First published in the Sunday Times on 8th November 2015.
Why do intellectuals hate business so much? I was reminded of their dislike for free enterprise when I read about a new series of lectures sponsored by a Cambridge college, entitled Capitalism on the Edge. This asks questions such as “So has capitalism run its course?” and suggests that “… the private sector has not operated in the interests of society, and…its reputation for moral behaviour is severely tarnished”.
The irony is that the Cambridge college concerned, Murray Edwards, is partly named after Ros and Steve Edwards, who made a capitalist fortune with a software company called Geneva Technology and donated £30m of it in 2008, leading to the institution’s rebranding (it was formerly New Hall). But academics have always bitten the hand that feeds. Far too many of them wilfully deny the vast benefits that market systems have brought to the world, preferring nebulous economic models that simply don’t work.
The slant of the talks does not really surprise me. The college’s president is Dame Barbara Stocking, who has never worked in the private sector. The speakers include predictable critics such as the TUC general secretary Frances O’Grady and Paul Mason, a left-wing author of books including Postcapitalism and Meltdown: The End of the Age of Greed.
Unfortunately the best proponents of capitalism, its practitioners, are by nature men and women of action rather than theorists. Entrepreneurs are too busy actually innovating, growing their companies, creating jobs and investing to engage in impractical debates about the merits of the private sector.
One reason intellectuals are suspicious of business is ignorance. Most work in the non-profit, state and subsidised sectors and have no understanding or direct experience of the private sector. Of course they rely indirectly on businesses to make the economy function and pay their wages through taxes and so forth, but they prefer to ignore such inconvenient truths. As Winston Churchill said: “Some see private enterprise as a predatory target to be shot, others as a cow to be milked, but few are those who see it as a sturdy horse pulling the wagon.”
Another factor may be snobbery: many academics and other clever people think those who are motivated by profit are vulgar. They have an almost pseudo-aristocratic prejudice against anyone in “trade”. But they forget that almost 85% of the working population are employed in the private sector, by millions of large and small companies. Most of us are hugely dependent on the success of those enterprises for our livelihoods. But generally academics and those in the arts have a vested interest in a bigger state. They are likely to benefit from higher public spending, nationalisation and other ill-advised left-wing policies. They clamour for more regulation and higher taxes. But as Margaret Thatcher said: “The problem with socialism is that you eventually run out of other people’s money.”
Does it matter what the intellectual elite think? Since the financial crisis of 2008, many dozens of hefty books have been published proclaiming the death of capitalism, along with thousands of articles and speeches delivered by those who yearn for a vague system they call “progressive”.
Yet the economy has substantially recovered, investment is rising, more than a million jobs have been created and thousands of new companies started. In the real world, away from the ivory towers, free markets and trade are lifting tens of millions out of poverty and improving life expectancy. Meanwhile, communism and socialism have consistently failed.
But the words of university lecturers can influence hearts and minds, just as some are seduced by the idiocy of Corbynomics. Everyone from students to politicians can fall for this misinformed rhetoric. Capitalism is repeatedly blamed for challenges ranging from inequality to pollution. The Times reported last week on a YouGov poll that said more than 70% of those sampled in Britain, Germany, Brazil, India and Thailand think big business has cheated its way to success. A big reason why I write this column every week is because I believe strongly that frontline participants in business need actively to promote the practical and moral advantages of capitalism.
I am pleased to say that there has been an encouraging cultural shift in recent times. Whereas many of the brightest humanities students used to go into careers such as academia, journalism and the arts, now they see better prospects elsewhere. For many, the most fashionable option on top university campuses is to start your own business. Graduates may not approve of big business, but they see start-ups as the great hope. These recruits to the cause of capitalism see its advantages: the opportunity to control your own destiny, to create something exciting, to make a living — and perhaps change the world.