It's not capitalism we need to defend, it's freedom

Every now and then I get asked about why I'm in politics and, once I've done the self-deprecating bit about how no other business would have me, I get to the crunch. I am involved because free speech, free markets, free trade and free enterprise need defending. The systems of government, the lobby groups, the business organisations, the voluntary sector and 'thinking people everywhere' all conspire to limit and restrict your and my freedom to act. Challenging this sad truth is essential.

And the problem isn't capitalism, it's government. This isn't to say that big business is innocent - the amounts spent by business on lobbying government for law changes, subsidy, new trade barriers and more regulation remind us that many large organisations really don't like the idea of freedom. So when Corbyn-loving students tell me capitalism is corrupting, I get their point - hardly a day passes without one or other example of a big business getting some sort of protectionist fix or some new regulation aimed at preventing market entry. We've known this for a long while - it's the central theme of Adam Smith's 'Wealth of Nations' - mercantilism, market fixing, cartels and protectionism, all those things the technocrats try to justify, prevent the growth of wealth, the opportunity for equality and the raising of people out of poverty.

I also understand how those young people are disgruntled at being 'Generation Rent', at having great fat student debt they probably won't pay off and at seeing my generation sitting snuggly on a pile of assets (but still moaning at having to use those assets to look after ourselves in our old age). But when Corbyn or other socialists try to say that these problems are some how a consequence of free markets, free trade or free enterprise, they are lying - even when they use the catch-all term of capitalism.

Housing in London is expensive because for sixty years we've run urban containment policies around the capital and for forty of those sixty years, London has generated more new jobs than it has new houses. And if you provide just six new homes for every ten new households, housing is going to get more expensive. This isn't the fault of the market, it's the fault of government for rationing the land we've got to build houses on. They call this planning and it's the basic building block of socialism - instead of having a free market, some folk in an office with a computer model decide what the price should be, how much should be made and how it should be distributed. It limits your freedom and it doesn't work.

Defending freedom is not, therefore, simply about the moral imperative of liberty but is justified for straightforward and practical reasons. Those freedoms - speech, trade, markets, enterprise - should be defended because they work, because they are the things that made us rich and, right now, are making poor people everywhere richer. The only places - North Korea, Cuba, Venezuela, Zimbabwe - where people are getting poorer are places where these freedoms are comprehensively rejected. Places where socialism - the planned economy - is the chosen model.

Everywhere I look freedom is under attack. Technocrats and business lobbyists saying import tariffs protect domestic business. Local councils saying limiting procurement options supports local economies. Planners saying the problem is the wrong plan not the planning itself. Farmers saying they couldn't operate without subsidy. Public health groups wanting to ban smoking in parks or to fix booze prices. Police forces calling for new powers to seemingly arrest anybody for almost anything. Housing lobbyists saying the solution is to fix rents not to build houses. Schools snatching sausage rolls from innocent children's lunchboxes. Mayors enforcing public morals by banning pretty women from advertising or drinking from the train.

And then we're told the problem is capitalism? It's not, the problem is that government - in cahoots with a bewildering lobby of charities, businesses and 'campaigners' - takes away freedoms. And we can't subdivide these freedoms - be cross about the loss of one freedom that's important to us while cheering on a ban on something we don't like. For sure some of these losses of freedom are less damaging than others but each loss - from daft rules on advertising vaping to 'Public Space Protection Orders' that make anything an official doesn't like a crime - represents a further restriction and another barrier to pleasure, enterprise or exchange.

I'm happy to defend capitalism - the idea that the rewards from business success goes to the people who put up the cash - but it's not as important as defending free markets, free trade, free enterprise and free speech. Those freedoms constrain the worst urges of business, protect us from the busybody and limit the oppressive instincts of government. We have become too glib about each new loss of freedom - even sometimes to the point of welcoming it because of the NHS or crime or community safety or, the favourite all-purpose reason, because of the children.

So let's get less hung up about whether something's owned by the people who invested, by the workforce or by the community and worry instead about those who want to take away your freedom to organise business how you want. Let's be bothered about government and business wanting to fix gas prices or food supply or where you can buy gin and lemonade. The good life we enjoy and that we'd like everyone to enjoy, was made possible by that free enterprise, by those free markets, and by that free trade. And underpinning all this is free speech - our right to speak what we see as truth, to promote our business and to challenge the assumptions and presumptions of those who govern us. Freedom matters - let's defend it.

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Tim Montgomerie perhaps needs to learn the difference between business and markets

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Montgomerie is on about Donald Trump and, in the main his little article is pretty much spot on. Except for this bit:

Conservative Brits may look on in amazement — but it’s worth remembering that Trump does have a point. It wasn’t Karl Marx who accused leading business people of being ‘all for themselves, and nothing for other people’. It wasn’t Friedrich Engels who condemned the ‘mean rapacity’ and ‘sneaking arts’ of many merchants and manufacturers. It was Adam Smith. The father of modern economics wasn’t an uncritical defender of free enterprise. He knew that markets could lead to extraordinary selfishness.

Or rather the last bit. Markets, where they are allowed to operate freely, are not selfish because they depend on the mutual benefit to buyer and seller. Nor was Adam Smith against free markets or even critical of free markets. What Adam Smith hated was mercantilism and the cartel, the core economic position of what I call 'business conservatives'. Sometimes this gets called 'crony capitalism' (a term widely used to illustrate what goes on in the US system and in the EU but was first coined to describe the rapacious kleptocracies of Marcos in the Philippines and Suharto in Indonesia).

We should be now have learned the lesson Tony Blair taught conservatives - that the old adage of the business conservative, "what's good for business is good for the nation", doesn't apply. It is what is good for consumers - for the people - that matters and we know that, in economic terms, 'good for the people' almost always equates to free enterprise and free trade. What Smith railed against was that businesses clubbed together to fix markets, that they pressured governments to introduce protectionism, and that they supported regulations that prevented new competition from developing. For Smith free trade and free enterprise were the solution not the problem.

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"Oh them? They're trade." Thoughts on who the Conservative Party is 'for'...

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This post is a bit of a mish-mash - partly it bounces off Chris Dillow's idle considering of who the Tory Party is 'for' and partly it extends on my own musings about the continued disdain - from professionals and increasingly from public servants - for people who make their living running private businesses. A while ago I wrote about my mum having to use the 'tradesman's entrance' to deliver meals-on-wheels to the relicts of vice-admirals:

So mum delivered the dinners to these very posh ladies, so posh that, for one, mum had to go through the kitchen door. The front door was only opened for visitors and mum, for all that she was bringing the only hot meal that lady would get that day, didn't qualify as a visitor. Mum was trade. And trade used the kitchen door.

This was pretty typical of a 'certain sort' - there was something slightly grubby about the mundane business of producing and delivering the goods or services people need. And front doors weren't for that sort of thing. However, we should be more concerned by the constant drip of 'profit is bad' arguments emanating from the publicly-employed middle classes.  Partly this argument is a response to the perceived (wrongly perceived, I would judge) threat to these comfortable public servants that comes from the disruption of public monopoly - either by fiat through outsourcing and competitive tender or else through technology throwing up different approaches to the services those public monopolies deliver.

However, I was struck by this extract from an essay by Don Boudreaux about the work of Deirdre McCloskey on the reasons for capitalism's success:

Until the 17th century, those who earned their living through trade were the Rodney Dangerfields of their eras: they got no respect.  Merchants and other people operating on the supply side of commercial activities and transactions were tolerated.  But they were viewed and spoken of with contempt.  Unlike warriors who dirtied their hands honorably (namely, with blood), traders dirtied their hands dishonorably (namely, with profit).  Unlike the nobility who got their riches honorably (namely, by idly collecting land rents), merchants got their riches dishonorably (namely, by actively trading).  Unlike the clergy who won their rewards honorably (namely, by pondering the eternal), the bourgeoisie won their rewards dishonorably (namely, by responding to what Hayek later called “the particular circumstances of time and place”).

I would suggest the 'profit-is-bad' argument justifying public monopolies (and indeed justifying creating new public monopolies) still echoes what Boudreaux is saying - not simply the view that such a public monopoly in say transport systems is a better way to run those systems but that, by removing profit, the system is morally better regardless of whether the service it provides is improved.

We see, in the ever more shrill and strident verbal assaults on News Corp and the Daily Mail, another echo. Indeed, the attack on free speech implicit in the Leveson witch hunt should remind us that the target wasn't the press in general but the for-profit press and especially the part of the press making profits for Rupert Murdoch. The behaviour of The Guardian (owned by a trust) or the BBC (a public sector body) was not under scrutiny in this process because these are noble undertakings whereas Rupert and Paul are merely trade. Indeed the sneering dismissal of Rebekah Brooks on the basis of her working-class - 'trade' - roots amplifies the echoes of the time when business was grubby. Reading some pieces you can almost hear the shock at hearing Rebekah, the daughter of a 'tug-boat captain', was allowed in through the front door.

So when Chris Dillow observes in stumbling around the target audience of the Conservative party comments that:

Now, you might reply that this merely shows that Tories are the party not of big business but of economically illiterate little Englanders - hence its vulnerability to Ukip.

Even this, though, isn't wholly clear. Austerity has clobbered a lot of traditional Tory voters - older, wealthier people who have suffered from low returns on their savings. This makes me wonder whether our (OK my) longstanding prejudice is actually true. Maybe the Tories are not any longer the party of big vested interests in general.

...I am struck by the realisation that the Conservative party is 'for' (if that means much these days) people who work in the world of making goods and producing services that are sold in markets, some of which might be free and open. And the Conservative Party isn't just 'for' the owners and directors of these free enterprises but it is 'for' all the people who work in those businesses - from the boss to the tea boy, from the financier to the cleaner. In the broadest sense of the word, embracing the sneering meaning 'trade' held for many in the traditional elite and in the professions of law and medicine, the Conservative Party is 'for' trade and 'for' the people who engage in trade.

And I would like to think, against those people who literally or metaphorically make people like my Mum use the kitchen door.

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Capitalism works and we should celebrate

After all there's an International Workers Day, why not an International Capitalism Day.

Here in England we've got rather used to being told just how bad capitalism is. And how a decent society is only possible because of the control and regulations placed on that capitalism by the benevolent hand of the government. There's sort of a point to this argument - it justifies government (and the millions it employs to administer those controls and regulations) and it reminds us that we can never be completely free.

But what is missing in all this is a celebration. Something that recognises just how fantastic capitalism has been for us, how it allowed us to escape from the bitter toil of subsistence agriculture, how is gave us wages to spend and, in time, a surplus from those wages to spend on pleasure. We seem to have forgotten just what capitalism did for us.

Fortunately, we get a glimpse still of capitalism's wonders:

"There have been big changes," she said, sitting in her office on an industrial estate 20 miles from the city's market. "Yiwu is changing every year - new buildings, new markets, new products and also many new customers." Yu Hexi, 52, the manager of Yiwu Beautiful Life Flower Co. Ltd a local firm that makes the imitation flowers that adorn the heads of women across Europe has fared even better.

"I never imagined, or even dared to imagine, that I would enjoy such a good life now," he said. His parents were once part of a rural Communist production team. Now, he runs a company with an annual turnover of more than half a million pounds.

"When I was little, we were really, really poor. My parents were peasants.

We didn't have enough food. Now our family has three cars. We built the best house in our village.

Multiply Yu Hexi's experience a million times and you get an idea of what capitalism is doing for China - and, because we're buying the things those Chinese businesses are making - for us too.

But it's not just the people who run the businesses, it's the workers too:

"There have been big changes in recent decades," she added, without pausing from her packing duties on the production line. "The city is getting better year after year. The most important change for me is that more factories are bringing more job opportunities." Shen Youfeng, 52, who works in the factory alongside her 18-year-old daughter, Feng Xueqing

More jobs, rising wages, the benefits of urban life and the chance to progress through education, hard work or both. This is what that capitalism brings to China and what we should be celebrating because we only have those things today because of capitalism.

The evidence of the last three decades - a time of unprecedented improvement in the lives of the world's poorest people - tells us that the idea of a free market, of free trade and of capitalism provides the sort of social and economic improvement we want for everyone. Yet we never pop open the champagne corks or put out the bunting to celebrate what free enterprise and free trade has brought the world.

If you want to reduce poverty then go buy things made by poor people in poor countries. And this is also why everyone who is even vaguely lefty in outlook, even a tiny bit concerned about improving the lot of the poor, should be pro-trade, pro-globalisation, in short, should be neoliberal capitalist running pig dogs intent on exploiting the labour of the poor.

And the reason for this is that it works.

Every other approach to improving the lives of the poor has failed. Every single one from socialism, fascism and communism to import substitution behind trade barriers and the grand state approach so loved by central African despots (and their French sponsors).

Capitalism may seem "unfair" - some people got pretty rich - but the deeper truth is that this unfairness is a chimera, a distraction from the real business of globalisation, free trade and free enterprise. And that business is making us all better off. Not just in economic terms but in every measure of human development. Free enterprise and free trade really do make our lives better. Every time.

Capitalism - free enterprise, free trade - made us rich. It's making the Chinese rich. And it will make Africans rich. Let's celebrate it just for once.

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Sorry Ms Moore, I'm right wing and I believe in freedom

There has, it seems, been some great debate amongst assorted "equalities" mongers - indeed the debate has descended into a row and from there spiralled down into political protest. And all because of something that Suzanne Moore said.

So the Guardian, seeking to pour oil upon these troubled waters, gives Ms Moore the space to explain herself (as it were). In doing so she launches into a justification founded on a belief in freedom:

...I feel increasingly freakish because I believe in freedom, which is easier to say than to achieve and makes me wonder if I am even of "the left" any more.

Of course, Ms Moore spends the rest of her article explaining how she's still a leftie really and that believing in freedom is a good thing. In doing this she can't resist positioning herself away from those on the right who claim to believe in freedom:

What we have is a few rightwingers who took some E in a field once and so claim to be libertarians, but are in fact Thatcherite misogynists. We have the double-think of "free schools", which exclude those who most need them. We have "freedom" for the very rich to take from the very poor while lecturing them on their moral poverty. We have women and gay people pushed into the conformity of lifelong monogamy, even though it clearly does not work for so many.

You see what Ms Moore has done here? That's right, she's parked the idea of free speech (that she claims to support) and sought to redefine freedom as something that cannot reside with the right. Now I'm a right-winger (although I never took an E in a field) and I don't recognise Ms Moore's argument. For sure, I've no time for those patronising sorts who want to judge the lifestyle choices of working-class people - you know the drinking, smoking and shagging. But I don't see this sort of middle-class disgust at such lifestyles as a peculiarity of the right. Indeed, the Guardian-reading left is perhaps more guilty of wanting to make moral judgements about lifestyle.

The problem for Ms Moore is that she likes the license of sexual liberation and the idea that no-one should have their talent dismissed simply because of their gender, sexual preferences, skin colour or accent. But she can't get her mind round the idea of economic freedom - the free enterprise and free trade bits of the great triumvirate of liberties.

As a Conservative, freedom is central to be world view. It is what we fought to secure, it is why we stand in silence every November to remember and it's why we get involved in politics. If freedom were secure - and secure for ever - then we could return to the plough and get on with the joy of life. But that freedom is threatened - by the sorts who would deny Ms Moore her words but also by those who would let others starve to protect their own income and position, by those who would create monopolies and by those who would castigate someone for the dreadful crime of creating jobs, wealth and success.

Suzanne Moore is right about freedom. But wrong to try and suggest - even to hint - that freedom can only be owned by the left.

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Free speech, free enterprise, free trade...

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...and while I’m about it free choice and free markets.

It hurts doesn’t it! I’ve been struck by the swiftness with which people have told me that, yes, believing in free speech, free enterprise and free trade are great but that this doesn’t mean supporting free markets. Because free markets are a bad thing.

Don’t you just love the division of freedoms? We launch enthusiastically into supporting freedoms where we like them but feel unable to back those freedoms where they don’t suit our prejudices. So here’s a little game with my three freedoms.

Supporting free speech means:

• Opposing the arresting of people for the ‘crime’ of causing offence - free speech means having the right to offend and to be offended.
• Believing that there is no institution, religion or organisation that is above criticism or immune from satire – free speech means having the right to criticise, to question and to condemn
• Rejecting the banning of advertising – marketing communication is speech and should be free, to suggest otherwise is to undermine free speech

Supporting free enterprise means:

• Believing that there are almost no circumstances where “more regulation” is either right or appropriate – free enterprise can only work where markets are free
• Rejecting the concept of ‘market failure’ – markets always and everywhere, when left to their own devices, succeed and failure is the result of intervention
• Opposing market fixing devices such as guilds, registrations, subsidies and regulations that restrict market entry – free enterprise requires a level playing field not a protected system

Supporting free trade means:

• Rejecting managed markets – and this includes so-called “fair trade” – since they prevent free exchange and free enterprise
• Opposing protectionism in all its forms whether regulatory or financial – tariffs, duties, anti-dumping rules, quotas and environmental or employment regulation
• Supporting the liberalising of international markets in finance, government services and insurance – without free trade in these areas, other trading arrangements are compromised

This is the deal with freedom – it doesn’t come in tidy little units where we can have a little free speech but not have free trade. If you want it you have to want it all. So when people try to tell me that they want a free press but not a free market in news (because of the big bad Murdoch) then they are, in truth rejecting that free speech. When people say they want free enterprise but that free markets must be controlled, I know that they don’t support free enterprise. And when people tell me they support fair trade (and suggest that this is somehow ‘ethical’), they are no friend of freedom.

All these freedoms interlock – dividing them doesn’t work and diluting one freedom compromises another. It’s hard to have free enterprise without free speech, free trade requires free enterprise and the ability to choose, interact and exchange is central to any society laying claim to being free.

Those three things – free speech, free enterprise and free trade – are the things that matter. And we know they’re working when we have free markets, free assembly and free choice.

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So it isn't all inherited privilege then?

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In a really rather snide article describing various technology "moguls" as 'robber barons, a Guardian hack called Naughton has reminded us that the left's myth-making about wealth and success - that it remains trapped within a self-sustaining elite - is utter nonsense. Naughton (without intending so, I'm sure) destroys this fiction in just one paragraph:

What's striking about this is not just the staggering wealth that these people have managed to squeeze out of what are, after all, just binary digits (ones and zeros), but how recent are the origins of their good fortunes. Mark Zuckerberg, for example, went from zero to $17.5bn in less than eight years. Microsoft – the company that has propelled Gates, Ballmer and Allen into the Forbes pantheon – dates only from 1975. Oracle was founded in 1977. Bloomberg turned a $10m redundancy cheque from Salomon Brothers into his personal money-pump in 1982. Dell started making computers in his university dorm in 1984. Bezos launched Amazon with his own savings in 1995. Brin and Page turned their PhD research into a company called Google in 1998. And Zuckerberg launched Facebook in 2004.

All of those riches. All that success. All the jobs and taxes and investment and philanthropy (plus sadly Mike Bloomberg's ghastly nannying fussbucketry as Mayor of new York) was made possible by these men having ideas, taking risks and winning.

And right now a new generation of Gates', Dells and Zuckerbergs - a new bunch of entrepreneurs - are doing the same. In twenty years from now we'll be talking in the same terms about a load more men and women who have made billions having started with nothing.

The point about free enterprise is that this opportunity - the chance to be a billionaire - is open to everyone. For sure only a few make those millions but the opportunity to do so is there for us all. So next time you hear some left-wing, equality-monger gibbering on about gini co-efficients and whining about how it isn't fair that some folk inherit money while others don't, point them at the paragraph above.

It isn't all inherited privilege is it!
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Free speech, free enterprise, free trade....

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These are the three things that matter most to me - fighting for them is the reason I remain in politics. Little else matters when you get to the crunch - free speech opens the doors of discovery, free enterprise allows us to create wonders from that discovery and free trade allows the riches of that discovery and creation to be shared by all.

These things are also the reason why I'm right-wing rather than left wing. And I'm reminded again just how much the left will always fall back on protection - the route to stagnation, stasis and the promotion of poverty. Here's some chap called Hines in the Guardian:

Progressive protectionism by contrast would instead allow countries to wean themselves off export dependence. It would enable the rebuilding and re-diversification of domestic economies by limiting what goods states let in and what funds they allow to enter or leave the country. Having regained control of their economic future, countries can then set the levels of taxes and agree the regulations needed to fund and facilitate this transition. 

Clearly Mr Hines has never been to North Korea! Yet this proposal - little different from the autarky that thrilled Mussolini, fascinated Franco and led to Pol Pot's murderous 'year zero' - is made seriously by a left-wing commenter in a leading English newspaper.

The left really don't understand this freedom stuff - it's not just that free speech, free enterprise and free trade are morally right, it's that they are better in practice too! And when we limit freedom to speak, to do business or to trade, we make ourselves poorer in spirit as well as poorer in the pocket.

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