‘On Capitalism…’ – Guardian’s Zoe Williams Talks to Abundance

“On capitalism we lefties are clueless – it’s not just a rightwing caricature” is the headline of Zoe Williams’ comment piece in todays Guardian. She wrote it following a discussion with Bruce Davis who, she explains, is about to launch Abundance – an investee company of Panahpur. It is well worth reading and is reproduced below:

“Imagine if everything the right said about the left were true. All the personal stuff – where we’re never quite hair-shirted enough to be truly leftwing; or if we are, then we’re unbearable – I don’t mind. I am big and ugly enough to stand accusations of being patronising and naive, of not understanding economics and having a beard.

But there are specific charges laid against not just socialism, but all left-leaning politics, that if true cannot be waved away. In the broadest terms, where leftwing equates to an over-weening state and a bloated public sector, we are against enterprise: not only does the left fail to innovate, but it strangles innovation in others; it is very good at spending money, no good at generating it; when it sees other people generating money, all it can do is whinge; its ideas produce this circle-jerk economy where the money just passes from the bureaucratic state to the inert individual, then back to the state. Nothing is produced; nothing ever grows.

This is a caricature, of course, and some of it you could disagree with straight off – the economist Mariana Mazzucato wrote a dazzling slim defence last year of The Entrepreneurial State, which she kicked off by demonstrating that the private sector has its own deficiencies in the area of enterprise, it is quite risk-averse, and new technologies often could not get off the ground without state support.

“How many people,” she writes, “know that the algorithm that led to Google’s success was funded by a public sector National Science Foundation grant? Or that molecular antibodies, which provided the foundation for biotechnology before venture capital moved into the sector, were discovered in public Medical Research Council labs in the UK?”

There’s an argument I’ve heard in sectors from wind energy to IVF that the problem with the state is not that it won’t fund innovation, but rather that it illogically funds the uphill slope, then backs off to let the corporate sector do the fun bit.

However, there’s some truth in the caricature that I can’t budge: looking at Emma Harrison, the disgraced former chairman of A4e, I can’t help thinking: where is her leftwing counterpart? Where is the person who tried to win those government contracts (and, let’s remember, welfare-to-work was originally a Labour project) not for their own financial aggrandisement, but because there was work up for grabs and they thought they’d do it well?

And, to ask some larger questions: how is it that we complain like mad about banks and yet continue to bank with them? How is it that we object so vehemently to the 1% having all the money, and yet persist in giving them our money (no, not from governments, but from our own pockets, our own savings, our own pensions)? Real wages in this country have been falling since 1968. Muhammad Yunus‘s ideas – that poverty can only be ended by the horizontal economics of production, not the vertical economics of consumption – have been around since the 70s. Where’s our micro-credit? Where are our horizontal exchange enterprises? What’s taking us so long?

Immediately I feel I have to make the case against micro-finance, distilled by some startlingly horrible cases in which people were driven to suicide by Indian micro-lenders’ loan-shark tactics.

But that doesn’t dent the main point: at the moment in this country, I’d go as far as the developed world (how long we stay “developed” is an open question), the left cannot deal with the idea of capital. Faced with a project for which investment is inevitable, it either parcels it out to the private sector, in one of those heads-they-win, tails-we-lose arrangements we’re all now familiar with. Or it comes up with a concept like the community interest company, in which numerous caps and controls are attached to the raising of capital, as if in embarrassment – as if a social enterprise that actually made money would be a source of shame. Maybe that shame would be warranted, but enterprises that don’t make money often fail.

This isn’t to say there are no solutions, just that solutions aren’t coming from politics: they’re coming from people like William Davies, with his work on employee ownership; and Bruce Davis, one of the founders of Zopa (a micro-lending site that now holds 3% of the UK’s personal loans), who will shortly launch Abundance, a company that allows you to invest in renewable energy projects instead of ISAs.

Davis does not self-identify (as the sociologists have it) as a leftie: but then he describes his aims. “What we’re trying to do is free ourselves from the two blueprints: the socialist utopia where all capital is dangerous, versus the dogma of the market, where somehow gambling is the same as making decisions. We’re saying there’s a middle ground. You can create markets which are essentially re-embedded in society. You can’t just cede money and capital to the right-wing. That’s like saying ‘the internet belongs to the right’.”

I want to whinge about unfettered capitalism. I was raised to moan about conservatives, this is the work I was born to do. But it is more fruitful, and more urgent, to “carefully observe those good qualities wherein our enemies excel us”. (It’s Plutarch. I know, I thought it was from Borgen as well)”.

  1. Ok so what happens if the government do another u-turn?

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