Capitalism Should Not Be Run By Capitalists

Last year, the British journalist Charles Moore caused a stir in conservative circles when he asked: Has the Left been right after all? Now, he sat down with Martin Eiermann to discuss contemporary conservatism, the future of Europe, and the comfort of original sin.

The European: It is easy to sit here and say to conservatives: You are wrong. Your values and your political beliefs are in crisis. Is your world view showing cracks?
Moore: I don’t think that conservatism is in a political crisis. During a recession, people tend to vote for conservative parties. Whatever party is in power at present loses.

The European: In Germany, France, and the UK, the conservatives are in power, and not doing very well.
Moore: I don’t think that the sense of crisis stems from electoral defeats, nor do I think that the Left has good ideas either. But there is a crisis. It appears that a lot of the conservative ideas that have been articulated in recent years are in trouble, and it always matters for political parties when their ideas are in trouble. It might take some time, but eventually weak ideas will weaken the party that embraces them. What people think is that free markets and the capitalist system have been discredited. That it is very understandable. Marxists have always said that the idea of the free market is a fiction created by capitalists to justify a system that benefits them and makes everyone else suffer. It appears as if that is what happened. Banks made a lot of money for bankers and lost a lot of money for shareholders and taxpayers.

The European: It seems to me that the crisis extends beyond a strict focus on markets. Religion has traditionally been an anchor for conservatism, but the influence of religion seems to be on the decline. In the context of gay rights or environmental regulation, conservative ideas are increasingly out of step with popular opinion.
Moore: I think it is true that conservative ideas have to be articulated differently. The state of capitalism has been misrepresented. If you are a true believer in the free market, you are – as Tony Blair put it – on the side of the many, not the few. Adam Smith’s argument was that transparency and the rule of law are important for free markets to function properly. Markets should not be controlled by the capitalists because their interests are not the same as the public interests. But here is the real problem: Everyone has gotten rather confused about the balance of liberty and authority. British conservatives are very keen to appeal to the nation-state. But free trade and the European Union have subverted that order. The EU is essentially opposed to the political unit of the nation-state, and conservatives instinctively feel threatened by that. The British government has decided that the Euro will collapse, and it tries to stand in the right spot when it does. The assumption is that Britain will ultimately benefit from a collapse of the Eurozone.

The European: German conservatives tend to be very pro-European. So is this a conservative confusion or a British peculiarity?
Moore: It’s an Anglo-Saxon thing. The whole human rights discourse presents a certain threat to our political liberty because it transfers authority from our own elected representatives to a foreign jurisdiction.

The European: Would you be more in favor of the EU if it had more democratic structures?
Moore: Yes, in principle, but No in practice. In order to have these structures, you need a demos – shared assumptions about culture and history – that does not exist in Europe. The European Parliament is merely a pretense of democracy. The crisis of the Eurozone is now vindicating a lot of British sentiments about the problems of the European Union. What we said about the EU in the late 1980s has turned out to be right, and for almost the exact reasons that we mentioned. What we have not been able to do is answer questions about the balance between free trade and the independence of the nation-state. Mervyn King said that “the big banks are global in life but national in death.” They come home to die, and we have to pay for their funeral. That is a very bad situation and leads us to espouse a vaguely Marxist view of the world: the view that decisions are made at the international level without taking our interests into account. The way the EU is run is essentially an international elite that gives each other jobs and pensions. And when they make a mess of things, they try to run the countries that have been messed up by their policies. For example, the current Greek government has never been elected. That is very alarming.

The European: What about the argument that the financial deregulation of the 1980s – especially in Britain under Thatcher and in the US under Reagan – set the stage for unchecked markets, resulted in a loss of popular oversight and has contributed significantly to the current crisis.
Moore: There is some truth in that, but I would not want to blame Mrs. Thatcher too much. Back then, the City of London was run like an exclusive club where only accepted members were allowed to operate freely. It also meant that you could not get enough capital in – so it made total sense to liberalize that. When you liberalize something, you have to deal with unintended consequences. Back in the 1980s, the distinction between commercial banking and investment banking was still very much in force. The former was rather boring, and the latter was where all the excitement happened, and they were never supposed to meet. When the banking system was liberalized, nobody thought that commercial banks wanted to get into investment banking. But gradually they did, especially under the Labour government. Blair and Brown wanted prosperity and economic freedom but they did not understand Thatcherism and they were too naïve in their attitude towards banks and wealth. There is a famous remark by Peter Mandelson, who recently said that he didn’t mind people getting “filthy rich” as long as they paid their taxes. That is a silly remark. Labour worshipped people who were rich and became very dependent on bank money. The lesson of Thatcherism is that she was always very vigilant, always walking on the walls, scanning the horizon to see who might attack your city. She did not have much faith in banks and thought them selfish. She was concerned about debt and always preserved a sense of risk.

The European: Except it turns out that some of the risks of deregulation were completely underestimated.
Moore: Gordon Brown famously said that he wanted to put an end to boom and bust. But anyone who understands markets knows that you can’t really do that, and that you should not be trying. That is like having a weather forecast and saying that you want to get rid of rain and sunny intervals – both are bound to exist, and there is a relationship between them. What you can do is mitigate the consequences. But it is obvious in the language that the people in power did not understand the problems with which they were faced.

The European: But is this just about government failure? Sure, Friedrich Hayek talked about the “pretense of knowledge” in terms of government inabilities to regulate markets. But if the last years are any indication, the same might also be said for market actors.
Moore: Tories have always had a belief in markets that was tempered by other things. The charming thing about markets is that they often function without our understanding of why. Trade works because people are trading. But we also need a framework of laws, morals, and shared assumptions around them. Sometimes, it has to be policed by the government and we have to ask: Is this serving the people and the nation? The mistake of Thatcherites is that they did not pay enough attention to market failure, because their experiences were mainly with state failure. We are all products of our time, after all.

The European: So the question becomes: Regulation is good, if…"
Moore: If it gets to the heart of the problem. This is not a question of too much or too little regulation, but of regulation that is adequate to the challenge. Privatization hasn’t worked very well for public utilities like water – the customers are being cheated – but it has worked very well for phone companies or airlines. What is striking is that the Left has not really been successful at producing an alternative to the model of liberalization.

The European: You already mentioned the idea of shared assumptions. Could it be that neither the Left nor the Right know what assumptions to appeal to? Religion has lost its grip on public discourses, but the idea of social democracy has also been tarnished. If anything, there seems to be a broad consensus that political parties have disappointed the voters.
Moore: The success of a society depends on traditions that politicians can hardly change but easily harm. That has happened. The Right tended to win the economic arguments, and the Left tended to win the social arguments, even though they ran against established traditions. Indeed, there seems to be an unholy alliance between international greed and Leftist ideas about personal fulfillment and liberation. And here is the problem balancing tradition and change: As soon as you start to consider things as alright, you become negligent until they are not alright any longer. When people began to speak out against marital oppression, the reaction was a certain indifference to marriage. It turns out today that when fifty percent of the population are not married, a large majority will actually be married to the welfare state. Yet fifty years ago, it was assumed that the state did not have to advocate marriage, that churches and friends would help to raise children, et cetera.

The European: It seems to me that during the last decade, conservatives were particularly out of touch with public opinion on social and cultural issues. American conservatives now question the validity of science and evolution – as if the Republican party had been commandeered by the reckless and the clinically insane.
Moore: One thing that happens when things go wrong is that some people become too extreme in their reactions. On some issues that are discussed in the US, I take the conservative view. But I am surprised by how extreme the debates seem. I am opposed to gay marriage, but that issue will not dominate all my thinking. It is a pity that the question of abortion has become a shibboleth that decides everything. That kind of discussion is too polarizing. The trick of conservatism as a disposition is that it should have pessimism of the intellect and optimism of the world.

The European: A sentence that comes from a Marxist…
Moore: Right, Gramsci. Most ideas for human improvement are very laughable. But that does not mean that you should be filled with anger and despair; rather, you should work quietly to make things better. Conservatism can be tempted into rage, but that is a useless emotion. President Obama is doing pretty badly, but the criticism he faces is misplaced in tone. Republicans who portray him as the devil are doing him a favor, because that simply does not make sense. But our problems here in Britain are a bit different, aren’t they? British conservatives are not driven into a corner from where they shout. They don’t quite know where they stand at all.

The European: Do you think this is a failure of knowing where to stand – or is it that you know your convictions very well, but that the things you believe have become poor foundations for policy?
Moore: There is a period where everyone needs to work out what a new situation is. I am just old enough to remember what that was like in relation to state power in the late 1970s. It takes a long time to see why something is really wrong, and what to do about it. The achievement of Ronald Reagan was that he had a clear analysis of the problem and the political courage to do things differently. Right now, no party has that. We can all see that there is a sickness, but we haven’t properly diagnosed it yet, so we are still waiting for a cure. When I hear David Cameron speak, I think that he is a very able and sensible man, and the best leader we could currently have. But I don’t see him as a visionary. He is good at staying afloat on a stormy sea rather than being the captain of the ship.

The European: Do you think that our reactions to this crisis have been too timid, that we have not used the moment of crisis for a more radical project of political and economic transformation? After all, the new Italian government represents the pinnacle of technocratic politics in Europe.
Moore: Yes, very much. For example, it would be a disaster if the Euro collapses – but it is ultimately necessary. Within each country, the people have to figure out how to make democracy work for the public good again. In Britain, our desire for a small state has resulted in handing over a lot of power to bureaucratic agencies that are not really answerable to anyone. Politicians can then stand in front of a microphone and comment: “An independent body said this or that.” But what is happening is that bureaucrats are deciding ethical or public question, and the prime minister actually prides himself on the fact that he is not deciding. When political questions are concerned, they need to be dealt with in the political arena. Bureaucrats run systems, they can monitor things. But why should they decide on parliamentary expenses? We elect representatives, and then we cut their legs off. The only ultimate authority in a country must be the elected leaders.

The European: The leaders, or the people?
Moore: The leaders have their authority only because of the will of the people. And as a Tory, I would also add, in the traditions of the country. Legitimacy is very important, the monarchy is very important in Britain, the rule of law is very important.

The European: It seems that we are talking about these things in very procedural terms: The rule of law, the electoral process, etc. But at the same time we feel less represented. What is the substance with which to fill those procedures?
Moore: I believe that procedures are important. Democracy is a good example: Why don’t we hold primaries to nominate party candidates? What happens now is that parliamentary candidates are selected by small groups of party officials based on orders that come down from London. Primaries won’t produce universally wonderful results, but they seem like a very good idea to me. The same is true for certain kinds of referendums. These are embryonic but interesting ideas. You want to take small decisions out of the hands of national representatives and bureaucrats.

The European: So the idea is subsidiarity: Decide locally if possible.
Moore: Yes, although I am quite skeptical about localism. There is a lot of grand talk about it, but on the ground it can be a bloody nightmare. I live in a small village, and the question is always: Who will do the work? Local governments tend to be more corrupt than national governments because everybody is in everybody’s pocket. But I am very interested in education reform: For the first time, parents can start their own schools or work to improve a school. That is the sort of thing that should make us hopeful. As long as our schools stay bad, we will have massive unemployment, crime, broken marriages, et cetera. Indeed, when you look at the quality of British schools, you wonder why things are not a lot worse. One problem with the media is that they go on about things that don’t matter, that they encourage a kind of mass stupidity.

The European: You earlier invoked Gramsci. Are you an optimist of the heart?
Moore: Yes, because of a Christian belief in original sin. It is a very comforting doctrine. If you know that you are bad, there is a sense that we are all in this together. The people who think that human nature is intrinsically good have to wonder why the world is so bad. But if you embrace your badness, you can review it and improve as a result. Free societies do that, and it is particularly strong in the Anglo-Saxon world. I have always been bothered by the tendency of contemporary European culture to sweep things under the carpet. One thing that European nations don’t want to do right now is analyze why they are in this economic mess.

The European: Which traditions have become nuisances rather than foundations that help us improve?
Moore: The conservative party has been trying to modernize. There is no point in just talking to yourselves, you also have to examine how the world is changing. But the ideas that you have to float away from everything and the idea that you have to cling to everything are equally stupid. As a conservative, I tend to believe that things don’t change as much as it seems. During a recession, because of the culture of risk and uncertainty, people become more conservative. But a lot of Thatcherites have been wrong to think that the best way to preserve her memory is to talk just like her. If Mrs. Thatcher were prime minister today, she would talk very differently than in the 1980s.

The European: The Spanish Indignados or the Occupy movement seem to have opened the space for political discussions and have forced certain issues on the political agenda. We cannot avoid the question whether, as you put it, we really are “in this together.” Do you see that as a positive contribution?
Moore: Conservatives should be in favor of inequality, but they have to explain why. They should not be in favor of injustice or special treatment for the rich. With the Occupy movement, I don’t want to give it much credit because it seems confused. Why should we respect people just because they sit outside a church? The people we should listen to are pensioners who are struggling, or single parents, or people who have lost their jobs. I am against the Left-wing idea that a street protest is a true expression of the feeling of the people. Lenin knew very well how popular opinion could be manipulated.

The European: What makes street protests less authentic than parliamentary discussions, where the dominating force often seems to be party doctrine?
Moore: Many people now regard parliament as inadequate. It was extraordinary that people in Britain really looked to parliament as the place for political discussion. Some of that is still true – we would look to parliament in the case of war, for example. What is not clear to me is what the alternative is. I hope that rather than replacing parliament, we find ways to strengthen it. There is something slightly childish about wanting to have debates without finding ways to translate them into the way the country is run. Your question about authenticity, I cannot answer that. It’s a quest that all societies should be engaged in all the time. Right now, authenticity is pretty hard to find.


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