The June election gave Jeremy Corbyn and his team a hunger for...
This year’s party conferences have highlighted the ideological differences between them more starkly than usual. Jeremy Corbyn and his supporters are seen to have seized control of the party and taken it in a more socialist direction. That has prompted senior Conservatives to reiterate their commitment to capitalism.
In his conference address, Philip Hammond affirmed that whilst a market economy is not perfect it is “The best system yet” He argues that without profit-making businesses there would be no cash for schools, hospitals or pensioners. His Labour opponents would reply that there is clearly not enough cash for those schools, the NHS and social care provisions for the elderly.
Whilst many aspects of Government remain the same whichever party is in office, there are major ideological differences between capitalism and socialism. Capitalism is an economic system rooted in private ownership of the means of production and distribution whereas in socialism the means of production belong to all the citizens, at least in theory. In practice the Government makes all the decisions and the citizens have little say in how they are managed.
Critics of capitalism point to the gross inequalities it tends to produce. Successful bankers are awarded huge bonuses, whilst at the other end of the spectrum those paid the national minimum wage can barely feed their families and heat their homes. The growth in foodbanks is another sign of this inequality. Schools, hospitals and care homes struggle to recruit and keep staff because of low pay rates whilst those in the private sector are normally paid enough to live comfortably. The same critics also point to the exorbitant prices drug companies charge for life saving drugs. This is made possible for the lack of competition in their industry. People with severe physical and mental impairments are rarely well cared for in a capitalist system.
Socialism also has its critics. They say that in a perfect world socialism would allocate resources on the basis of ‘from each according to his ability to each according to his needs’, but we don’t live in a perfect world. People need incentives to work hard and if everyone receives the same regardless of his or her performance there is no incentive to perform well. They also question whether Government bureaucrats are equipped to understand and identify the needs of every individual and household. In practice, socialism has too often descended into corruption and tyranny. The USSR, China and North Korea are obvious examples. British Conservatives regularly remind us socialism spends more than it raises in taxation and ramps up the national debt.
In Britain we don’t have a pure form of either capitalism or socialism, but a compromise. The Government spends in the region of 40% of GDP, whilst companies and individuals decide what is produced through market processes. This modified version of capitalism has not worked well and the need for austerity since 2010 has been one result. There is a need for fresh thinking that enables us to provide sufficient housing, proper care for vulnerable people and an adequate health service without ramping up the national debt or eroding family and community structures. Theresa May seemed to envisage this in her first speech as Prime Minister but nothing has emerged since to match her words. We need to keep the disciplines of the market but find ways of achieving greater fairness in the allocation of wealth and opportunity. From a Christian perspective that is about loving our neighbours and ensuring they are not impoverished and dehumanised.