Before I first went to university I had a belief, which I still have, and which is probably shared by the great majority of you.footnote I mean the belief that the way to decide whether a given economic period is good or bad economically is by considering the welfare of people in general at the relevant time. If people are on the whole well off, then on the whole the times are good, and if they are not, then the times are bad. Because I had this belief before I got to university, I was surprised by something I heard in one of the first lectures I attended, which was given by the late Frank Cyril James, who, as it happens, obtained his Bachelor of Commerce degree here at the London School of Economics in 1923. When I heard him he was Principal and Vice-Chancellor of McGill University, where, in addition to occupying the Principalship, he gave lectures every year on the economic history of the world, from its semiscrutable beginnings up to whatever year he was lecturing in. In my case the year was 1958, and in the lecture I want to tell you about James was describing a segment of modern history, some particular quarter-century or so: I am sorry to say I cannot remember which one. But I do remember something of what he said about it. ‘These’, he said, referring to the years in question, ‘were excellent times economically. Prices were high, wages were low . . .’ And he went on, but I did not hear the rest of his sentence.

I did not hear it because I was busy wondering whether he had meant what he said, or, perhaps, had put the words ‘high’ and ‘low’ in the wrong places. For though I had not studied economics, I was convinced that high prices and low wages made for hard times, not good ones. In due course I came to the conclusion that James was too careful to have transposed the two words. It followed that he meant what he said. And it also followed that what he meant when he said that times were good was that they were good for the employing classes, for the folk he was revealing himself to be a spokesman of, since when wages are low and prices are high you can make a lot of money out of wage workers. Such candour about the properly purely instrumental position of the mass of humankind was common in nineteenth century economic writing, and James was a throwback to, or a holdover from, that age. For reasons to be stated in a moment, frank discourse of the Cyril James sort is now pretty rare, at any rate in public. It is discourse which, rather shockingly, treats human labour the way the capitalist system treats it in reality: as a resource for the enhancement of the wealth and power of those who do not have to labour, because they have so much wealth and power.

Last year’s speaker in this series (Rudolf Bahro) is justly celebrated for his contribution to the understanding of actually existing socialism. My own theme this evening is actually existing capitalism, and I want to start with the capitalism of the United Kingdom. This capitalism is currently managed by a Conservative government which is engaged in a sustained attack on the living standards, and on the democratic powers, of two huge and overlapping groups of the population: working class people and poor people. It is a government dedicated to the defence of private property, and to the restoration, as far as is thought politically possible, of property rights which Tories think have been eroded by decades of socialistic drift. Like all very large human projects, present Conservative policy is variously inspired. It is, in part, motivated by the structural requirements of contemporary British capitalism. But it also satisfies, or is at least intended to satisfy, revanchiste aspirations rife among the middle and upper classes, many of whom feel that it is wrong for humbly situated people to be as comfortable and as powerful as they are thought now to be. It is wrong for a person who is only an industrial worker, or, worse, unemployed, and therefore not contributing to the national wealth, to pay low rent for commodious living accommodation, and to be freed of anxiety in respect of the education and health of his or her children. Members of the working class, and those below them, some of whom are not even white, expect too much and get too much, and have too much say in the workplace and elsewhere, to the detriment of the income and the authority of their class superiors. There is, as a result, in many Tory hearts, a deep desire for what Tony Benn has called a fundamental shift of wealth and power in favour of rich people and their families.

Now that desire is not the official justification of present government policy, partly because, as Cyril James may not have realised, we live in a democratic age, and policy must be defended before people in general, not just people of privilege; and partly too, because human beings are so constituted that they need to believe, at least from time to time, that what they are doing is morally right. The disposition to generate ideology, and the disposition to consume it, are fundamental traits of human nature. As Isaac Deutscher said, in his book The Unfinished Revolution: ‘Statesmen, leaders and ordinary people alike need to have the subjective feeling that what they stand for is morally right’. Members of ruling classes need to feel that their rule is morally justified, and members of ruled classes need to feel that their acquiescence is morally appropriate. That is why ideology plays such an important part in history, for otherwise encounters between classes would always be settled by brute force. And it was a feature of Isaac Deutscher’s magnificent historical work that, while he was a materialist in the best Marxist sense, he was also a master at portraying the ideological atmosphere in which people breathe and think and live, in which, as Marx said, they become sensible of the structural conflicts between them, and fight them out. I did not know Isaac Deutscher personally, but he entered my life with some force on two occasions. The first was when I was studying Soviet history and politics at McGill University. His book on Stalin was required reading, and many of us were excited by the contrast between it and the merely academic treatments of Soviet history we also had to read. Isaac Deutscher showed us that scrupulous scholarship was compatible with political engagement. The first and only time I saw him was in June of 1965, when he spoke at a teach-in on the Vietnam War at University College London. He did not speak about the war alone, but located it within a much wider pattern of events, and when he finished I felt, as I am sure many others did, that I had, at least for the moment, a deeper understanding of the nature of the world I lived in.

The general need for ideology and the particular demands of a democratic age produce, when combined, a great body of justifying belief, which genuinely animates Conservative theory and practice. Whatever may be its ultimate and secret connection with more visceral springs of action, and with structural requirements of contemporary capitalism, there is a sincere conviction that the protection of private property, particularly in its larger agglomerations, is a good thing, not because it benefits some and harms others, but for reasons which one need not be ashamed to state. Three such reasons are salient in the ideological discourse of members of the government and their supporters. The regime of private property is defended on the grounds that it enlivens production, safeguards freedom and conforms to principles of justice. We can call these the economic argument, the freedom argument and the justice argument.

The economic argument is that the capitalist market, in which, by definition, private property reigns supreme, has good economic consequences. It is splendidly productive, to the advantage of everyone. Even the poor in a market economy are less poor than the poor in other kinds of economy. The idea of incentives appears here. To interfere with the natural tendency for high rewards to accrue to those who enjoy wealth and high positions is to dampen their creativity as investors, entrepreneurs, and managers, to the general disadvantage. To practise policies of steeply progressive taxation, death duties and the like, is to forgo the golden eggs the harried rich would otherwise lay. Widen the gap between rich and poor and both the rich and the poor will be richer than they otherwise would be. But secondly, and distinctly, any deviation from the free market, apart from having the stated adverse effect on welfare, is a trangression against freedom. Economic freedom has good economic consequences, but it is also a good thing apart from its consequences, since freedom is a good thing, and economic freedom is a form of freedom. And then there is the argument of justice. In the second week of the 1979 general election campaign Margaret Thatcher said that it was necessary to re-establish capitalism not only for economic reasons but also for moral ones. Private property, after all, belongs to those who own it. It is, consequently, a kind of theft to tax it on behalf of those who do not own it, which is why Ronald Reagan has reported that he can think of no moral justification for the progressive income tax (no matter how hard he tries). If this is mine, what right has anyone, even the state, to take part of it away from me? And if this is mine, what right has the state, through regulations and directives, to tell me what to do with it? The regime of fully free enterprise is good because it produces welfare and protects freedom. And it is also the form of economy demanded by principles of justice.

There is not time this evening to discuss all three arguments, and I shall say nothing about the economic one. The freedom argument I shall treat in some detail. And while I shall not be able to give the same attention to the justice argument itself, I shall spend a little time trying to satisfy you that the question whether or not capitalism is a just society is a very important one. To many that will seem obviously true, but there is a strong tendency on the Left to depreciate the idea of justice, and I want to combat that tendency in this lecture.