No one really believes in pure capitalism, least of all capitalists, bankers and the like, who run screaming to the state to bail them out when things go wrong. “Privatise the profits, socialise the losses” – it was ever thus. Pure capitalism eats everything around it, and when nothing is left it eats itself. To work for people instead of against them, what is good about capitalism (and in my opinion there is a lot of good) needs to be harnessed and regulated.
We’ve seen a classic case of all of the above coming out in the media lately. The most recent article was just yesterday (my emphasis):
In theory, the power that this country’s two major supermarket chains wield over their suppliers should benefit shoppers. The low prices they pay for produce should be reflected at the check-out counter.
But, according to a Green Party survey of fruit and vegetable growers, that is not happening. The survey found supermarkets applied mark-ups of up to 500 per cent on fresh produce.
To compound matters, growers were often forced to sell the produce for less than it cost them to grow it. That has implications for the quality and range of produce on supermarket shelves.
It needs to be said that the Greens’ survey was of just 75 growers. That is hardly comprehensive. But its conclusions bear a close relation to the situation in Britain, which has bedevilled that country’s competition watchdogs for the past decade
Yes, in theory a completely free market should be a great system. In practice, not so much. Monopolies form. As in this case they can use their power to gouge both producers and consumers, and cream off huge profits. Laws to control monopolies are common, and just one of the forms of regulation that is needed to make capitalism work. In the mean time, support your local farmers’ market, and support the Green’s call for a supermarket code of conduct.
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