Please Jonathan, learn what words mean:

The Black Monday of 2008, which saw £77bn wiped off London share values, was matched at one point yesterday on Wall Street, where even a drastic emergency cut in interest rates could not prevent wild volatility.

Volatility means changes in prices. Both up and down. The aim of cutting interest rates was in fact to increase volatility: they wanted to make share prices go back up again after they had fallen. So they didn\’t in fact want to prevent wild volatility, they wanted to cause it. Sheesh.

For they suggest turbo-capitalism is not just unfair – it is dishonest and dangerous. If that sounds excessive, focus, if you will, on the banking sector at the heart of today\’s mess. It was the reckless gobbling up and selling on of shaky subprime loans – mortgages given to bad-risk customers – by American banks, and the threat that those debts would never be paid back, that triggered the entire loss of confidence that stopped banks lending to each other and caused the run on our own Northern Rock. Those sub-prime debts were dodgy, but they were wrapped up and sold on as if they were triple-A-rated, pukka debts, as solid as a government bond.

That was dishonest – and you need only look at the cost to the taxpayer of Northern Rock, £24bn in loans and another £30bn in guarantees, to see how dangerous it has been for our economy and, given the diversion of public money that could have gone elsewhere, for our entire society.

The American banks have already owned up to $100 billion in losses on such products: those who made the mistake (the dishonesty if you must) have paid the price: we\’re not going to see this particular mistake repeated in our lifetimes. Please also note that all of this has happened before the bureaucrats have finished sharpening their pencils. Yes, markets do go wrong, as does any other system inhabited by human beings. The question is, what system clears up such mistakes best? Markets or those guys still working away with the penknives on their pencils?

As to Northern Rock, I\’ve not heard that their own loans sold on (the Granite paper) have defaulted. That was a different mistake, one of borrowing short and lending long (which all banks do) on a larger scale than was prudent. What\’s made that problem greater than it could and should have been is precisely that we\’ve got the pencil sharpeners looking for a political solution. Twenty years ago there would have been some City heads knocked together (if indeed NR hadn\’t been stopped from pursuing the path it did in the first place) and we\’d have had a messy, but adequate, solution back in August.

You could argue that capitalism is always like this, parasitical on the state.

Well, some of us do indeed argue that, that capitalism, in the form of big business, always tries to be parasitical on the State. Seeking rents and privileges. Which is why we argue that the State should not have the power to grant such rents and privileges. But that\’s not I think what you are arguing.

Whether it\’s the internet businesses that would be nowhere had it not been for the government research and development that created the web,

Grr, grr. The internet and the web are two very different things. The internet was indeed trialled by the US DoD. The web was something very different indeed, knocked together by one man over a week or two. That Sir Tim Berners-Lee was working at CERN at the time is pretty much irrelevant.

or the vast agribusinesses and others dependent on the "corporate welfare" of state subsidy – an estimated $92bn a year in the US, according to the libertarian Cato Institute – it\’s time to admit there is no such thing as a free market.

No one rational ever tries to state that there is, ever has been or ever will be a free market in anything. Markets are always constrained: it might be by customs, by law, by habit, but there are always constraints. There must be, for how can you have a market without a delineation of property rights?

The argument isn\’t "free markets" or "not free markets". It is always "freer markets" or "less free markets". And one very important part of the argument for freer markets is that we want to reduce the ability of people, whether they be unions, corporations, individuals, classes, professions, whatever, to seek rents and privileges from the State.

It is of course lovely that you quote Cato: but it would be interesting if you understood the point that they\’re trying to make. Archers Midland Daniel is as much a danger to, a leech upon, freer markets as the minimum wage or the UAW. And Cato (along with people like the ASI) are one of the few groups who proclaim this evident truth loudly enough that even you should be able to hear it.