Capitalism has always depended on state patronage

Even after the state has saved capitalism from itself, Simon Heffer continues to lionise the free ma

Simon Heffer's assertion in today's Daily Telegraph that the free market will recover once politicians "stop interfering" is both historically and economically illiterate.

His claim is particularly galling at a time when the state has once more been forced to save capitalism from itself. But more than this, the right-wing belief in a golden age when Thomas Jefferson's dictum, "that government is best which governs least", was obediently followed is a delusion. From its birth in the 18th century onwards, capitalism has always depended on stage patronage.

It is therefore ironic that Heffer should continue to lionise America as the "home of capitalism", a country where corporate welfare was growing long before the financial crisis. Heffer is fond of attacking New Labour's "client state", populated by public sector workers and welfare claimants, but he conveniently ignores the rows of corporate claimants at home and abroad.

For instance, a 2008 report by the Cato Institute estimated that in 2006 the US government spent $92bn on subsidising corporations such as Boeing and General Electric. It was Gore Vidal who first identified this collusion between the state and monopoly capitalism as "capitalism for the poor and socialism for the rich".

It is equally disingenous of Heffer to hail Barclays' £3 billion profit as a sign that we are returning to business as usual. As my colleague Mehdi Hasan pointed out earlier this week, while the government may not have taken shares in Barclays, it did provide significant loans and guarantees to the bank.

After the humiliation of Big Finance this year, one continues to long for some modesty from its cheerleaders.

George Eaton is political editor of the New Statesman.

Photo: Getty
Show Hide image

What Jeremy Corbyn gets right about the single market

Technically, you can be outside the EU but inside the single market. Philosophically, you're still in the EU. 

I’ve been trying to work out what bothers me about the response to Jeremy Corbyn’s interview on the Andrew Marr programme.

What bothers me about Corbyn’s interview is obvious: the use of the phrase “wholesale importation” to describe people coming from Eastern Europe to the United Kingdom makes them sound like boxes of sugar rather than people. Adding to that, by suggesting that this “importation” had “destroy[ed] conditions”, rather than laying the blame on Britain’s under-enforced and under-regulated labour market, his words were more appropriate to a politician who believes that immigrants are objects to be scapegoated, not people to be served. (Though perhaps that is appropriate for the leader of the Labour Party if recent history is any guide.)

But I’m bothered, too, by the reaction to another part of his interview, in which the Labour leader said that Britain must leave the single market as it leaves the European Union. The response to this, which is technically correct, has been to attack Corbyn as Liechtenstein, Switzerland, Norway and Iceland are members of the single market but not the European Union.

In my view, leaving the single market will make Britain poorer in the short and long term, will immediately render much of Labour’s 2017 manifesto moot and will, in the long run, be a far bigger victory for right-wing politics than any mere election. Corbyn’s view, that the benefits of freeing a British government from the rules of the single market will outweigh the costs, doesn’t seem very likely to me. So why do I feel so uneasy about the claim that you can be a member of the single market and not the European Union?

I think it’s because the difficult truth is that these countries are, de facto, in the European Union in any meaningful sense. By any estimation, the three pillars of Britain’s “Out” vote were, firstly, control over Britain’s borders, aka the end of the free movement of people, secondly, more money for the public realm aka £350m a week for the NHS, and thirdly control over Britain’s own laws. It’s hard to see how, if the United Kingdom continues to be subject to the free movement of people, continues to pay large sums towards the European Union, and continues to have its laws set elsewhere, we have “honoured the referendum result”.

None of which changes my view that leaving the single market would be a catastrophe for the United Kingdom. But retaining Britain’s single market membership starts with making the argument for single market membership, not hiding behind rhetorical tricks about whether or not single market membership was on the ballot last June, when it quite clearly was. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.