Capitalism has been asked a fundamental question by coronavirus: Is it still the best way forward?
The truth lies somewhere in the middle, between the incoming post-capitalism serendipity some would have you believe is now inevitable and the continuation of free-market economics and the status quo. The current crisis has shown the weakness of the status quo but that does not mean it should be consigned to the scrap heap, and as we ask questions of the system we must remember the good that it has done not just recently but in the long term as well.
The best we’ve got
Looking through the perspective of Sports Direct, Amazon and Starbucks it would seem that capitalism really is evil and destine to fail. But we cannot escape the fact that our economy is not simply made up of these few companies.
Critics of capitalism promote the idea of ‘disaster capitalism’, but this ignores the many companies that have acted honourably during the virus, as well as examples of capitalism pushing companies to do the right thing through supply and demand economics. Rather than exploitation, as this article suggested, many companies have reacted to the crisis to the benefit of consumers, public health, and the NHS. For example, BrewDog, a company producing alcoholic drinks, innovated by changing their production line to make free hand sanitizer for NHS workers. How awful of them!
There are also examples of pharmacies that have profited off the crisis before accepting that due to public pressure they would have to change course. I would go so far as to call public pressure, capitalism at work. Companies understand that they need public support to survive and that as consumers become more savvy, acting in a way that consumers would approve of is a necessity. Other evil and malevolent acts that companies did during the height of the pandemic include Burberry donating 100,000 pieces of PPE and giving the profits to food poverty charities, whilst their top executives took a 20 per cent pay cut. But of course this hardly fits the narrative of the doomsayers of capitalism.
Some will claim that these positive acts are merely to improve brand image in the long run. I say: so what? These acts saved lives and improved the health of some of the most fantastic people, including our beloved health workers. Why begrudge this positive impact — irrespective of the reasoning behind it. Health worker also saw a huge effort to ease the burden of their fight against coronavirus. It seemed every coffee shop on earth was providing free drinks to help them on their way; yes, even Starbucks. The company Airbnb provided over 100,000 members of the health service with free, clean and safe accommodation so they could be closer to their place of work. The NHS badge is a wonderful example of the government working with companies to manipulate capitalism and help those who need it at the most crucial moments.
No doubt you have heard of the phrase the ‘new normal’ over the past few weeks, but does this new normal mean a veering away from capitalism and into the hands of another system? Unfortunately for the hammer and sickle- wearing fanatics, this simply is not going to happen. We have seen the despicable treatment of Uyghurs Muslims in China, the democracy-defending protests occurring in Hong Kong and the breakdown of government in Venezuela in recent times — events occurring within countries following or under communist social ideas. It’s unlikely to warm the average person to communism.
The issue with many who push the idea of ‘disaster capitalism’ is the claim that the alternative is simply perfect and without flaws. The idea bing that once it’s in place you cannot go back. Whereas the market economy is both fluid and changeable, and so far from perfect. It’s merely the best we’ve got. Those that think this way also believe that the best thing about capitalism is that you can vote for communism.
A flexible system
When we look over the past few months, we can see that certain measures put in place by governments across the world have looked less and less like the capitalism we have grown to know, including some very interventionist policies from the UK Government. However, I would argue that this is part of the brilliance of capitalism in that it is not static or stubborn, but an ever-changing pragmatic approach. When intervention is required the government steps in, and when it is not the government steps away to allow the free hand of the economy to take control once again. This is the economic centre-ground and golden middle working at its very best, far removed from the extremes and dangers of complete free-market economics or communism.
Not basing our actions and fiscal policy on an austere ideology is the best way forward due to the pragmatism and progressive debate this brings.
It is easy to see why in this difficult and testing time we could be tempted to jump and criticize, and declare the end of the system as we know it. Capitalism clearly has its flaws and downsides. But this quick get-out clause where we blame everything that is bad on capitalism and the current market-based system, is both misleading and imprudent. The truth is that matters are far more nuanced than this. Without the wonderful innovation that capitalism brings we would not have had zoom to connect with our loved ones; we would be without the drugs that saved many lives; a potential vaccine would be that much farther away; Netflix would not have existed to keep us upbeat and entertained; and the ability to criticize the government on our many social media platforms would be wholly absent.
Reform is necessary and long overdue, but the idea that radical change is the answer would be the wrong conclusion to make. As the economy adjust and we move forward into the new normal there will be many changes. But the market economy and its Keynesian ideology is here to stay, and must stay.