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.

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The 7 brilliant arguments Theresa May once made against Brexit

Just in case you missed them. 

“Just listen to the way a lot of politicians and commentators talk about the public,” the Prime Minister Theresa May told the Conservative party conference in October. “They find your patriotism distasteful, your concerns about immigration parochial, your views about crime illiberal, your attachment to your job security inconvenient.

“They find the fact that more than seventeen million votes decided to leave the European Union simply bewildering.”

Of course, there was a time not that long ago, when May too found the idea of Brexit pretty bewildering herself. Nicknamed “submarine” during the EU referendum campaign for her low-key support for Remain, she nonetheless had made up her mind it was the right thing to do. 

In a recording obtained by The Guardian, she told an audience at Goldman Sachs that “the economic arguments are clear”. She continued: 

“I think being part of a 500m trading bloc is significant for us. I think one of the issues is a lot of people invest here in the UK because it’s the UK in Europe. 

“I think if we were not in Europe, there would be firms and companies who would be looking to say do they need actually to develop a mainland European presence rather than a UK presence.

But if that hasn’t convinced you, luckily May also made a public case for Remain on 25 April 2016. Here are some of her best points:

1. There’s no such thing as total sovereignty

At conference in October, May said Britain was leaving “to become, once more, a fully sovereign and independent country”. 

But in April, she said that “no country or empire in world history has ever been totally sovereign”. Nation states, she said, have to make a trade off between agreeing to cede some sovereignty “in a controlled way” to prevent a greater loss of sovereignty in an uncontrolled way, such as “military conflict or economic decline”. 

2. It's safer to Remain

In her conference speech, May said she wanted a Brexit deal to include “co-operation on law enforcement and counter-terrorism”. 

In April, though, the then-Home secretary thought it would be a lot simpler just to stay in the EU. She predicted that while a Brexit Britain would still share intelligence, “that does not mean we would be as safe as if we remain”.

For example, May helpfully pointed out, a Britain outside the EU would have no access to the European Arrest Warrant, which allowed her department to extradite more than 5,000 people from Britain to Europe in the last five years. 

She also distinguished between the EU’s freedom of movement rules, and border checks, declaring: “Some people say the EU does not make us more secure because it does not allow us to control our border. But that is not true.”

3. Rules are better than no rules

At conference, May said Brexit would mean “our laws made not in Brussels but in Westminster”. Anyone who believed they were a “citizen of the world” was in fact “a citizen of nowhere”. 

Back in April, she had a more nuanced view. She said Europe had “stumbled its way to war in 1914” because of the “ambiguity of nations’ commitments to one another”. 

She declared: “Nobody should want an end to a rules-based international system.” Although, she did add that reconciling these international systems with democratic government was “one of the great challenges of this century”. 

4. It could break up the UK

In her speech at conference, May took aim at the Scottish Nationalist Party when she blamed “divisive nationalists” for threatening to drive the UK apart. 

When she spoke in April, though, it seemed she might be talking about a different set of nationalists. “If Brexit isn’t fatal to the European Union, we might find that it is fatal to the Union with Scotland,” she warned. 

Scots are more likely to be in favour of the EU than voters in England and Wales, she noted: 

“I do not want the people of Scotland to think that English Eurosceptics put their dislike of Brussels ahead of our bond with Edinburgh and Glasgow. I do not want the European Union to cause the destruction of an older and much more precious Union, the Union between England and Scotland.”

5. Brexit endangers Britain’s financial services industry

In her conference speech, May described London as “the world’s leading financial capital”. 

But according to May circa April 2016, it might not be for much longer. She warned that outside the EU: “There would be little we could do to stop discriminatory policies being introduced, and London’s position as the world’s leading financial centre would be in danger.”

6. Negotiating trade deals won’t be easy

May is a believer in free trade – her conference speech was peppered with references to it – and she has appointed Liam Fox as International Trade secretary to broker new deals.

And she knows how hard that will be. In her April speech, she noted Britain would have to replace 36 existing trade agreements with non-EU countries: “While we could certainly negotiate our own trade agreements, there would be no guarantee that they would be on terms as good as we enjoy now.”

7. Nor is staying in the single market

Even in April, May was clear she thought Britain could survive Brexit, but she was not sure whether it would do so better off.

As she put it: 

"The reality is that we do not know on what terms we would win access to the single market.  We do know that in a negotiation we would need to make concessions in order to access it, and those concessions could well be about accepting EU regulations, over which we would have no say, making financial contributions, just as we do now, accepting free movement rules, just as we do now, or quite possibly all three combined.  

"It is not clear why other EU member states would give Britain a better deal than they themselves enjoy."

Couldn't agree more, Prime Minister. 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.