The 16 words that will haunt Boris Johnson

The mood at Boris Johnson’s press conference on Tuesday had been solemn, as the Prime Minister reviewed Britain’s year-long experience of the pandemic. But in the Cabinet Room afterwards, he was in a less guarded mood as he addressed members of the 1922 committee via Zoom. “The reason we have the vaccine success is because of capitalism,” he declared: “because of greed, my friends.”

Almost as soon as he had pronounced the words, he regretted them. “Remove that comment from your collective memory,” he told the MPs – but in vain. Someone in the audience leaked his declaration to the press.

Afterwards, there were attempts at damage limitation. One MP claimed that the greed reference was a joke aimed at the chief whip, Mark Spencer, who was sitting beside Johnson guzzling a cheese and pickle sandwich.

But whatever his intentions, the incident reignites a long-standing debate. Is capitalism beneficial to humanity, or does it simply advance the selfish interests of individuals?

The classic statement of capitalism is considered to be a book by the Scottish economist Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. Published in 1776, it recommended leaving economic decisions to market forces, which – Smith argued – would regulate themselves.

A few years later the French Revolution swept away the remnants of feudalism, allowing capitalism to become the world’s dominant system. The Industrial Revolution accelerated the change and highlighted both the benefits and drawbacks of capitalism. While factory owners made vast fortunes, their employees earned a pittance working in miserable conditions.

In response, a group of thinkers called “Utopian socialists” emerged. Robert Owen, a Welsh businessman, set up a factory with shorter working hours and provided education and housing for his employees. In France, Charles Fourier promoted the idea of communities in which everyone had a decent minimum income and unpleasant jobs were particularly well paid. He did not, however, object to some people being richer than others.

Karl Marx went much further in his 1848 pamphlet The Communist Manifesto and his book Das Kapital. For him, capitalism was an unalloyed evil in which working people were shamelessly exploited by the ruling class. The only way that the poor could improve their lot was through revolution – something he considered inevitable.

In the 20th Century the misery of life in countries like the USSR, and the eventual collapse of Communism in Europe, convinced most that Marx was wrong. But out-and-out capitalism was also discredited by crises such as the Great Depression.

As a result, a compromise emerged in the form of the welfare state. But whether governments should follow the socialist model of taxing the rich heavily to support the poor or the capitalist model of taxing them lightly to encourage enterprise, is a question that continues to divide people.

Are capitalism and altruism compatible?

Creed of greed?

Some say, no. Capitalism is driven by the desire for profit, which depends on producing goods as cheaply as you can and selling them as expensively as you can. It will always spell misery for those at the bottom of society, because it is in their employers’ interest to pay them badly. Globalisation has made the situation worse, since companies now go wherever they can find the cheapest labour.

Others argue that a system that generates as much money as possible is in everybody’s interest. Just look at Bill Gates: having made a vast fortune, he is now giving billions of dollars away to help people. Charities and institutions such as universities rely heavily on donations from the wealthy. Capitalism creates jobs for those who would otherwise be unemployed.