Comrade Cable and Capitalism

Oooo, looky - Vince Cable - former economist to Shell - is going all anti-Capitalism:

Cable said: "Why should good companies be destroyed by short-term investors looking for a speculative killing, while their accomplices in the City make fat fees? Why do directors forget their wider duties when a fat cheque is waved before them? Capitalism takes no prisoners and kills competition where it can."

Let's be pedantic for a moment - first of all, capitalism doesn't do anything. No, really, it doesn't. It is a concept, a human construct. Capitalists make take no prisoners, and kill competition when they can - capitalism doesn't. Blaming capitalism for the behaviour of some capitalists is a bit like blaming the concept of a knife because some people stab other people.

But let's break down Cable's sudden aversion to capitalists. He is against people making anti-competitive speculative killings in investment deals. Yeah, that must be frustrating, but what's the alternative? Banning short-term investors? Limiting them to only certain types of activities of which Cable approves? The solution to what Cable considers to be a problem is government intervention and regulation. Ho-hum. He really should have stuck with the Labour party; they're the ones who lap this sort of shit up.

Then there's the notion that directors forget "their wider duties" when there's the chance to make money. But what, precisely, are their wider duties? Their sole duty, surely, is to make money for their companies. You could argue that they also have a duty to their employees, but that too is a duty best served by making money for the company. That is, after all, the nature of business. It is about making money. Talking about the "wider duties" of directors is astoundingly naive - particularly for someone who used to work for one of the world's largest oil companies.

But there is a need to be wary of the death of competition in capitalism; this creates monopolies, and these are sometimes deeply problematic for wider society. However, the problem is how we stop the growth of monopoly. I have no doubt about what Cable's answer to this problem would be - state intervention. But, of course, the problem is that state intervention doesn't end monopoly - in fact, more often than not, it creates state-sanctioned monopolies that are just as negative as the naturally occurring kind. Furthermore, government intervention creates client companies - those who exist primarily to sponge of the tax-payer's money (yes, Crapita, I'm looking at you).

Now, I don't have an answer to the problem of competition. Indeed, inherent within competition is the notion that someone will win - which could lead to monopoly. It strikes me that what Cable is belly-aching about are actually very natural - if not particularly edifying - parts to human nature; greed and competitivieness. I don't know what should be done - if anything - in order to deal with the worst excesses of these aspects to humanity. However, I am pretty sure that a recourse to crude socialism and state control is not the way to deal these potential issues. Because what Cable is saying is that greed and competitiveness are only a problem if people like him can't decide who's allowed to be greedy and who can win the various competitions within capitalism.