Four YouGov panellists took on capitalism. What did you make of their analysis?

In YouGov Labs we are always looking for new ways to engage with our panellists, and initiate debates that are interesting, informative and fun.

With that goal in mind, we invited those of you with opinions on the future of capitalism to submit blogs outlining your critiques of the current system, and your suggestions for how it could be reformed going forward.

With the express permission of those who took part in this exercise, we selected four anonymous entries that represented one of four different perspectives on capitalism.
We then asked you to tell us which of the four views came closest to your own.

Some background:

Back in June, we invited you to take part in the first stage of our ‘Future of Capitalism’ debate, the Office of National Statistics had just released data revealing that Britain’s double-dip recession was deeper than previously thought, with the economy contracting by -0.3%, instead of the original estimate of -0.2. For leaders in the UK and Europe, the focus of the economic debate at that time centred on whether to plough on with austerity, or slow the pace of cuts and do more to promote growth.

Fast forward to today, and not a great deal has changed, but there are signs that things have gotten slightly worse. The Bank of England recently announced it expected the UK’s growth to be essentially flat this year, down from the 0.8% growth it forecast back in May. Governments around the world have begun to cautiously shift their approach towards economic stimulus, and some argue this could lead to a recovery in the near future. While others argue that the “fiver-year slump” looks increasingly interminable.

(Click on the titles below to read the full panellist blogs)

VIEWPOINT 1: 'CAPITALISM NEEDS RADICAL REFORM'

“The converging problems of climate change, growing population and limited resources, which are unevenly distributed, require a change of approach. Capitalism as currently practised exacerbates these problems.

The corporate world needs to include social responsibility in its policies. Neo-Con capitalism favours consumption and competition, whilst denying and avoiding any responsibility for consequent hardships.

Money as a token of exchange is fine, but when it functions as a lever of unregulated power it becomes corrupted. Other values that cannot be measured are dismissed – truth, fairness, empathy, aesthetics, ethics.

The corruptions are subtle and pervasive; honesty, for instance, becomes that which is not illegal, and examples of this excuse for unfairness are legion (MPs expenses, tax avoidance, disproportionate remuneration).

If we continue as we are the gap between rich and poor will eventually produce two very diverse societies. The potential exists in that situation for massive social disturbance. The British Government should pursue the development of international mechanisms to regulate global capitalism, which chases corporate goals regardless of the effects in nation states. Big business exploits the gaps between the regulatory systems of nations. By surrendering some small element of sovereign power to an international body this problem can be eased.

A portion of profit should be diverted into projects that bolster international social cohesion and the reduction of poverty through education, agriculture and sustainability projects. Tax could be levied internationally at a common agreed rate, but paid nationally in proportion to the turnover generated in a particular country. The revenue could be used to replace aid budgets, thereby relieving taxpayers. There is no loss to individual states, as this is tax that is not currently collected and it would apply equally to all. The intention would be to bring corporations to understand they do have social responsibilities, and they will be made to discharge them as part of the cost of doing business.

The scheme could be progressive, expanding into new areas where an international approach is felt to be appropriate. It could be used to pay for policing rainforest protection or research into renewable energy sources. All of the noble ambitions that governments currently fail to fund properly could benefit from a new source of revenue. It could also return some of the democratic deficit to governments.”

VIEWPOINT 2: 'Capitalism is in crisis'

“Capitalism in itself is not wrong, but in its current form it cannot give what it has promised – prosperity, leisure time, freedom. Capitalism as it is demands infinite growth in a finite world. We therefore need a system that can cope with this.

The keys to this are much more community involvement, and small local-level government.

An economy not focused on money, but on quality of life. A money system that rewards sparing use of the commons (land, mineral resources, water) by forcing the internalisation of environmental and social costs in some way (perhaps by 'backing' the pound with clean air and unspoilt environment, instead of gold or oil as it effectively is now). And by providing a social wage to allow people to make use of their time doing beautiful and useful things, instead of being a slave to money and working for survival.

Firstly, the state should be much more local in its outlook and powers. Companies should be owned by those who contribute to their success (the people who work there), and should be limited in size to allow a community to grow within the company. This would encourage loyalty and pride in people’s work, greater equality in pay, and less jobs that are totally demeaning to the human spirit.

Economies of scale could still be achieved through commonwealths working together for their workers (and communities) rather than distant shareholders.”

VIEWPOINT 3: 'Capitalism is the best system'

“The problem with the world economy is that we do not have free market capitalism. We have an American-style monopolistic capitalism where bribery and cronyism are rife, and this has caused many of the current problems – much like the socialist planned economy of the 1960s, which straitjacketed British industry. As we are not currently using true ‘capitalism’ how can capitalism be wrong?”

Free trade without the plethora of protective regulations is capitalism. More business and smaller is the future for British industry. In a truly capitalist economy, no business should be able to achieve more than a 20% market share due to rebalancing by competition.

Success being rewarded and failure having serious negative consequences are essential for true capitalism to work.

Those who succeed are rewarded and encouraged to continue, whilst those who fail either go bankrupt or learn from their mistakes, and their competitors’ success to innovate or change into a successful enterprise – either of which prevents further failure.

In the 1970s, failing, inefficient, uncompetitive state industries were supported (bailed out) by the taxpayer until the taxpayer could bear the losses no more, and those industries were privatized into the many success stories of the 1980s.

Why is the banking sector, which is very happy to dish out the consequences of failure to their uncompetitive, poorly managed business customers, not being subjected to the same process of administration or receivership?

This process would generate a number of smaller competing units in the banking sector, providing greater choice for the consumer, and returning banking back to a free market model.”

VIEWPOINT 4: 'Capitalism needs to be lightly regulated'

“The evidence is stark – socialism doesn't work. It isn't even very moral. It may originally have sprung from the most benevolent of motives, but underpinning it now is a belief that the state knows what is best for the individual, even if he/she is unaware of it.

It thus descends into control and repression, partly by conviction, and partly because open-ended commitments to welfare are completely unsupportable if the individual doesn't behave in the efficient and economic manner required of him or her.

The upshot is that personal enterprise and responsibility is inhibited, and wealth creation and self-discipline decline to the point at which the state is no longer viable. There are lots of examples: USSR, China, North Korea, Cuba, Zimbabwe etc.

Capitalism does work, but like Darwinian self-selection it is inherently ruthless and arbitrary. The less fettered it is by regulation the more wealth is created, as with the USA during most of the 20th Century, and the UK in the previous century.

There are (at least) two problems with capitalism. (1) It is brutal, arbitrary and often unjust and (2) there is a natural tendency to eliminate competition (via monopoly or excessive regulation) and to create ‘heads I win, tails you lose’ situations, such as the financial institutions have engineered for themselves.

We should simultaneously (1) modify all incentive schemes (bonuses et al) so that they work both ways and penalise failure as vigorously as they reward success. If they cannot be shown to operate symmetrically they should not be permitted.

We will probably need to find some way of enfranchising the true company shareholders to enforce this – i.e. the pension fund contributors, not the pension fund managers. (2) We need to wind back the state and reduce taxation, regulation, and surveillance.

We must kill off means-tested benefit, as it inevitably leads to marginal disincentives to work. We still need to mitigate the worst injustices and arbitrariness of raw capitalism, but without eliminating all of the benefits.”

Come crunch time, most of our participants sided with the first blog's 'radical reform' views.

“The converging problems of climate change, growing population and limited resources, which are unevenly distributed, require a change of approach. … A portion of profit should be diverted into projects that bolster international social cohesion and the reduction of poverty through education, agriculture and sustainability projects.”

The panellist blogger argued that the corporate world needed to have more social responsibilities, and that if things continued on as they are the gap between rich and poor would continue to widen.

The panellist suggested the establishment of international mechanisms that would channel a portion of corporate profits into causes that would benefit more people.

Many of you who chose this panellist blog as the one that most aligns with your own views on capitalism said you agreed with ‘all of it’.
Participants were particularly supportive of the idea that corporations should be more socially responsible in the way they operate, and that they should contribute more to helping solve pressing issues, such as poverty and environmental sustainability.
You expressed support for the panellist’s view that capitalism, as it is currently practised, ‘corrupts’, and that economic reforms should be implemented that would engrain the concept of working towards a wider public good, as opposed to just the pursuit of profit and growth.
Many participants said there was ‘nothing’ about the panellist blog they disagreed with, while some others questioned the panellist’s suggestions for ways that corporations could be made to contribute to helping solve environmental and social problems. In particular, the blogger’s proposal to levy an international tax on multinational corporations was thought by some to be “unrealistic”.

The second largest proportion of those who took part in the discussion agreed most with the views expressed in the ‘capitalism in crisis’ panellist blog.

This panellist blog argued that capitalism’s need to continually grow is unsustainable.

The blog suggested that more decision-making should happen at the community level, that companies should be put under the control of the people who work at them, and also that a living wage should be established.

Those who were in this group said they most agreed with the basic premise that there is nothing wrong with capitalism per se, but that the purpose of capitalism should be to help facilitate happy lives for people in society.
Panellists expressed support for the idea that capitalism should be “refocused” towards facilitating the wellbeing and non-monetary enrichment of society, as opposed to being geared towards endless growth for growth’s sake, which has resulted in wealth increasingly being concentrated in the hands of a select few.
The aspects of the panellist blog that participants disagreed with mostly had to do with the blogger’s practical suggestions for how a refocusing of the capitalism system might be achieved. Some of you were sceptical of putting too much faith in the wisdom of local communities and their supposed ability to make better decisions than central government.
Even if you liked some of the proposed solutions, such as the internationalisation of environmental and social costs, you argued that implementing them was unrealistic. Also, some participants were concerned that giving everyone in society a living wage would lead some to abuse the system.

The panellist blog that the third largest proportion of participants agreed with most was the ‘capitalist is the best system’ perspective.

This panellist blogger argued that the current system with its bank bailouts and other state assistance of industry is not ‘true’ free-market capitalism.

The blog suggests that companies, especially banks, should be allowed to fail, and that the principle of rewarding success and penalising failure should be fundamental to the economic system. This would include limiting the size of companies to ensure there is always competition in the market.

Those who most agreed with this viewpoint appreciated the panellist blogger’s critique of the banking system, and concurred that small business was the key to the UK’s future economic success.
Participants especially liked the blog’s point about large corporations and banks being ‘allowed’ to fail, as opposed to being propped up by the government.
You said that state interference in the economy, particularly bank bailouts, has perverted a fundamental element of a functioning society, which is that success should bring rewards and failure should warrant penalties.
The panellist blogger’s point about ‘crony capitalism’ being the current norm, as opposed to true, free-market capitalism, was also well-received, with participants arguing there was too much wealth concentrated in the hands of too few people.
The aspects of the blogger’s argument that participants disagreed with included its criticism of “protective regulation”. Participants said they thought some economic regulation was necessary, particularly pertaining to the banking sector.

And the fourth choice for those of you who took part in the discussion was the panellist blog representing the ‘light regulation’ argument.

“Capitalism does work, but like Darwinian self-selection it is inherently ruthless and arbitrary. The less fettered it is by regulation the more wealth is created, as with the USA during most of the 20th Century, and the UK in the previous century.”

This panellist blog is essentially pro-capitalism, arguing that a competitive economy has been shown to function far better than a socialist, state-controlled system.

The blogger argues that some light regulatory measures should be used to essentially round-off capitalism’s rough edges, such as the tendency towards monopolies. The panellist suggests reforming state benefits to ensure they do not act as disincentives to work.

Those who agreed most with the views expressed in this blog said that the panellist’s assessment of the inherent flaws in socialism resonated with them. Participants agreed that socialism stifles innovation and is economically demotivating.
The panellist’s critique of capitalism as “inherently ruthless and arbitrary” was also well-received.
Some participants disagreed with the panellist’s contention that means-tested benefits should be scrapped, however, and argued that while an overly-generous benefits system could discourage some people from working, there is still a place for means-tested benefits.

I agree with the 'radical reform' blog

“The problem of finite resources is the central problem in economics, and it is not solved by a capitalism that forces growth at all costs, particularly when profits are unfairly distributed and those who cause damage are not held accountable. Corporations do exploit regulation loopholes because the principle of competition dictates that if they don't, another corporation will. Collective restraint is necessary. Internationalisation is a good strategy” Isabel, Sheffield

“The blogger seems to be more or less right about the problems of climate change and disproportionately allocated and increasingly scarce resources being exacerbated by global capitalism. The blogger highlights real problems with a system that asks people to think only in terms of their own income (and GDP and growth in purely economic terms) – the erosion of concepts such as honesty and fairness, wealth disparities and a loss of (global) social solidarity and cohesion. The blogger is also very right to point to the problem of patchy and differentiated business regulations that allow big business to evade its social responsibilities in terms of workers' rights and taxation” Anon

“The world needs honest, trustworthy, reliable people to govern us, at present the current governments of almost all countries are corrupt including our own country. We need a much fairer society with better equality, not the rich getting richer and the poor being cast out, as is currently happening. Banks and business are greedy beyond greed and I agree that a proportion of profit should be diverted to help others” Co Antrim

“I agree that capitalism in its current form is at odds with a fair and just society. However, this is an inevitable situation, since companies exist solely to make profit. I also agree that government should (but currently does not) fully regulate business and charge fair taxes that cannot be avoided” Anon

“It nails it completely; the fact that business is all about doing whatever it can to make profit without any concern for the consequences. And the panellist offers a solution” Gavo, Cambridge

“International tax, good idea, but it would have to be set out very clearly that it should be run through the current systems we have in place eg, expanding G8 rather than setting up some cumbersome corrupt vehicle of distribution (like the EU), which costs more to run than the money it collects. These funds can never be used for policing or military” H, Norfolk

“It acknowledges that there is more to life than money, profit, but that too often these areas are ignored” Rich, West Midlands

“Discussing the importance of the environment is a priority. As a species we seem incapable of understanding the importance of strategic long term thinking to assure our survival. We prefer individual instant gratification or taking a 'traditional' often limited response to a situation. Taking responsibility for your actions on an individual or corporate level is not practised widely enough” Anon

I agree with the 'capitalism in crisis' blog

“I agree that there needs to be a change of focus – that capitalism as it stands is no longer healthy and will only lead to disorder in a finite world. I think that quality of life is more important than money, and I'm interested in how his system for rewarding less use of the commons would actually work” Simon G, London

“The increased emphasis on community level governance, quality of life and people rather than simply on growth and monetarism” Anon

“Capitalism does not give what it has promised – prosperity, leisure time, freedom. Companies should be owned by those who contribute to their success (the people who work there). This would encourage loyalty and pride in people’s work, greater equality in pay, and less jobs that are totally demeaning to the human spirit” Anon

“I agree with the importance of focussing on quality of life, and the provision of a social wage instead of slavery to money. I also agree that capitalism does not deliver all of prosperity, leisure time and freedom” Johnny, Suffolk

“Capitalism demands infinite growth and has not given us the promised leisure time. Companies should be owned by the those who contribute to their success” Daniel, London

“Acceptance that capitalism is integral to the system, but that free market capitalism is not the system in its entirety. There is surely more to life than the accumulation and preservation of capital for those who already hold most of it” Colm, The Midlands

“Quality of life is the goal; ‘Allow people to make use of their time doing beautiful and useful things, instead of being a slave’” Anon

“The idea that life should not be all about chasing money and that there must be another element to enrich us in other ways” Anon

I agree with the 'capitalism is the best system' blog

“The need to stop protecting large banks and businesses from the consequences of their own mistakes, since this actually encourages behaviour likely to risk more of the same since they have no downsides to risky behaviour” A Williams, Teesside

“I agree with the enquiry as to why the banking sector is not subjected to the process of administration and receivership. In a true market capitalist environment, a bank failing would be acceptable, and this happened often in the 19^th century and early 20^th century. I also agree with the point that we do not have a true market capitalist system” Nick J, Louth

“I agree entirely with his comment regarding the omnipotence of the banking sector, which is not subject to the same degree of scrutiny as other areas of enterprise. Either that, or is being allowed to do exactly what it pleases by the government. One can discount the Financial Services Authority, peopled as it is by unqualified incompetents (personal experience prompts this latter comment)” Lynn P, Wiltshire

“More smaller businesses is the future. The current economic problems are caused by the high level of influence wielded by a massively powerful handful of corporations. How can capitalism be wrong if we're not even using it? Success being rewarded and failure leading to consequences are crucial for capitalism to work. True capitalism rewards innovation and adaptation” Ben CR, Lechlade

“Probably the key component is the statement 'success being rewarded and failure having serious negative consequences' is the key here. Particularly in investment banking the risks taken are so high because all that risk is taken by the corporation and not the individual, whereas benefits reach both the corporation and the individual” Ben W, Bury

“They are not just laying responsibility on any one group/country/industry, but they highlight in more general terms what is wrong with the system at the moment, and make some generalised suggestions as to how things might be improved. They do not suggest the overthrow of capitalism” Peter, Pinner

“Success brings rewards and failure brings penalties – this is a fundamental building block on which a successful society is based” Anon

“The analogy between nationalised industries and the modern banking sector seems to be correct, and it is important in understanding why they failed. The problem is not free markets but crony-capitalism” Marcus, Perthshire

I agree with the 'light regulation' blog

“I agree that socialism doesn't work and isn't moral, and that it fails as the state can't provide the incentives that capitalism can to create a functioning economy. I agree that capitalism is inherently ruthless and arbitrary, and that this is a problem as is the tendency to eliminate competition. I agree that we need to find a way to reduce this” Oliver H, Hertfordshire

“[I agree with] the concept that capitalism, as currently practised, generates an ‘I win, you lose loads of money' type of culture, which leaves no space for individual or corporate morality” Anon

“It hits the nail on the head and shows why political tampering causes the system to fail” Bryan C, Kent

“The problems of doctrinaire socialism lie in its tendency to coercion and totalitarianism, whereby the media and all forms of social discourse are controlled. Cries of rage about the injustices of capitalism have to be set against the cruelties of Stalin and Mao and the shameless hypocrisy of elite rules in one party states” Bill, Doncaster

“I totally agree that governments cannot instil corporate morality in public companies. Until now, the pension fund shareholders have played along with the game, so long as the ROI was positive. Yet many of these shareholders have eschewed tobacco companies because the products are life-harming. Why can't they take a similar line with companies whose executive pay-outs and bonus schemes are harming the morality of these companies and thereby polluting the values of the country we live in” Anon

“We must kill off means-tested benefit, as it inevitably leads to marginal disincentives to work. We still need to mitigate the worst injustices and arbitrariness of raw capitalism, but without eliminating all of the benefits” Anon

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