WHAT THE WORLD THINKS OF CAPITALISM
YouGov's seven nation opinion poll for the Legatum Institute
OPINION POLL RESULTS – EXECUTIVE SUMMARY
In order to establish public attitudes to the capitalist system and to some of the questions raised in this report the Legatum Institute commissioned YouGov to ask ten questions of populations in ten nations: Britain, the United States of America and Germany (from the developed world) and Brazil, India, Indonesia and Thailand from the faster growing, emerging world. These surveys were conducted in early September 2015. Most answers were received in the days after the turbulence in Chinese equity markets that were popularly described as the "Great Fall of China". The slightly anxious mood of those days might have had some modest effect on the results.
THE BAD NEWS FOR CAPITALISM
· There is an almost universal belief that the world's biggest businesses have cheated and polluted their way to success – with barely ten per cent of respondents in all seven countries surveyed thinking big businesses are 'clean’;
· Contrary to overwhelming evidence substantial majorities in all seven of the nations surveyed agree that the poor get poorer in capitalist economies;
· The populations of Britain, Brazil, Germany and America don’t expect their children to be richer, safer and healthier;
· Majorities of the populations in America, Brazil, India, Thailand and Indonesia support protectionist measures to defend their manufacturing industries from low cost imports and pluralities support restrictions in Britain and Germany – despite their histories as "open economies";
· Negativity is most pronounced in America than in any other of the six countries surveyed – with deep pessimism about the future combining with suspicion about big businesses’ ethics and strong support for protectionism.
THE GOOD NEWS
· For all of the negativity towards capitalism, more people in all seven nations believe that the free enterprise system is better at lifting people out of poverty than government;
· Although doctors, teachers and charity workers may be more admired than business leaders in popularity surveys there is a widespread recognition that entrepreneurs and business leaders are just as important to society;
· The populations of India, Indonesia and Thailand are all more optimistic about the future – especially in India, where 50% of respondents expect life for the next generation to be improved;
· Overwhelming majorities in all seven countries recognise that strong community and family life underpin a strong economy;
· Most countries – other than Germany – recognise that government should spend less on welfare benefits in order to fund greater investment in infrastructure.
THE OTHER NEWS
· By margins of six or seven to one those surveyed recognise that poverty is a bigger problem than inequality and reducing unemployment is a larger problem than cutting the super-rich down to size;
· Only in India is there a majority opinion that business and society’s interests are always well matched – most populations, especially in the mature US, German and British nations, recognise that there are tensions;
· There is an acceptance that the 2008 financial crash would have been worse without the bank bailouts – although Americans and Thais are only marginally persuaded of the bailouts’ benefits.
FREE ENTERPRISE vERSUs GOVERNMENT vERSUS POVERTY
Majorities in each of the seven populations we surveyed agreed that the rich get richer and the poor get poorer in capitalist societies. Even in America 55% believe that capitalism makes the condition of the poorest people worse. On the face of it these are devastating findings. At the very least they suggest that people no longer believe that capitalism is the universal engine for social mobility that it was. The findings are also at odds with reality. The rich are getting rich but so, too, are the poorest. They are getting richer in two ways. Incomes across the world are rising – as World Bank data proves. But there is also the huge spread of medical innovation, access to technology and improved diet. Although some income statistics are contested we only need to look at increased rates of life expectancy to realise that capitalism's gains are widely shared. Perhaps Deirdre McCloskey, the distinguished economic historian, put it best in an article she wrote about the progress of the last two centuries:
"In relative terms, the poorest people have been the biggest beneficiaries. The rich became richer, true. But millions more have gas heating, cars, smallpox vaccinations, indoor plumbing, cheap travel, rights for women, lower child mortality, adequate nutrition, taller bodies, doubled life expectancy, schooling for their kids, newspapers, a vote, a shot at university and respect."
These stubborn if overlooked facts are not the only consolation for friends of capitalism who may be downheartened by the negativity of public opinion. The second opinion finding highlighted above underlines the lack of confidence in the alternative to free enterprise. Even if voters are underwhelmed by capitalism’s contribution to a more equal and socially mobile society they have even less faith in government’s ability to improve the lot of the poor. The results in this regard are particularly spectacular in Brazil and India. By margins of approximately six-to-one Indians and Brazilians believe that free enterprise is a better mechanism for economic progress than government. It is just possible that the Brazilian and Indian experiences of bureaucratic, corrupt and inefficient public administration may have contributed to this view!
The idea that wealth is rooted in sins of some kind or another has deep roots in literature. The French novelist Honoré de Balzac's aphorism about the sources of capitalist fortunes has been adapted many times – including in Samuel Merwin’s "The Gold One" (1922):
“Every great fortune—every one—is founded on evil, usually on crime. In the building of every one there were moments—crises, you understand—when only a criminal act of some nature could save the thing.”
It appears that it is not just writers and artists who hold this low view of capitalism and capitalists. More than 70% of people in Britain, Germany, Brazil, India and Thailand believe that the big business has – to some extent – bought, cheated or polluted its way to success. Even in America 65% believe that “ethical business” is probably not a natural combination. Only 10% of Americans, 6% of Britons and a measly 4% of Germans do not think big businesses are guilty of malpractice. The era of the Libor interest rate fixing scandal and the cheat devices deliberately installed inside Volkswagen’s diesel cars has clearly taken its toll. Scepticism about the ethics of big business (we did not ask about smaller businesses that possibly present a more human face to the public) does not, however, undermine the general sense that successful business is at least as essential to the health of a society as doctors, teachers and voluntary sector workers. Those surveyed may not respect big businesses very much but majorities in every country recognise they are as socially useful as members of professions that we do admire.
There are very mixed views on the extent to which the interests of business and wider society are matched. The developed world populations in our survey are most divided but in India there is no doubt. 51% say what’s good for business is good for society and only 19% beg to differ. In Britain, Germany and especially America there are narrow pluralities in favour of the view that business and society’s interests can often be in conflict. Is this because developed world electorates are more aware of how businesses fail or does the opinion gap between the developed and the emerging world reflect a gap in priorities? The poorest parts of the world hunger for business to get on with its job of creating wealth? In the West there may be more concern about the environmental and other negative side-effects of some business activity.
In their answer to this question I believe we are getting more than an affirmation of "motherhood and apple pie". Respondents are saying something that is perhaps as obvious as it is neglected. Few politicians in any part of the world devote much attention to how to strengthen community and family bonds – certainly not in comparison with their efforts to strengthen economic competitiveness. If effective pro-community and pro-family policies can be developed by policymakers these YouGov findings suggest there could be a big political market for them. Some policy options are discussed in chapter four – on the social foundations of strong economies.
HOPE VERSUS OPTIMISM
The first question in this survey provides the biggest gap between the mature and emerging economies. Half of citizens in Britain, America and Germany do not expect the lives of their sons and daughters to be better than their own. The United States is particularly pessimistic. Just 14% of Americans agree that "the next generation will probably be richer, safer and healthier than the last". More than twice this number are optimistic about the future in Thailand and Indonesia. Three times this number are optimistic in India. It's hard to find more conclusive evidence that the American dream is dying in many American hearts and minds.
We also find a big developed/ emerging world divide in responses to the second question. There is limited willingness in the advanced nations to sacrifice 10% of income in order to secure their job. Only 17% in Britain are willing to accept such a bargain. In sharp contrast 65% of Indian respondents and 67% of Indonesians are willing to take a pay cut in return for job security. This gap in willingness to sacrifice occurs despite comparable unemployment rates between East and West. Cultural factors may be playing a key role.
GOVERNMENT INTERVENTION IN THE ECONOMY
Inequality is the vogue concern of much of the international left but it is not seen as a priority by the people polled by YouGov for this survey. Majorities in all seven nations want their governments to focus on fighting poverty rather than reducing inequality and on creating jobs rather than cutting the super-rich down to an undefined size. This does not mean that the gap between rich and poor does not matter to voters but it is clearly not an overriding priority.
Germany is the only country that rejects the contention that government should spend less on welfare and more on infrastructure. All six other populations support some kind of welfare-to-infrastructure switch. Thailand and India are most supportive of more infrastructure investment.
Pluralities in every population surveyed supported the bank bailouts that took place at the height of the 2008 crisis but only Britain and India give majority support. America – home of the Tea Party revolts – remains particularly sceptical. Just over one-third of Americans are willing to state that the crash would have been more serious if the bailouts had not occurred. Just over a quarter disagree and a large number are still undecided, seven years after they took place. If politicians deem that bailouts are necessary to navigate future crises, public opinion – at least in America – remains divided, even ambivalent as to their wisdom.
Perhaps the question is slightly loaded but, if nothing else, the results for this final question explain why the likes of Hillary Clinton, Bernie Sanders and Donald Trump are all questioning – even attacking - free trade arrangements. Even in India, Thailand and Indonesia – which in answers to other questions there has been strong evidence of hope in the future and suspicion of government intervention – there is substantial support for protectionist measures to defend manufacturing industry. Free trade has never been particularly popular and in 2015 a protectionist politician is still working with the grain of public opinion.
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