Capitalism has reduced inequality and improved the world, yet still it is under attack

DESPITE the First World War ending the previous November, the year 1919 was a very bad one. For example, the UK entered what was by far its deepest ever economic recession.

Output fell some 25 per cent between 1919 and 1921 as the economy attempted to adapt to peacetime conditions. The troops had been promised “homes for heroes”, but many of them received the dole instead.

Globally, the influenza virus which killed between 50m and 100m people in the years from 1918 to 1920 was in full swing. Scaling this up to the present day would give a figure of between 200m and 400m deaths.

Given the nature of much of the comment in the mainstream media, we might easily think that similar disasters were affecting us in 2019.

On the contrary, there is a great deal to celebrate.

In the UK, real GDP per head is now some five times higher than it was a hundred years ago. Even poor people today are comfortably off by the standards of 1919.

Life expectancy in 1919 was 55 years for men and 59 for women. Now, a new baby can expect to live at least 25 years longer.

Across the world, we see inequalities in living standards between countries being eroded. Then, only a small handful of western countries could be described as rich by the standards of the time.

Now, more and more nations are joining the club. Literally billions of people have escaped lives of unremitting drudgery, at income levels close to starvation.

All this has been brought about by the institutional structure of capitalism, of companies motivated, at least in part, by profit, operating in a market-oriented system.

Yet, incredibly, capitalism is under attack, often by those who are some of its most conspicuous beneficiaries. According to a 2018 YouGov poll, only 30 per cent of Americans aged under 30 had a favourable view of capitalism.

This is precisely the group which lives and breathes capitalism, not just through its material consumption, but through popular culture.

Last week, I was in New York and visited the Whitney Museum to see a stunning exhibition of Andy Warhol’s work.

It was Warhol who said: “in the future, everyone will be famous for 15 minutes”. He describes, prophetically, the world of the internet, in which self-styled anti-capitalist young people blog, tweet, and work their apps furiously to try to get their own 15 minutes’ worth.

The difference between capitalism and socialism is neatly captured in a video of the group Boney M currently available on YouTube. In the years around 1980, the band was massive, selling some 80m records with hits such as Rivers of Babylon and Daddy Cool.

In the video, the group is playing at the Sopot Festival of Culture in the then Communist-controlled Poland in 1979. The artistic audience gaze open mouthed at their exotic performance.

Socialism offered the Red Army choir and “Song of the Partisans”. Capitalism had Boney M.

A real effort is needed to re-educate people. Capitalism offers not just material wealth, but exciting popular culture as well.