“CARILLION’S Gazillions!” scream the headlines.
The collapse of the UK’s second-largest building firm, threatening tens of thousands of jobs, has reignited the debate about the future of capitalism.
The implosion of the construction and outsourcing giant, its executives having made fortunes out of public sector contracts, leaves a trail of bad debts — and is shaking faith in “the system”.
A new survey shows youngsters now fear capitalism more than communism. Pollsters ComRes found seven per cent of 18 to 24-year-olds think Marxism dangerous but almost double that are afraid of capitalism.
No matter that the Soviet Union collapsed under the weight of its economic contradictions or that, in the century since the Russian Revolution, centrally planned economies have failed to prosper.
And so what if deluded communist ideologies, by bolstering various dictators, were an accessory to millions of deaths?
Let’s not pretend that the demise of Carillion, worth £2billion back in July but now a pile of IOUs, is not disastrous. It is not, however, a “watershed moment” for capitalism, as Karl Marx fan Jeremy Corbyn declared this week.
Yes, the conglomerate was among a small group of firms that control a dizzying range of public-sector contracts — from building schools, roads and hospitals to running prisons and providing NHS meals.
And yes, its end came straight after another capitalist calamity which cost us all — Richard Branson’s Virgin Trains handing back the East Coast service to the Government, landing taxpayers with a multi-million-pound bill.
This double private-sector failure leaves Theresa May’s Government looking incompetent — even though it was New Labour in the early 2000s which really embraced the Private Finance Initiative (PFI) that allowed Carillion and others to grow so large.
And it emboldens Corbyn and others, who think capitalism is evil and the only answer is mass re-nationalisation.
But Corbyn and his band of followers are wrong. Calls to end capitalism are juvenile nonsense.
For it has been capitalism in various guises that, since the 1989 fall of the Berlin Wall, has lifted billions OUT of poverty.
Capitalism helped make this country. In Britain it began with the end of the feudal system and the rise of the merchant class in the 17th Century.
But it wasn’t until the Industrial Revolution that it really started to pay dividends.
Between 1850 and 2000, Britain’s GDP — the value of everything we produce — increased by more than 3,000 per cent.
Across the ex-Soviet economies and much of the developing world, the share of the global population in “extreme poverty” has plunged from 37 per cent in 1990 to ten per cent today.
This triumph has been driven by the spread of property rights and enterprise — in other words, by capitalism.
And while there is poverty, too, in advanced economies such as the UK and US, we are a long way from Marx’s vision of capitalist penury — with the vulnerable cushioned by a comprehensive, if sometimes patchy, welfare state.
The reality is that capitalism is the most incredible prosperity-building machine the world has known.
The Industrial Revolution — when British capitalism truly emerged — was brutal for many but spread mechanisation and material progress across the world. That paved the way for massive advances in health care, science and the arts.
Since then, as society has advanced, the system’s rough edges have been tempered — rightly.
But it is vital not to dull too much of the commercial incentives that drive the engine of the machine.
Corbynistas dream of a socialist nirvana but it is capitalism — entrepreneurs risking their own capital and that of investors — that has produced the computers and smart- phones that they use to spread their social media messages.
It is capitalism that has developed the drugs and medical equipment that are at the heart of the NHS — and that doesn’t stop the UK from continuing to deliver health care that is free at the point of use.
It is capitalism of the rawest kind that drives the companies that dig up the fuels and minerals upon which modern life depends.
And now, as cleaner, renewable energy becomes more commercially viable, thanks to capitalism, the market mechanism is once again finding ways to combine the pursuit of profit with the common good.
But capitalism only works, and commands respect, when it spreads wealth broadly and makes the world a better place. That has not always been the case.
Years of real-terms pay cuts, and youngsters struggling to attain living standards enjoyed by their parents, mean complaints are growing.
Swathes of voters now view the UK as corporatist or even cronyist, rather than just capitalist.
Even the capitalists know there is a problem. This week Larry Fink, the head of BlackRock, the world’s largest investor, wrote to the heads of FTSE 100 firms and other global business chiefs warning them of the need to make a “positive contribution to society”.
The answer is to fix capitalism, not return to the disastrous statism of the past.
After last year’s General Election, Theresa May said: “The Government I lead will put fairness and opportunity at the heart of everything we do.” This must now happen.
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From housebuilding and banking, to telephony and household utilities, the Government needs to make sure markets work, breaking up the stranglehold of the big boys and letting a thousand flowers bloom.
The key to preventing UK capitalism from taking a wrong turn — and letting deluded Marxists such as Corbyn get their hands on the train set — is more competition.
If there is a problem with British capitalism, it is that there is too little, not too much.
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