Multiculturalism and Capitalism

To the vociferous right wing in the UK, multiculturalism and capitalism have little in common

Multiculturalism is considered to be a left wing agenda. The likes of UKIP, see multiculturalism as a way of appeasing minorities at the expense of the anglo-saxon majority. Capitalism on the other hand is promoted by the right, because there is no appeasement, and every business must stand on its own two feet.

I am just back from a business trip to South Africa. And it occurred to me that such a blinkered view as held by some in the UK is incorrect both rationally and empirically.

The rational argument

That there is something left wing about multiculturalism, with a consequence that right wing capitalism cannot share the same agenda, presumably arises because some local authorities in the UK spend money to promote minority ethnic activities. And there is, anecdotally at least, a correlation between how left wing a council is and how much is spent on promoting multiculturalism. Rationally, however, we find it far from easy to connect the promotion of multiculturalism to the rejection of capitalism. The two are not mutually exclusive and an activity can be considered multicultural or not, and it can be considered capitalist or not, quite independently of each other.

The empirical argument

Is there evidence that multiculturalism and capitalism don’t co-exist? I don’t think I’ve observed anything like that. Sure, there are right wing governments who promote some kind of preferential treatment for the majority ethnicity or culture. South Africa was a prime example prior to fully democratic elections. But are these regimes capitalist? I would argue that they are not, not in the true free market expression of capitalism anyway. Generally speaking, capitalism requires the reduction of governmental power, not the central state-controlled power that apartheid South Africa experienced.

Multiculturalism and Capitalism working together

My main reason for being in South Africa was to exhibit at the Investing in African Mining Indaba conference in Cape Town. This is ostensibly a conference where mining companies and mining investors meet. Hwever its purpose has become more general, with mining service companies, equipment manufacturers and national governments also present. (My own relevance to the event was to help introduce the Euromomney Mining Indices to the mining community.)

It’s clear to me that two things were going on. First, mining is almost entirely a capitalist pursuit. You spend money looking for minerals. You dig holes. You extract minerals from what comes out of the holes. You sell the mineral. Hopefully you sell the mineral at sufficient profit to cover all the aforementioned costs. The money might come from bank loans. But often it comes from investors by way of share ownership. A glance at the list of mining companies listed on exchanges in Australia, Canada, South Africa, UK and USA will reveal that there are hundreds if not thousands of such companies. And if Klondike Strike’s business model is successful, many more will be launched through this crowdfunding initiative.

The second, and for some I have spoken with, quite surprising observation is that the mining industry is not the domain of the white anglo-saxon male. The room was a mix of skin colours, and an even bigger mix of nationalities and cultures. Whatever opinion we might have about mining as an environmentally sustainable industry, or as an ethical employer of people, there’s no doubt that it is multicultural. At first glance it did appear to be male-dominated, though. But organisations like Women in Mining South Africa are trying to help women succeed in mining too.

Multiculturalism and Capitalism live together

I was tempted to finish that sentence with “…in perfect harmony, side by side on my piano keyboard”, with apologies to Stevie and Paul. But that would have been crass. My point is that if capitalism is to be expressed in its most effective form, multiculturalism is surely a consequence. Any attempt to obstruct the involvement of any group of people results in a poorer deal for everyone. Or so Adam Smith’s theories go.

So rather than making multiculturalism something that must be forced on people, perhaps we need to see it as a consequence of a healthy community. Or, put differently, if in any market we don’t see a cross section of cultures and ethnicities then the market is probably working sub-optimally. Whether that’s a left wing or a right wing policy is something I’ll leave others to judge.