‘Greed is good’, revisited

Boris Johnson’s claim that the vaccine programme is a triumph of self-interested ‘capitalism’ has been roundly condemned; I don’t think I need to explain why it’s simply not true in this context.  It has spurred me, however, to come back to the broader argument, that we owe our prosperity and living standards to private enterprise.  That argument has been vigorously restated in support of Johson, for example by Rod Liddle in the Sun: “this is what brings about progress in society”.

It’s an argument that goes back at least to Mandeville – private vice leads to public benefit – but it’s most often cited from Adam Smith:

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages”

That much is clearly true, as far as it goes; I do not want to take anything away from it. However, it’s only one aspect of our current standard of living in the UK.

If we look back at the things that have made our lives better than it was in Adam Smith’s time,  there are a few other things to consider besides butchers and bakers.  First, there’s the fabric of public space: roads, drains, pavements, street lights. Second, there are the standards and services that govern our private space: housing standards, sanitation,  sewerage, waste disposal, water supplies, and energy supply.  Third, there are the services and facilities which shape our daily lives: education, health, social security, and housing.   (The last one on the list deserves a reminder: we built six million council homes, and most of them are still standing even if they’ve been privatised or transferred to new management.)

It’s become commonplace for the advocates of free markets to claim that we owe everything to private enterprise.  That claim is false.  In some cases, governments paid private enterprise to provide goods and services; in some cases, such as agriculture or energy supply, they kept services going that would have collapsed otherwise; in some cases, they produced the goods directly.  All of the examples I have given were, at least to some degree and in some cases predominantly, the result of collective social action.  Not private enterprise, not self-interest, but government.

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