Michael Gove

Goes off in praise of capitalism.

But, at the risk of being thought one horn short of a helmet, can I beg to differ? You can no more immolate capitalism than you can pronounce the last rites over the lifeless corpse of laughter. Capitalism, like laughter, is the expression of an ineradicable human instinct.

My belief in capitalism\’s durability is based not on any particular understanding of economics, no long immersion in Ricardo, von Mises or Friedman. It is based on my bewilderment in the face of mobile phone charms.

Sadly, everything he praises is a feature of markets, not capitalism.

When even the Tories are unaware of the differences between the two we\’ve got problems, haven\’t we?

12 thoughts on “Michael Gove”

  1. If we’re going to get icky picky, then you mean “free markets” not “markets”, no?

    Tim adds: No, not really. All markets are constrained, whether by legislation, custom, rules, regulation…

  2. Yes, but everything that Gove states is a hallmark of a free market, not a highly constrained one.

    BT (née GPO) used to operate in a market for telephone services, but no-one would say that pre-privatisation BT represented the expression of the ineradicable human instinct (unless you put sheer bloody mindedness at the top of the list of instincts).

  3. Actually, Tim, I think you’re overemphasizing the distinction. In common usage, the two are nearly synonymous. And, though the difference you cite exists in an economic analysis, the more common usage will suffice in Gove’s comments. I can’t imagine anyone being misled
    as to his meaning.

    And, in a certain sense, both capitalism and some system of relatively free markets could be viewed as issuing from some (as Kay Tie puts it) “ineradicable human instinct,” i.e., the one we call “reason.”

    Mr. Gove’s awe is inspireed by the fact that the same system that daily provides him with so many of the things that he’d like to have and at prices he doesn’t mind paying simultaneously provides others with things for which he has no desire whatsoever and for whose demand his wildest dreams cannot and could not comprehend. Amazing! But that’s just how it is–for all of us.

  4. Correction: it was Gove, himself (rather than Kay Tie) who originally used the phrase “ineradicable, etc.”).

    All of us have had the experience (and many have written about such experiences) of viewing some natural wonder so breathtaking or awe-inspiring that no words seem adequate to convey the feelings inspired, though words like “transcendental” or “ineffable” are pressed into inadequate service. In this sense, Mr. Gove has had such a moment in considering the multifaceted coordination of something–whether one calls it “the market” or “capitalism,”
    in both comprehending and fulfilling human desires.

    Some 130 years ago, Adam Smith thought he could see in the vista the work of an “invisible hand,” which he imagined must be that of God. But Gove’s experience is probably roughly similar, no matter that to which cause is imputed nor any difference in the eloquence with which it is expressed.

  5. At least he gets that they work, that they are the expression of people’s desires, and therefore, quite natural. Sadly, I don’t think his party leader really quite gets it.

  6. The problem with capitalism is that the term carries such negative connotations, but then frankly the same often applies to the market. Part of this problem is an inability of many even smart folk to make abstractions. By “market”, we simply mean the networks of relationships between people buying or selling services or physical goods. “Capitalism” goes further: it is about a system of economic production based upon the private ownership of the means of production. In the latter case, a capitalist system can have a lot of state interference with a market, as in the mixed economies of Western Europe, the US, Japan, etc.

    The real issue is freedom and the rights of people to hold property. That is where any argument about definitions needs to begin.

  7. Jonathan:

    Your first paragraph is fine. But the conclusion, “real issue, etc….” leaves much to be desired. Granted, it is the nucleus of the “natural rights” argument and the idea that freedom is the natural order of things, ordained by God, etc.

    But that argument, at heart, merely exposes opposing viewpoints, each based on belief to be considered beyond examination or criticism. History certainly provides plenty of examples to prove that bondage or complex systems of caste and economic restraints of many types have been common or even prevalent.

    The most impregnable view , i.e., the one I’d
    have resorted to, would employ the specifically Austrian School analysis proving that free markets work best in providing, without conflict, more of the satisfactions sought and that every interference must diminish those and, at the same time, introduce irreconcilable conflicts. This is a “scientific,” factual argument, depending for proof on an irrefutable chain of logical statements. But its conclusions are also amenable to the view of the very many called utilitarians, who are to be found among the adherents of many other economic views. The fact that the utilitarian argument is so widespread and dominant among those of every political persuasion is reason enough to stick to the proofs of Austrian theory and to spread its appreciation. It has the further advantage of putting opposing leaders “on the spot,” into the position of telling their followers, “our system is best, though it will surely result in making you poorer and lowering your living standard.”

  8. Another problem is some people have been saying the current crisis is one of capitalism, not markets, and yet that clearly is debatable. The herd-instinct of markets remains a problem at almost every level.

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