Cooking the Books: Responsible Capitalism? No Such Thing
In May we were interviewed to contribute to a short film on ‘responsible capitalism’ to be shown at a meeting of ‘investor relations’ professionals. Here are the answers we prepared to their set questions.
Why do you think capitalism is in crisis?
Capitalism is in the middle of an economic crisis because it goes through repeated cycles of boom and slump. It’s just that the present economic downturn is bigger and longer-lasting than the others since the 1930s. Despite what Keynes taught and what Gordon Brown claimed to have done, the boom/sump cycle cannot be eradicated. It is built-in to capitalism. There is another sense that capitalism is in crisis. The word ‘capitalism’ has become a dirty word. It has no inspiring vision of the future to offer. Its defenders no longer have the self-confidence they had 20-30 years ago. This is a good thing as capitalism really does have nothing to offer.
Are wealth creation and the good of society mutually exclusive concepts?
That depends on what you mean by ‘wealth creation’. Wealth is not created by entrepreneurs but by people working with their hands and brains to make things and provide services and, yes, profit-seeking and the pursuance of the good of society are mutually exclusive.
What’s your opinion on banker bonuses and executive pay?
That some bankers and top executives are ripping off shareholders. But, as Socialists, we’re not worried about that. It’s for them to fight out amongst themselves. It’s of no concern to those who work for a wage or a salary.
What should be the role of corporates and business in wider society?
It’s not a question of what should be but of what, given capitalism, has to be. Legally as well as economically, corporations are obliged to try to maximise profits. If one corporation didn’t it wouldn’t generate enough funds to invest in innovations to keep up with the competition. It would go under. The role of corporations and business in a capitalist society is to make and accumulate profits. That’s actually reflected and enshrined in company law, so that if the executives of a business decided to pursue some philanthropic or charitable aim at the expense of profits they could be sued by the shareholders.
Can capitalism really have a core social purpose? (Capitalism is nature-prone to create divisions and social strata)
No, capitalism cannot have any other purpose than the economic one of making and accumulating profits. It cannot serve any other social purpose and cannot be made to. It is based on a division of society into those who own and control the places where wealth is produced and those who don’t. This may not be the 1 percent/99 percent division popularised by the Occupy Movement but it will be something near to that, maybe 5 percent/95 percent. Yes, capitalism is nature-prone to perpetuate this class divide. Profits and riches accumulate for the few while the rest of us are rationed by the size of our pay cheque. The rich always get richer even if the rest of us don’t always get poorer (as we are in the present economic downturn).
Next steps, how do you see things developing?
We know how we’d like to see things develop: a growing worldwide anti-capitalist movement that will eventually end capitalism and replace class ownership by common ownership and democratic control and production for profit by production directly to satisfy people’s needs. If this doesn’t happen then capitalism will just stagger on from crisis to crisis while social needs and the good of society continue to be neglected.