Sajid Javid is a businessman and private investor. He was previously a senior Managing Director at Deutsche Bank AG. In this Platform he argues that the current wave of state intervention must not be permanent, and that Anglo-Saxon capitalism is essential for our prosperity and liberty.
Every Christmas I attend a reunion of old school friends from Bristol. The talk often turns to politics, as my friends know my interests all too well. This year, after a bout of banker bashing, one friend stated: “capitalism is dead!”. Admittedly, by this time my friends had consumed a few drinks, but it still startled me to see others nodding their heads.
Upon reflection, who can blame them? It’s what they see. We have nationalised much of our banking industry. Government spending has rocketed. Taxes are up. Regulation is back. Class war is encouraged.
Capitalism is in a good deal of trouble. State intervention, control and ownership - in the UK and beyond - is back in fashion. But over the past 150 years, capitalism has more than proved its worth. The parts of the world where it has been let loose have flourished; the parts where it has been held back have languished.
The importance of capitalism is not just driven by economics. A critical reason why capitalism has been such a success is that its sits well with human nature – our desire for liberty and prosperity. Communism eventually collapsed because it relied on a total restriction of individual freedom to survive. It murdered millions just to avoid criticism.
As long as people want to improve their living conditions, earn more than their parents did, own their own home and car, go on holiday, travel the world and buy cool, but perhaps even useless, things, they will need a mechanism that allocates scarce resources far more efficiently than a repressive state. Capitalism is not perfect, but if you want prosperity and genuine freedom, it is essential.
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