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What will it take to restore trust in capitalism?

Writing in City A.M, Vince Cable, Stephen Kinnock and Populus Co-Founder Andrew Cooper argue that restoring trust in capitalism means moving beyond ideology.

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Despite being a controversial phenomenon since it first came to prominence in the nineteenth century, Capitalism has been the driving force of the most significant and long-term improvement in wellbeing and prosperity in human history.

However, continuous improvement in living standards seems to have slowed somewhat in recent decades and now, for the first time since the early twentieth century, the next generation looks set to end up poorer than their parents. The UK’s productivity has also fallen further behind other countries resulting in stagnant wage growth, with the consequence that large sections of the population no longer feel that they benefit from the way our economy functions.

Research points to a lack of trust in the UK government and business

Recent Populus polling for the Centre for Progressive Capitalism sheds new light on the public’s views towards the UK’s economic system. Almost three quarters of respondents said it is effective at providing opportunities for people from wealthy backgrounds, compared with just 5% who believe it is effective at providing opportunities for those from poor backgrounds to achieve their aspirations. Only 11% say the UK economic system helps people from all backgrounds.

The findings also reveal that the most significant barrier in the way of the younger generation achieving their goals is the shortage of housing, followed closely by the lack of skills and job opportunities.

It is certainly the case that people feel the economic system is skewed in favour of the wealthy and do not trust the government to address the issues that matter most to them.

Public trust in business isn’t much better. In fact, just 16% said they thought big business helps people from all walks of life to achieve their aspirations.

However, the research reveals a strong belief that UK universities and apprenticeship schemes provide genuine tools that enable people to succeed.

Restoring trust in capitalism

These days the age-old debates between left and right politicians about the role of markets and government are looking ever more irrelevant.

Restoring public trust in capitalism is not simply a case of less government intervention and more redistribution. Solutions to the most significant issues, such as housing, will be found through partnerships of committed stakeholders rather than a binary approach that favours either self-regulation or primary legislation.

Equally, businesses should recognise that for many people work is a route to personal fulfilment, as well as financial security, and that ensuring workers are happy and challenged could be a crucial area of focus if the UK’s productivity and wage growth are to improve.

Moving beyond ideology

The newly launched Centre for Progressive Capitalism aims to take a much-needed look at some of the underlying systemic issues affecting our economic system, beyond the traditional political divisions and out-dated ideological labels.

The initiative is sure to spark some thought-provoking dialogue and we look forward to hearing its recommendations for long-term innovations, industrial strategy and changes to governance arrangements.

Populus interviewed 2,053 adults online between 24th – 28th March 2016.

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