IT is always a pleasure to see Ian Johnstone of Peterhead pen a letter to the editor of

The National protesting at one of my columns. Although he and I seldom agree about much, I usually need to stop and think before I take the argument a stage further.

Last week, Ian wrote in about the respects I was paying to the International Monetary Fund, where the house journal had just heaped praise on a book by a young Scottish professor, Mark Blyth, now holding a chair at a prestigious Ivy League institution in the US, Brown University, Providence, Rhode Island (an alma mater of my own, so I liked it all the better).

Blyth, a Dundonian and graduate of Strathclyde University, would himself count as a leftie by the admittedly not very exacting standards of the international economic professoriate. His latest book, Angrynomics, looks at the confusion that has enveloped his discipline since the turn of the 21st century. In this time, the old certainties that had ruled for most of the previous century were overthrown by the complexities of our real world, which academic economics does not understand and cannot explain. That can be even more embarrassing when the professors are obliged to teach it to the younger generation.

One big difficulty is that while, over the 75 years since the end of the Second World War, the world’s problems have changed several times over, the supervisory agencies we set around them have not.

Then as now, the International Monetary Fund was the centrepiece. It is not a place for people who like to be popular. A typical view was expressed by Ian Johnstone in his letter, when he called it “a giant loan agency that incurs for its desperate client user countries a trail of indebtedness that commits them to right-wing, anti-public-spending policies with long-term miseries for most of the population: the price for its short-term relief infamously too much”.

Rather than try to rebut this robust polemic point by point, I think I should pause for a moment to ask what the world would be like if we had no IMF to supervise the international trading community.

For a start, we would be enjoying nothing like the profusion of goods and services from all over the world that we can see and buy in any western supermarket, from American computers to Japanese cars, from French wine to Australian wool, put there in part by competition among the producers. In other words, our standard of living would be lower, not least because our own productivity would be less.

Instead, we have an on-the-whole-stable international monetary system set up and supervised by the IMF. True, it does not, in every country or in every year, succeed in running the system according to an ideal of prosperity. But up to now it has done enough, just enough. No other organisation could do the same.

Of course, the world of today is different from the world of 1945.

At the outset, the IMF was a safeguard for most nations after the terrible experiences during the war, under guarantees accepted and enforced by the victorious powers, of which, of course, the US was by far the greatest.

But American behaviour was not always blameless. The worst consequence came when in 1971 President Richard Nixon took the US dollar off the gold standard – that is, it was no longer to be directly convertible into a fixed quantity of gold. The IMF then had to change its methods of promoting and protecting stability. Now countries could choose their own arrangements for currency exchange, and the IMF was there to help them. It was a job rendered even more complex with the jump in oil prices that soon followed, before a further spell of turbulence at the collapse of communism and the introduction of one-third of humanity to market forces in place of phoney plans.

READ MORE: Why Scotland should not turn to socialism to fight Covid-19

TODAY, the IMF still plays a central part in efforts such as those to overcome the effects of the global financial crisis of 2008. It was making only slow progress anyway, but not a dozen years had passed before the whole scene was thrown into confusion once again by the outbreaks of coronavirus.

I don’t think I will venture a forecast of when they might be over. But I do dispute they are the next nails in the coffin of capitalism.

Should anybody disagree, I’d like them to say exactly what system is going to replace capitalism, in all the different countries and circumstances it operates, from street stalls in the backwoods of Burundi to the trading screens of the hedge fund managers in the City of London or on Wall Street.

In every case the basic task performed is the same, a transfer of resources from where they are being less efficiently used to where they are being more efficiently used. That is what makes the world go round, each time a bit faster.

Let me address one particular group of capitalism’s critics, who perhaps form a majority of those writing letters of protest about it to the editor of The National.

Many of them define themselves as socialists, without being too clear what they mean by that. Socialism, at the most sophisticated level it has yet reached in the Soviet bloc before 1989, was still a complete failure in offering adequate rewards to the toiling masses who tried to keep it going in their decrepit factories and farms.

That was why socialism collapsed, to be replaced by capitalism – of a rather peculiar kind, admittedly.

The nearest equivalents remaining in the western bloc, such as the Scandinavian countries, of course practised capitalism in the real world, only with the sort of generous welfare systems that its successful operation could guarantee them.

We in Scotland, too, envy them their generous capitalism, usually without reflecting that generous capitalism also requires successful capitalism, or a resolute pursuit of the most profitable opportunities. It is no use subsidising sloppiness or bailing out breakdowns and bankruptcies. We should remind ourselves that capitalism does not succeed just because we would like it to succeed. We need to create the conditions in which it will succeed, and then leave capitalists to get on with it.

Of course, Nicola Sturgeon and her Government take another view, that politicians know better than capitalists. She herself has said: “I think unregulated capitalism is a force for bad and I think we need much more regulation, and I am not opposed to more state ownership where that is appropriate.”

Missing from this explanation is any idea of how her regulated or even nationalised companies are to maintain themselves against competition that is fiercer than any they can offer. Then they would win their battles in markets rather than in scuffles over official subsidy.

I’d finally say to Ian Johnstone that since capitalism as supervised by the IMF is the only economic system an independent Scotland is ever likely to follow, it might be wise to consider how its virtues can also work to our advantage.

Many small countries have had that experience. None has ever done well out of socialism.