, and to build prosperity.
The state of the Soviet bloc by the time the Iron Curtain fell, or of China at Mao's death, should make thecase against the alternative more powerfully than I ever could. As
the American writer and philosopher Ayn
Rand once put it:"The difference between a welfare state and a totalitarian state is a matter of time."
The difficulty with capitalism is that some capitalists do dirty things with other people's money: such as the scam this week, in which someonemay have walked off with £100 million profit after spreading false rumours about the state of HBOS. We reported yesterday the existence of adirty tricks department in a hedge fund that tried, maliciously, to move markets. The authorities here rightly come down heavily on such practices- or say they do. But capitalism is global. The HBOS scam is thought to have originated in the Far East, possibly in Singapore. Punishing peoplewho commit crimes in our jurisdiction is one thing. Punishing those who do it abroad, but affect us here, is less easily handled.Many seem to think that dishonest practices such as these have only been invented since capitalism entered its latest, rampant phase since the late1980s. I'm afraid this is not so. At Easter, we might remember Christ throwing the moneylenders out of the temple; or the expulsion of the Jewsfrom England by Edward I in 1290, partly because they were accused of clipping the edges off coins, putting them back into circulation andmelting down the parings into bullion. More recently, insider trading was considered quite normal until a few years ago. It was indeed disclosed -though, sadly, not until after his death in 2005 - that Sir Edward Heath had benefited from this in the 1960s, becoming rich thanks to share tipsgiven him by insiders who wished to curry favour with him when he led the Tory party.But now that almost all of us have a stake in this system - whether directly through investments that we hold, or through our pension funds andlife assurance policies - it matters more than ever that capitalism should be run fairly. If confidence in capitalism is destroyed by thieves and other brands of criminal, then we are finished. I am in no doubt that anyone found to be running a dirty tricks department within British jurisdictionshould be prosecuted and, if convicted, sent to prison and fined a sum relevant to the proceeds of their theft. We deserve no less from justice.But what if the originators of such crimes are abroad? If they are in a jurisdiction that understands the importance of upholding the rules (and Isuppose Singapore, which did for Nick Leeson and Jim Slater, is one such), then I trust we can rely on the co-operation of authorities in thosecountries to come down heavily on transgressors. Some jurisdictions may not be so willing to enforce the rules, and in that case we have to getnasty. Strict economic sanctions by all developed nations against such states, of the sort America has operated for half a century against Cuba,may be the only way to deal with it. In the internet age, policing becomes a nightmare.It is, however, only because capitalism is now global that our prosperity is now so significant. It brings with it risks other than those simply of economic judgment. If we have the will to punish the crooks the means ought to follow.
And if we still think capitalism isn't worth thecandle, let us recall that the alternative ends in the gulag.