The idea that underpins this suggestion is that neither the state or private sector is inherently better than the other. It is obviously the case that to get the best out of the economy you need both. The cappuccino is a metaphor for this this.
The state is the cup. The economy exists within it for the purposes of this example. (Of course it extends beyond it but that is for another blog; just think about the coffee shop if you want to anticipate the direction travel).
The espresso on the bottom is the government. It shapes and moulds the whole thing. If it is good, then pretty much the whole thing will be, and vice versa.
The frothy milk is the private sector that builds on the foundation of the state.
And on the top is some chocolate or nutmeg which is the thing we all see, and because in real life this represents the frivolities that feature in Sunday colour supplements we think that the private sector, that almost always produces them, is the source of the fun things in life when in fact without the state, and the mundane functions of the market, they would not be possible.
The reality is that in practice a cappuccino stands or falls as a whole. It’s hot frothy milk without the espresso. It is just an espresso without the milk. Both are acquired tastes for some. Many think the compromise – with the fun bits on top – is best. But most importantly, when drunk you can’t tell the component elements apart.
OK. Fine in fact.
My aim is for a cappuccino economy: one where state and private sectors both flourish because each is allowed to do what it does best. We’re a long way from being there right now.
And in my opinion that’s because the espresso is too weak right now. We need an extra shot.
Ah, no, that’s where I don’t. This is also where Ritchie’s complete absence of any economic hinterland shows. For the idea is some 240 years old:
Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.
Entirely true that we need that espresso of decent governance. But it’s strong stuff, we only need a little.