Capitalism: an engine for progress

It's the time of year when many commentators are going back to basics and asking if our dominant economic model - free market capitalism - is a force for good in the world.

A few days ago I drew attention to Oxfam's double decker bus analogy - that half the world's wealth is owned by 85 people, who could all fit on a bus at a squeeze. That's a shocking suggestion, and well worth taking seriously. There is an appalling long and depressing list of economic injustices and challenges facing the world.

So there's a lot wrong with the world, and some of the problems can be directly attributed to capitalism. But when listening to some people, many economists feel like a clown at a funeral. Things are not so bad. In fact, in some ways they are vastly better than we typically imagine.

This is a huge debate in which you might try compiling evidence on either side.

Allister Heath (a renowned 'supply-sider') writes in The Telegraph that we should be prepared to celebrate millionaires and their fortunes - if they have been earned, rather than a product of what he describes as 'Crony Capitalism'. That's almost the opposite point to the one made by Oxfam about inequality. According to the Huffington Post, Bill Gates is reported as saying that there will be 'No More Poor Countries By 2035' (the article also contains a link to Hans Rosling who makes the clear point that economic growth is essential to reduce population pressures). The Economist also predicted that the world has an astonishing chance to take a billion people out of extreme poverty by 2030. Last summer I wondered if we might all look forward to a future of astonishing abundance.

I don't mean to sound complacent. There's clearly a potential conflict between economic growth and the environment, for instance. Last year I also had a go at putting some resources together myself on that subject - the impact of business on the environment, for good and for bad. I think I might go back to the fundamentals again...