still such a thing as state owned business, regulation, state funded education and health. The government was still spending almost 40% of GDP. That was not capitalism, though it was no doubt a huge evolutionary step forward for Britain. Without the privatization of the Thatcher era, the wealth that we have now would not be possible. So while we have elements of capitalism within our society, we have just as many elements of socialism, and even Marxism as well. Taxation, NHS, state owned education, regulation etc.

All of this is missing the point though. Capitalism is not about money. Capitalism is about the individual rights of each person, the right to freedom and property. Since it is impossible to centrally plan an economy, or to have state owned business, regulation, tax etc without violating the right to property, the only system that is available within capitalism is the free market system, a system that has proved itself throughout the centuries. So money is not the defining element of capitalism, neither are free markets, the individual unalienable rights are, and those have been violated to one degree or another by every government we have ever had in Britain, and that is why capitalism does not exist here.