Is Boris right about capitalism?

Boris Johnson’s Margaret Thatcher lecture last week gave an insight into the way his mind works.

Boris Johnson's Margaret Thatcher lecture last week was "highly illuminating" about the way his mind works, says Andrew Rawnsley in The Observer. He contends that "greed" and the "spirit of envy" are "not vices to be regretted, but virtues to be lauded", because they are "a valuable spur to economic activity". Yet profit pursued for its own sake is "usually the most disastrous way to run a business". It is worrying that the mayor "does not understand the difference between successful and destructive capitalism". His other "not terribly controversial" notion, that humans differ in natural abilities and that some of this is inherited (he said inequality was inevitable when 16% have an IQ below 85 and just 2% above 130), is objectionable only because of the implication that the "poor are poor because they are born stupid"; the rich, rich because of a "genetic windfall" and that there is nothing to be done about it.

He did say that some people will always find it easier to get ahead, says Peter Dominiczak in The Daily Telegraph. He also said that the gap between the rich and poor has grown too wide, and that more must be done to ensure that talented people from less wealthy backgrounds can "rise to the top". He hinted that grammar schools were the solution, says Philip Collins in The Times. But the real problem is that there are simply fewer jobs atthe top. In 1900, 18% of jobs were classified as belonging to the top two social tiers. By 1958 that had risen to 42%. Then that growth slowed down. "Social mobility is about the structure of the economy."

In the main, Boris had "good and important things to say", and much of his speech was either overlooked or misconstrued, says Daniel Finkelstein in The Times. What bothered me most was the suggestion that he was "glorifying unpleasantness" by saying that greed and envy were useful motivators. The "genius of capitalism" is that it tries to harness our natural acquisitive instinct to the common good. My iPad wouldn't exist without the "fanatical drive" of Steve Jobs, a man who "lusted" after power and money.

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It's true that capitalism can fail to "turn greed into something that serves the consumer. It allows people to create monopolies, or pay themselves money unrelated to their contribution to the economy. These are "serious failings". Yet the advantages outweigh the disadvantages. The splitting of the Korean Peninsula was as "near as one is ever likely to get" to a controlled experiment in how best to harness human greed and "its results are remarkable". Essentially, the North starved while the South thrived. Greedy people like Kim Jong-il exist everywhere, so they might as well be put to work doing something helpful. "I think that's what you meant, Boris, isn't it?"