THE Occupy London movement is marking its first month this week. It is routinely described as anti-capitalist, but this label is highly misleading. As I found out when I gave a lecture at its Tent City University last weekend, many of its participants are not against capitalism. They just want it better regulated so that it benefits the greatest possible majority.
But even accepting that the label accurately describes some participants in the movement, what does being anti-capitalist actually mean?
Many Americans, for example, consider countries like France and Sweden to be socialist or anti-capitalist — yet, were their 19th-century ancestors able to time-travel to today, they would almost certainly have called today's US socialist. They would have been shocked to find that their beloved country had decided to punish industry and enterprise with a progressive income tax.
To their horror, they would also see that children had been deprived of the freedom to work and adults “the liberty of working as long as [they] wished”, as the US Supreme Court put it in 1905 when ruling unconstitutional a New York state act limiting the working hours of bakers to 10 hours a day. What is capitalist, and thus anti-capitalist, it seems, depends on who you are.
Many institutions that most of us regard as the foundation stones of capitalism were not introduced until the mid-19th century, because they had been seen as undermining capitalism. Adam Smith opposed limited liability companies and Herbert Spencer objected to the central bank, both on the grounds that these institutions dulled market incentives by putting upper limits to investment risk. The same argument was made against the bankruptcy law.
Since the mid-19th century, many measures that were widely regarded as anti-capitalist when first introduced —such as the progressive income tax, the welfare state, child labour regulation and the eight-hour day — have become integral parts of capitalism today.
Capitalism has also evolved in very different ways across countries. They may all be capitalist in that they are predominantly run on the basis of private property and profit motives, but beyond that they are organised very differently.
In Japan interlocking share ownership among friendly enterprises, which once accounted for over 50 per cent of all listed shares and still accounts for around 30 per cent, makes hostile takeover very difficult. This has enabled Japanese companies to invest with a much longer time horizon than their British or American counterparts.
Japanese companies provide lifetime employment for their core workers (accounting for about a third of the workforce), thereby creating strong worker loyalty. They also give the workers a relatively large say in the management of the production process.
German capitalism is as different from the American or British version as Japanese capitalism, but in other ways. Like Japan, Germany gives a relatively big input to workers in the running of a company.
The writer is the author of 23 Things They Don't Tell You About Capitalism . —The Guardian, London