About a year ago, I took part in a panel discussion on the curious rebirth of socialism as a hip youth movement. One of the panellists, Guardian and Jacobin columnist Dawn Foster, claimed that the rise of “Millennial Socialism” was merely a response to the failures of capitalism: “The reason that socialism is becoming so popular is simply because for so many people, capitalism simply isn’t working.”
The belief that popular ideas are popular because they “work”, while unpopular ideas are unpopular because they “don’t work”, is heart-warmingly naïve. But if there were any truth in it, socialism would have been discarded by 1989 at the very latest. The popularity of ideas has little to do with whether they “work” or not. It has much more to do with how emotionally appealing they are, and how much social prestige they carry.
Anti-capitalism, in particular, has nothing to do with any objective “failures” of capitalism. Anti-capitalism is based on an emotional, visceral dislike of the market economy, and anti-capitalist arguments are just a post-hoc attempt to rationalise that gut feeling. 70 years ago, the Austrian economist Joseph Schumpeter wrote that “capitalism stands its trial before judges who have the sentence of death in their pockets. They are going to pass it, whatever the defence they may hear”.
That is still very much the case today. Even when private enterprise saves the day, anti-capitalists still manage to find fault in it somehow. The past two weeks have been full of good news. First, US pharmaceutical giant Pfizer and their German partner BioNTech announced a major breakthrough in the development of their pioneer Covid vaccine: a late-stage clinical trial had shown an efficacy rate of just over 90%.
Mass rollout is likely to take off at the end of this year. Pfizer and BioNTech had become the white knights of the Covid saga – until a competing white knight rode into town, threatening to steal the show from them. The US biotech company Moderna announced that their own Covid vaccine had shown an even higher efficacy rate, as well as being easier to administer.
And today, AstraZeneca have announced that with the right dosing regimen, their “Oxford Vaccine” could also have an efficacy rate of up to 90 per cent. We basically have a competitive market in Covid vaccines now.
Three cheers for capitalism, competition, and private enterprise! Just two weeks ago, plenty of knowledgeable people were still warning that a vaccine may be years away, and that an efficacy rate of 50 per cent would already be pretty good. Now, we are arguing about the pros and cons of different Covid vaccines. If I were an anti-capitalist, I would now go into hiding for a couple of weeks.
Alas, socialists are doing the exact opposite: they are doubling down. Jeremy Corbyn, technically now just a backbench MP, but still widely revered on social media (and the de facto eternal leader of Britain’s socialist Left) tweeted: “A vaccine should not become a privatised commodity used for corporate profiteering.”
It is an odd turn of phrase: the vaccine cannot be “privatised”, because it was never state-owned in the first place. It is almost as if Corbyn was just unthinkingly repeating the usual anti-capitalist clichés.
Meanwhile, Corbyn’s unofficial press secretary, the socialist writer Owen Jones, wrote in the Guardian: “Pfizer’s CEO cashing in on the vaccine news […] should cause more than discomfort. […] [C]oronavirus should serve as a reminder of the disastrous consequences of leaving a life-saving industry in the hands of a profiteering monopoly. […] [D]on’t give kudos to a pharmaceutical industry that is as dysfunctional as it is morally bankrupt.” Jones’s and Corbyn’s main problem seems to be that some people will make money from defeating Covid. Their solution to this “problem” is the same as their solution to everything else: wholesale nationalisation.
There are, indeed, some long-term issues with Big Pharma. On average, large pharmaceutical companies earn profit margins of nearly 14 per cent, which is almost twice as high as the margins earned by comparable companies in other sectors. This suggests substantial market power, which should concern supporters of capitalism.
We should, however, be profoundly relaxed if people make a killing by ridding us of Covid. Markets reward risk-taking, and pharmaceutical research is an extremely risky business, in which most things fail. And whatever profits the pharma giants will make from this, it will be a pittance compared to the cost of Covid, which, remember, has shaved one tenth off the UK economy in 2020.
The Covid money has started to roll in. The founders and lead scientists of BioNTech, Uğur Şahin and Özlem Türeci, are now estimated to be among the 100 richest people in Germany. They may well be the world’s first Covid billionaires. And good on them! Hopefully, more people will join their ranks, as we move out of this mess.
Dr Kristian Niemietz is Head of Political Economy at the Institute of Economic Affairs (IEA). He is the author of the books Socialism: The Failed Idea That Never Dies and Universal Healthcare Without The NHS.