The Staggers

The New Statesman’s rolling politics blog

Why Vince Cable is no Marxist

The Business Secretary’s arguments owe more to Adam Smith than they do to Karl Marx.

By George Eaton Published 22 September 2010 10:42

The Lib Dem conference has so far produced few memorable speeches, but Vince Cable's widely trailed address should prove an exception. He will warn that the current system "takes no prisoners and kills competition where it can" and that markets are "often irrational and rigged", and he will promise to shine a "harsh light into the murky world of corporate behaviour".

Inevitably, the free-market right has interpreted Cable's speech as an attack not on unfettered markets, but on capitalism tout court. Richard Lambert of the CBI criticised Cable's "odd" and "emotional" language, and Lambert's predecessor Digby Jones accused the Business Secretary of "rabble-rousing".

Yet Cable's arguments owe more to Adam Smith than they do to Karl Marx. His words reflect the centuries-old awareness that the free market is not synonymous with competition, or with the public interest.

As Smith, that great apostle of capitalism, argued:

The interest of the dealers, in any particular branch and trade or manufactures, is always in some respects different from, and even opposite to, that of the public.

Which now looks like a rather prescient comment on the British banking sector. Elsewhere, on the self-interested nature of industry, he pointed out:

Our merchants and master-manufacturers complain much of the bad effects of high wages in raising the price of their goods both at home and abroad. They say nothing concerning the bad effects of high profits. They are silent in regard to the pernicious effects of their own gains. They complain only of those of other people.

What Cable's critics are too intellectually barren to acknowledge is that there are alternatives to the finance-dominated, Anglo-Saxon model beyond that of state socialism. The Swedes do capitalism, the Americans do capitalism, the French do capitalism, even the Chinese do capitalism. But they all do it in very different ways.

When Richard Lambert sneers that it "will be interesting to hear [Cable's] ideas for an alternative", he fails to acknowledge this reality. But at least some of our political class may be about to.

UPDATE: Cable left in his attack on capitalism, but added a reference to Adam Smith that wasn't in the text last night. Perhaps the Business Secretary read The Staggers over breakfast?

His words: "Capitalism takes no prisoners and kills competition where it can, as Adam Smith explained over 200 years ago."

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Tags: Vince Cable

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16 comments

Wed, 2010-09-22 11:18 — Dorian (not verified)

Adam Smith was a "Capitalist" only in name, If he were around today his position would be regarded as too left-wing even for New Labour.

Wed, 2010-09-22 10:49 — jie4v7i14

He is a fool fly by night though, isn't e, election early May 2011,
http://www.youtube.com/watch?v=cQRytgGffV4

Wed, 2010-09-22 10:50 — Marcus (not verified)

Whether he is a Marxist or not, at least he has some principals. This marks a significant change from the previous incumbent of that office.

Wed, 2010-09-22 11:21 — Ricardo1

Hmm, I wonder what the Adam Smith Institute (who are very much in favour of unregulated free-for-all capitalism) thinks of this...?

Wed, 2010-09-22 11:32 — jie4v7i14

Vince is a realist, which is nice.
http://www.youtube.com/watch?v=9Aj_cEP-PdA

Wed, 2010-09-22 11:37 — jie4v7i14

Richard and Linda, from beeb OGWT, classic appearance, is down in history,
http://www.youtube.com/watch?v=JD4Qz51CWR4

Wed, 2010-09-22 11:48 — Sue Davies (not verified)

I wonder if Richard Lambert really doesn't understand the difference between Adam Smith and Marxism .. attacks from the CBI et al, is such a good way for Cable to distance himself from Osborne whilst he essentially has little power to oppose what the treasury imposes.

Thu, 2010-09-23 14:22 — Tim Wright (not verified)

Anyone that deviates from the mainstream in relation to business is generally branded a loon of one sort or another. As rightly pointed out in the article it is generally it is the parochial view of “good business practice” that under pins this response. Business Schools trot out flawed models that are happily lapped up by the waiting students. I gave a lecture a few months ago at a business school on Knowledge Management explaining that it was an approach to management that recognises and embraces the unique skills and knowledge embodied in their companies staff. When I explained that many of the command and control models they were learning were not appropriate if a company is to thrive on knowledge – and pointed out that there are successful companies that have very different models of operation and management I was accused of being a Communist.

Wed, 2010-09-22 13:16 — swatantra

In politics its possible to be anything you like, as long as you make all the popular noises. A liberal marxist capitalist social democrat about sums him up about right. Basicalluy in amixed market its possible to accomodate private as well as public enterprises. i'd go along with that.

Wed, 2010-09-22 13:48 — Simon7

Basing one's arguments upon the writings of Adam Smith is no bad thing, considering that he believed in a moral form of capitalism - far from the neoliberal one which has been dominant since the late 1970s.

Wed, 2010-09-22 14:12 — territier

Hmmmm...

http://www.newstatesman.com/ideas/2010/04/smith-market-essay-sentiments

Wed, 2010-09-22 14:55 — Clem the Gem

Vince is trying to institute long overdue regulation back into The City - something we shamefully failed to do. I doubt he will succeed, but we should support what good he may do. Judging by the attacks on him this morning from Digby Jones, and the minimising of his role by at least one BBC commentator, he is having a hard time.
It is not in our interests that he fail - it is in the interests of The City and the party they overwhelmingly always back.
as the opposition, we must be constructive where we can, as well as opposing the dreadful mess Osborne is getting us into.

Wed, 2010-09-22 15:45 — David Vinter (not verified)

So the 'French' do a different kind of 'Capitalism'? Yes it's mostly based on access to the'Grande Ecole' system, or for a few that escaped with thair heads still intact, some strong but distant 'Bourbon' blood still in their family veins.

Wed, 2010-09-22 17:07 — Stuart Eels (not verified)

Vince Cable is now showing his mettle and I expect that over the next five years he will show theres no place for Labour with it's cosy association with the multi-nationals as was demostrated over the last 13 years.

A breath of fresh air!

Wed, 2010-09-22 23:06 — Neil (not verified)

Vince Cable said publicly what the voiceless majority have known for a long time.

I find it perplexing that the CBI and small-business leaders are trying to paint him as some loon. The City is just a drain on the real economy and their activities do nothing to promote long-term investment.

Short selling, insider dealing, derivatives, investment banking fees, lack of serious competition, crippling bank charges, asset-stripping, exhorbitant borrowing fees, endowments, payment-protection insurance, tax-dodging and the non-Exec cosy club (et al) are all examples of how the City screws business, taxpayers, the government, workers and the public.

This is not capitalism but an elite stitch-up and the sooner it is smashed - or even better, relocates abroad where someone else can pick up the tab when the wheels fall off again - the better.

Thu, 2010-09-23 01:39 — josephCape

If there's any single trait that annoys me about British politics its plugging our ears to the rest of the world and screaming 'nah nah nah - we're not listening'. This article gives a perfect example of yet another case of this after pointlessly debating over whether coalitions are a stable long-term kind of government. Why isn'y more of our policy based on what has been proven in other parts of the world? Somehow it always comes down to some unexplained sort of British exceptionalism which, by the way Vince, is the only way that these cuts are justified in spite of the policy of every other developed country + the advice of the IMF. Hardly Marxist institutions.