17 Aug

Capitalism, wot capitalism?

A report claims that, under our unfair capitalist economic system, the wages of senior executives are 183 times those of their workers. But now here’s a funny thing:

“in the second half of the nineteenth century, when Marx’s dreaded capitalism was at its peak, robber barons were at their most oppressive and, according to Freedom House, democracy did not exist, the average ratio of income earned by US corporate directors and their employees was 28:1. Yet in 2005, when history had ended, democracy was in full bloom and egalitarianism proudly reigned supreme, this ratio stood at 158:1 (a study jointly conducted by MIT and the Federal Reserve). – Democracy as a Neocon Trick by Alexander Boot.

In other words, western economies are much more socialised than they were a hundred and fifty years ago. Today governments control the economy to a degree undreamt of in Victorian times. Taxes are higher and there is considerably more public spending – and yet the pay ratios between the top and the bottom are more extreme.

How much capitalism do we actually have?

50% of Britain’s GDP goes to the public sector. In so called communist China it is only 17%. At the height of their totalitarian tyranny, the Soviets were only spending 10% more than we do today. Never mind the anti-capitalist rhetoric, examine the facts. You are taxed on your wages. Then you pay 20% VAT on nearly everything you buy with the money on which you have already been taxed.

Fuel taxes are at an outrageously high level. If we have a car we pay road tax. If we drink or smoke, the price of our pints and fags are artificially inflated by taxation. Governments ask people to save, so to reduce the burden of taxation. But the prudent who do save are paid little or no interest. In fact, with rates as they are, savers – especially among the older generation – are actually losing money by their thrift. If we do save, we are taxed again on the meagre interest

If we do our bit by buying shares in British companies, we are taxed on our dividends. There are further taxes on share dealing. The state broadcasting propaganda department fiercely polices an annual tax called the TV licence. The industrial, commercial, financial and manufacturing companies which generate income for the country pay large sums in Corporation Tax and other business taxes. And, in the form of Inheritance Tax, we have to pay up again even when we’re dead. British businesses which ought to be leading our economic recovery are prevented by labyrinthine corporate and state regulation.

Is this what today’s report calls “capitalism”? These levels of taxation and regulation are combining to hinder economic recovery. And such taxes are required only because the government needs them to pay for its massively expanded army of civil servants, its quango mountain, its legions of useless box-tickers, its lousy education system, the failing and scandalously corrupt NHS, and its bloated state welfarism. Then there are the orchestrated protests against “the cuts.” The truth is that this government will be borrowing and spending more when it leaves office than it did when it came in. Whatever economic and social system is currently being operated in our country, it is not by any shadow of meaning capitalist.