This is a bit of a stretch.
Even Douglas Carswell, one of the more right-wing MPs among the new Conservative intake, has joined the fray, arguing that \”the free market all too often turns out not to be a free market at all, but a corporatist racket for the few\”. That judgment was approvingly quoted by Dominic Sandbrook, the Daily Mail\’s favourite historian, who castigated the capitalist system\’s inability to deliver on its most fundamental promise: equality of opportunity.
To paraphrase Aretha Franklin, when it comes to the critique of capitalism, the Tories are doing it for themselves.
It\’s a reasonable enough critique. It\’s one I would sign up for myself.
Now that the Vatican has a British ally in Charles Moore, the biographer of Margaret Thatcher, the time is ripe for Labour to resume the corrective role that it performed with such distinction in the postwar period. Different solutions and approaches will be required for a different world, although some of the features of \”the golden age\” – capital controls and an enhanced role for reformed trade unions – may be worth revisiting. But the starting point is to recover some of the old moral dynamism that gave the party its reason for being in the first place.
The summer of 2011 may well be remembered as the moment at which it became clear that global free markets are as incapable of perfect self-regulation as the News of the World.
This is not reasonable and isn\’t something that I would sign up for.
That capitalism, or markets (two very different things recall) require regulation is not in doubt. The interesting questions though are who regulates what and how?
To this interesting set of questions there are, very roughly speaking, to possible sets of answers.
The liberal answers and the Statist answers.
The initial diagnosis, fine, let us run with it. We do not in fact have \”free market\” capitalism, we have a form of crony capitalism. Those doing just fine from the current system do so because they\’ve been able to protect themselves from upstarts. If you like, the bankers have been able to socialise losses. Further, large companies can crush the competition from upstarts as regulations are composed that weigh more heavily upon new companies than extant ones. The established piss on the marginal: this is as true of requiring CORGI accreditation to be a gas fitter as it is the 5,000 tonnes* of paperwork required to build a nuclear power plant.
We\’re in exactly what Adam Smith railed about, a world in which those already rich, those politically connected, get to manipulate the rules in favour of those already rich and politically connected.
I don\’t think there\’s be all that much argument from the left side of the aisle on this?
Good, so we\’ve two possible solutions. We can go down the route of more state regulation of all of these things. However, there are two problems with this.
1) We\’ve already tried that. We tried it for a number of decades and in the end, we found that it didn\’t work.
2) These privileged positions of those who are already rich and politically connected come because they are already rich and politically connected. We\’re thus trying to argue that we should use precisely the system that gives them their privileges to deny them such privileges. As Adam pointed out, this isn\’t likely to work.
The other solution is to let markets do what markets are good at: forcing competition upon those who would rather not face competition. That is, the solution to a cartelised market is to free the markets. Tear down the regulations which protect the incumbents, have a bit more of those gales of creative destruction.
This is known as the \”liberal\” solution to the problem we agree that we\’ve jointly identified.
In short, when markets fail us because of political cronyism the solution is not more politics and cronyism but more markets.
*Made up number.