Making capitalism more attractive
By Alberto Mingardi
A well-known economic journalist, Hugo Dixon, published an op-ed in the New York Times on “How to make capitalism more appealing“.
I wholeheartedly agree with one of his points: “The classic left-wing response to the perceived unfairness of capitalism has been to tax and spend. That doesn’t work well” But “just because that response has been tried and failed doesn’t mean it won’t be tried again”. With the exception perhaps of the countries in which the memory of socialism is still rather vivid, Dixon is certainly right: people tend to forget how much our conditions have improved since the Industrial Revolution.
Dixon points out that “Viewed from Mars, capitalism has been a huge success. Free enterprise has generated wealth and removed hundreds of millions of people from poverty. But viewed from Earth, what often stands out is how many have been left behind by the march of globalization and technology, while others have gotten ahead by methods more foul than fair”.
This is not so much a point about astronomy, but rather a point about the prevalence of bad news emphasized to the detriment of positive news. In his last book, Matt Ridley points out that “bad news is man-made, top-down, purposed stuff, imposed on history” and instead “good news is accidental, unplanned, emergent stuff that gradually evolves.” Ridley compares events with dreadful consequences (wars) and happenings that had glorious effects on human kind (the feeding of seven billions). The first one tend to be engineered by some specific human beings: the others are the product of the interaction of millions.
In one case we see the agency clearly, in the other we do not. And we are hard-wired not to consider events properly, in cases in which we cannot see an immediate casual link: in cases in which the agency is not so evident (Ridley’s book is precisely on this subject).
So, I think classical liberals should take Dixon’s point seriously, but I’m not so sure there is much to be done in the short term. Shall we pretend events like globalisation and the feeding of billions are the clear result of the actions of some brilliant men, and that’s it? Shall we produce a Marvel comics version of the free market, that instead of focusing on the invisible (indeed) interactions of many, praises just the courage and intelligence of few?
Dixon’s suggestion is different. He looks for a genuine sense of fairness and the rejection of crony capitalism. All good things, but I’m not as sure as he is that this will change the landscape people see here on planet Earth.