Big business or big government?


Recently I recorded an interview for a programme called Marx Reloaded on Germany's ZDF television. The producers assured me that there had been a revival in Marxist thinking since the 2007/08 financial crisis. I can't say I had noticed, and would be dismayed if they are right. There certainly was a good deal of criticism of the banking sector in particular, and some fears that the capitalist system was looking less robust than most non-economists thought it was. And there have been calls for more government regulation and intervention, right enough. But actually we defenders of free markets have come out of it all pretty well. Ordinary people have quite correctly concluded that while the bankers have much to answer for, the politicians have a lot to answer for too. And in intellectual circles at least, there is a growing view that fresh regulatory programmes are not the answer. International agreement on bank regulation, and proper enforcement might be the answer, but some of the regulations did more harm than good and many of the regulators were pretty useless.

Still, the interview made me focus on some of the traditional criticisms that Marxist philosophers have made of the capitalist system, and one of them that has picked up strength recently is of course the idea that big business in general, and now big banks in particular, have enormous power over our lives, and shouldn't that power be controlled and exercised collectively?

Thinking about the question made be realise quite starkly that even the biggest, most bloated capitalism actually has precious little control over my life. I don't know about yours, but I'm pretty sure the same is true of you. In the free market system, the power of any person over any other is pretty small. Because they have the threat of fines and imprisonment to back them up, minor officials can bully and threaten us outrageously – like the one from Revenue and Customs who phoned me the other day to complain about some minor mistake with a form. Even my local council officials can serve me with a spot fine for dropping litter and put me in jail if I refuse to pay it. However much we complain about bankers on big bonuses, they can't do that.

If these officials were all benign and enlightened servants of the public, such power might be tolerable. But they're not. Marx was right, groups have their own self-interest, and we need to think about the self-interest that motivates national and local government officials. Yes, they maybe want to make the world a bit better, as we all do. But just as we in the private sector are motivated by the prospect that, if we make people's lives a bit better, they might just pay us money for it, theirs are motivated by the incentive to make people's lives a bit worse. The HMRC officials get better promotion and pay if they meet their targets for getting our forms and our cheques in on time and all properly filled out in the regulation ink. The local government officer too attracts the admiration of superiors for an outstanding 'compliance' record of fines and prosecutions. And because the last government made just about everything an offence, from smoking on windswept station platforms to selling a squirrel, there is probably not one person among us who is completely immune from the possibility of being fined, prosecuted or imprisoned.

If such petty officials have so much power over us, just think how much power our national politicians and officials wield. They can make or break careers, and businesses, and industries. In socialist countries with an even more extensive state apparatus, officials and politicians have all this and more. No, give me the free market system any time. Despite all the worst efforts of our bankers, we have a lot less to fear from them than we do from the political classes who really do have power over us.