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A Defining Budget III: My friend Bud

John Jackson
24 June 2010

Tony Curzon-Price > Nick Pearce > This post.

I have not yet spoken to him but I am sure that my friend Bud approves strongly of our Coalition’s budget.

Bud is a New Yorker whom I have known for many years. He is a lovely man and I am very fond of him but sometimes he takes my breath away. I was with him, in New York, shortly after the horror of 9/11. Like many in the U.S. Bud was angry, shocked and frightened. “What would you do?” he asked me. “I am not sure” I replied. “I am” said Bud. “I would nuke them. I would make Afghanistan so radio-active that it couldn’t hide a terrorist for a thousand years.” “But what about the people who live there?” I asked. “Oh, we’d give them warning, we’d pay them to get out.” “Oh Bud” was all I could think of saying. Bud ‘phoned me the next day to say “Sorry, I didn’t mean all that.”

Last year, when I was with Bud again, I remarked that I liked the look of Michelle Obama and the thought of the U.S. President going home each evening to such a sensible wife gave me a warm feeling. “John, How can you say that?’ was Bud’s response. “Isn’t she sensible?” I asked. “She’s a socialist, like her husband” said Bud. “The Obamas want to turn our country into something like England or France. That’s the last thing we need.” “How do you define a socialist?” I asked. “Oh” said Bud ‘that’s easy. A socialist is someone who believes in taking money from those who work and giving it to those who don’t.” “Hm” I said and changed the subject.

If we had continued that conversation I might have asked my friend how he would define a capitalist. I know he would have said “A capitalist is someone who believes that those who own capital should decide what is what and what should be done about it.” I would have agreed with that as reflecting an evident fact of life. And so would David Cameron, George Osborne and Nick Clegg. Every time that any of that trio have asserted this week “If we don’t do this, the interest we pay on the money we borrow will go up and that will make matters worse.” they are agreeing with Bud.

That does not mean that owners of capital are ‘activists’. They rely on ‘the market’ - their market -  to decide how much money, and on what terms, should be invested in/lent to those who need it. That is how capitalism works. And those who determine the market’s decisions exercise hugely important judgements as to what is what. If they get it right we applaud them, call them the Financial Services Industry and accept their bonuses: if they get it wrong we stand them in the corner, call them Bankers and tax them.

The evidence suggests that capitalism is, by far, the best system yet devised to create wealth. And, for a whole range of obvious reasons, wealth creation is the crucial determinant of the future of humankind. But the evidence also suggests that capitalism is not a system which produces the ‘best’ answers on how that wealth should be used or distributed. This is because of the “social’ dimension: the world is populated by human beings, not banknotes. And that leads to what, arguably, socialism – the recognition of the social dimension -  in a capitalist world needs to be.

It is not possible to use capital to create wealth without creating also inequalities. Perhaps it is the proper function of socialism to influence the use and distribution of the wealth that is created so as to remove or reduce those inequalities and their consequences.

My friend Bud would not go far down that road. “ Inequality is good” he would say. “ You need it, a lot of it. It provides motivation. People fight to get themselves out of the trough. It’s a good thing.” That was, of course, the essence of Norman Tebbitt’s ‘get on your bike’ approach and, particularly insofar as the budget restores inequalities, seems to be reflected in much of what our Coalition is saying. Being told “We are all in this together” does not hold much appeal to those at the bottom of the inequality scale. It will be a factor - possibly a dangerously divisive factor - in our national life for many years to come. Bud will believe we are on the right track. I believe we should think again.

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