Why do the left never quite fully understand the role of capital?

Why do the left never quite fully understand the role of capital, particularly private capital?

Does it go back to Marx and Engels? Does it go back to the Communist Manifesto?

It said ‘the theory of the Communists may be summed up in the single sentence: 

Abolition of private property’.

It also said ‘Capital is a collective product’

Socialists of all hues were seduced by these statements and also by the idea of class division. 

Unfortunately, this process by socialists to downgrade private property has affected their thinking, so that when the Chancellor of the Exchequer proposes a VAT tax on school fees there is very little consideration of the consequences of capital costs or capital destruction. Similarly with attacks on private medical services.

Thinking of the tax on private education we now know that this has resulted in some private schools shutting and then pupils transferring to the state sector. As there is no plan to take over redundant private schools there will be a need to invest capital to provide places for the pupils who transfer. Of course the socialists may assume that the state structure will just absorb them but even this means that the facilities are spread over a greater number of pupils.

The same goes for private medical services if the government decides to put VAT tax on private medical fees or private medical insurance. In 1948 at the start the NHS hospitals were in effect nationalised for no compensation. I doubt the same would apply if the socialist tried to seize private facilities in the 21st century, and we know that any switch of patients from the private sector to the NHS will only exacerbate an already overloaded system, and in addition involve more state capital requirements.

Any sensible financial policy which understands the need for more and more capital investment will realise that, far from making private provision of education and health difficult, it would be better to encourage possibly with tax relief more and more of the population to go to the private sector. There is not only the benefit of reducing demands on the national budget but the other important benefit of drawing private capital into these two sectors. Look at the dentistry part of health care and you will see how over the years the private sector has poured more and more capital into premises and high-tech equipment and compare it with NHS dentistry. 

This failure to understand the central position of capital has led many left wing governments to go the wrong way. Think of Public Private Partnerships; good idea in principle because it recognised the need to get private capital involved, but they have become a burden in many cases because the running costs were seen but not the actual capital burden over many years. Interestingly taken cautiously by the initiating Conservative administration, but expanded dramatically by the Brown/Blair somewhat moderate but leftwing government.

The lack of understanding of capital and the concentration by socialists on increasing state revenue, and ever growing state involvement has led them into many blind alleys and inefficient solutions. In many countries it has also led to uncontrolled money expansion. 

The success of privatisation in the Thatcher years and followed in many countries was the clearest historic recognition of the efficient use of capital. Sadly the ideologues of the left are seeking to reverse some of this policy and expanding state ownership on borrowed money.

Once again look to quotes from the communist manifesto and see how they despised private capital

In bourgeois society capital is independent and has individuality

And

By freedom is meant, under the present bourgeois conditions of production, free trade, free selling and buying.

Fortunately, the left failed to overthrow so-called bourgeois society and nearly everyone now has capital interests from houses, to pension funds, to cars, to savings, and clubs. Bourgeois society delivered freedom and prosperity not least because it understood the central position of private capital in a successful economy.