One thing that irritates me is the tendency of many on the right to conflate capitalism and markets.
They are, in fact, two different things: capitalism is a system of ownership; markets a method of exchange. Although the two have sometimes gone together, this need not be so. Crony capitalism in which a few monopolies or cartels run much of the economy gives us capitalism without markets. And market socialism would give us markets without capitalism*.
I say this because Danny Finkelstein in the Times today makes exactly this error. He writes:
David Bowie – undoubtedly one of the artistic geniuses of the past 50 years – was the great product and great producer of consumer capitalism…He was subversive because capitalism is subversive, overturning the status quo, restless, and profoundly democratic.
I disagree. It is markets that are subversive; capitalists would much rather keep the status quo and the profits rolling in.
Danny says that Bowie “was possible because in a consumer capitalist society nobody can ultimately stop anybody doing anything.” But surely the word “capitalist” is superfluous in that sentence?
Put it this way. A market socialist society might, I suspect, have given us Bowie: it certainly would have if it were well-functioning. But a non-market capitalist society might not, precisely because he was so damned strange and unpredictable. Would the early Bowie have succeeded on the X Factor? Would a tightly managerialist-hierarchical capitalist record company tolerate an artist moving from folk to prog rock to glam rock to soul and to electronica within a few years? Or would it have insisted that he be more like David Cassidy? Would it have retained an artist who went 11 years without delivering a number one single?
It’s possible that Bowie thrived because record companies in the 70s weren’t rigidly capitalistic but instead tolerated diversity and disruption.
But did he thrive? In the mid-70s, he was close to bankruptcy. He only became wealthy after setting up his own management company. This tells us a lot. People don’t become rich by merely by being creative. They get rich from ownership rights: in was only when Bowie claimed these that he prospered. In this sense, capitalism is a means of exploitation.
The conflation of capitalism with markets irritates me because I suspect it is a means whereby the right smuggles in support for inequality. Many of the virtues it claims for capitalism are in fact the virtues of markets, and in conflating the two the right thus gives the impression that the case for capitalism is stronger than it in fact is.
I don’t say all this to attack Danny: he’s one of my favourite columnists. I object to his mistake because it is a common one (though not ubiquitous: Tim Worstall has avoided it).
However, what I object to just as much is that a lot of the left have allowed the right to get away with this. It too has failed to distinguish sufficiently between capitalism and markets, and has spent too much time attacking markets** when in fact it is capitalism they should have been attacking.
* I wholly recommend Chartier and Johnson’s Markets Not Capitalism (pdf) in this context.
** In saying this I don't of course mean to suggest that actually-existing markets are anywhere near perfect.