What really makes capitalism work

Nicola Horlick
Bramdean Asset Management

Nicola Horlick responds to Hugh Davidson's article, 'Only consumers can make capitalism work'.

In his excellent article, 'Only consumers can make capitalism work' (Market Leader, June 2012), Hugh Davidson raised a number of interesting points in relation to the future of capitalism following the financial crisis. I remain strongly of the opinion that capitalism is not perfect but that recent history shows that it is the only viable system. However, I do not believe that consumers are the only ones who make capitalism work.

Capitalism only truly prospers in a democracy and in an environment where there are free markets. The emergence of China as a major economic power, while still under the rule of the Communist Party, seems to challenge this assertion. However, China has achieved this position by being prepared to take on the role of the world's lowest-cost manufacturer without regard to the environmental impact or the rights of its people to fair wages and other basic employment rights.