A FEW years ago, Britain was ridiculously complacent, blind to everything that was going wrong in the economy, determined not to notice the irrational exuberance, the monetary pump-priming, the fiscal profligacy, the epidemic of stupid decisions and the deliberate malfeasance. We were a nation in the grip of an insane bubble yet anaesthetised by cheap and easy money. Many thought the City, which was delivering jobs and tax receipts, couldn’t get anything wrong. Today, the pendulum has swung too far in the other direction, with hatred, envy, class war and extreme suspicion of all businesses and the corporate world reaching corrosive and dangerous proportions. Now most people think the City can never get anything right, that most folk who work in finance are crooks, cowboys or don’t pay taxes. Needless to say, that is nonsense.
The trouble in Britain is that we are never able to strike the right balance. We either love or we hate. Yet one can like and support business and the City, as this newspaper does, while keeping one’s eyes open, remaining realistic about the limitations of human nature and deeply disapproving of certain kinds of behaviour. The case for capitalism is not based on the assumption that human beings are perfect. And while certain aspects of business need to be reformed, we focus too much in today’s Britain on scandals and all that is wrong with business – and not enough on what is right, on the success stories and the job creation. We also forget about all that is wrong with government, and how counter-productive politically-motivated official action often is – for example, deranged capital standards that artificially promoted risk-taking during the bubble, laws that encouraged sub-prime lending in the US (and new ones that may do so again in the UK) or monetary policies that fuelled housing bubbles (and will doubtless do so again).
We should be discussing the good as well as the bad about business. One example of the former is how the City remains a powerful force for meritocracy and social mobility: a survey of 1,655 City workers by Astbury Marsden shows that the workforce in London finance is now extraordinarily diverse, with minorities and immigrants employed and empowered to a much greater degree than in other sectors. In this case, the market is doing more to help outsiders than any government programme. We must remember that capitalism is a powerful force for good.