Yesterday Steve Forbes argued we have to give free markets priority over Government interference. I’m surprised we are still having that argument. It was won by about 1980. In a global depression, though, Governments have again tried, in vain, to stimulate economies when they should have been figuring out how to enforce the basic laws of capitalism. Their failure lies in allowing banks, particularly European ones, to continue hiding highly risky debt, and in allowing bankers in the US and Europe to rise above the law.
I guess it’s necessary to do three things – knock back the interventionists where necessary, bring transparency to the murky world of finance, and begin acknowledging the broader benefits of well-run capitalism.
Steve’s argument is more than that though. He’s also saying that free markets are moral. I would go further and say we have to understand the way capitalism has helped enhance our experience of life. Through the last hundred and fifty years we have substantially increased, augmented and invented new sensory experiences. What we do as humans has changed. What we see and what we are able to feel are enhanced.
This is not simply a result of free markets. It is a consequence of emotional capitalism, a side to the system we need to capture and celebrate. Capitalism has already augmented human experience substantially. That emotional enhancement is what drives wealth creation.
I’m going to make this argument in a TEDx talk in October – assuming I can get my flight and hotel sponsored in time (TEDx s a non-profit and I live a long way from the venue). The gist of the talk is this – and I would love your feedback.
The history of capitalism that doesn’t often get told is the history of better emotions and experiences and how these drive wealth creation and change – it tends instead to be about the invention of steam power and the pulsating, masculine consequences of machine power, the genius of inventors who brought on electricity, the big steel works converters, and of course human misery, unequal wealth distribution and, eventually, breakthrough medicine that just about evens things up for the less well off.
I’ve been looking over the key inventions of the 19th and 20th centuries though and see a very different picture. For example the 19th century is mostly the story of color, design and decoration.
From 1850 onwards a series of innovations gave us a way to manufacture a dye-fast purple – in fact called mauve. Previously, purple had been the preserve of the very wealthy. By the end of the century we had new reds, violets, black, brown; we had ready mixed oil-based paints sold in cans, wallpapers in rolls printed on huge 28-color printers, and pastes to hang them. We had new fabrics like rayon that could hold dyes more easily. In short we colored our lives in.
Towards the end of the 19th century humans began to color the built environment: they began painting their houses, decorating their interiors, replacing wood, whitewash and leather with reds, blues, whites, greens, purples, yellow. The art nouveau movement elevated design into an art form. Color drove industry and wealth creation. From a standing start in the 1880s low cost wallpaper production reached over 400 million rolls by the early 1920s. The high cost craft papers gave way to mass production. Ordinary people could access a can of paint and slap it on. There was no longer any need for dullness. And the effect of that was to drive the success of companies that became household names. Geigy, began as a dye producer and went onto become Novartis the drug maker, BASF, IG Farben. Look at Sony’s Bravia – still trying to make sense of color – and the importance of dyes in medicine. Color still drives business and innovation.