The First Post: Repairing Capitalism

Capitalism is in a spot of bother, and many people are scratching their heads wondering what to do. Many on the Right are perplexed by the issue and worried about the implications. I received some generous feedback from some earlier pieces that I wrote for Conservative Home and the Centre for Independent Studies on how small government supporters might approach the issues raised, and I thought a (temporary) blog might be a good way to further progress the issue. Have a read of the essay below and see what you think...

Open Capitalism 

Most people believe that the level of economic inequality in their own country is too high, and in most countries this group counts for around two-thirds of the population[1]. This may be a strong feeling or a weak feeling, but the sentiment across developed countries is that a clear majority would prefer to see a reduced concentration of wealth.

The view that economic inequality is too high may be quite commonplace in the general public, but such a phenomenon runs counter to the thinking of many economists, esteemed thinkers and policymakers. For many years the standard assumption of mainstream economics has been that people are concerned with their own financial situation rather than their position relative to others. Provided no-one is worse off in absolute terms, goes this line of thinking, then expanding inequality should not be a concern. Economics is not a zero-sum game, and making high earners more wealthy does not harm the interests of those less well off. On these foundations, sometimes described as the classical liberal or neo-classical approach to inequality, many economists and policymakers have suggested that being concerned about inequality can only be inspired by irrational motives of either “bourgeois guilt” or envy.