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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Sadiq Khan is probably London's new mayor - what will happen in a Tooting by-election?

At the time of writing, Sadiq Khan appears to have a fairly comfortable lead over Zac Goldsmith in the London mayoral election. Which means (at least) two (quite) interesting things are likely to happen: 1) Sadiq Khan is going to be mayor, and 2) there is going to be a by-election in Tooting.

Unlike the two parliamentary by-elections in Ogmore and Sheffield that Labour won at a canter last night, the south London seat of Tooting is a genuine marginal. The Conservatives have had designs on the seat since at least 2010, when the infamous ‘Tatler Tory’, Mark Clarke, was the party’s candidate. Last May, Khan narrowly increased his majority over the Tories, winning by almost 3,000 votes with a majority of 5.3 per cent. With high house prices pushing London professionals further out towards the suburbs, the seat is gentrifying, making Conservatives more positive about the prospect of taking the seat off Labour. No government has won a by-election from an opposition party since the Conservative Angela Rumbold won Mitcham and Morden from a Labour-SDP defector in June 1982. In a nice parallel, that seat borders Tooting.

Of course, the notion of a Tooting by-election will not come as a shock to local Conservatives, however much hope they invested in a Goldsmith mayoral victory. Unusually, the party’s candidate from the general election, Dan Watkins, an entrepreneur who has lived in the area for 15 years, has continued to campaign in the seat since his defeat, styling himself as the party’s “parliamentary spokesman for Tooting”. It would be a big surprise if Watkins is not re-anointed as the candidate for the by-election.

What of the Labour side? For some months, those on the party’s centre-left have worried with varying degrees of sincerity that Ken Livingstone may see the by-election as a route back into Parliament. Having spent the past two weeks muttering conspiratorially about the relationship between early 20th-Century German Jews and Adolf Hitler before having his Labour membership suspended, that possibility no longer exists.

Other names talked about include: Rex Osborn, leader of the Labour group on Wandsworth Council; Simon Hogg, who is Osborn’s deputy; Rosena Allin-Khan, an emergency medicine doctor who also deputises for Osborn; Will Martindale, who was Labour’s defeated candidate in Battersea last year; and Jayne Lim, who was shortlisted earlier in the year for the Sheffield Brightside selection and used to practise as a doctor at St George’s hospital in Tooting.

One thing that any new Labour MP would have to contend with is the boundary review reporting in 2018, which will reduce the number of London constituencies by 5. This means that a new Tooting MP could quickly find themselves pitched in a selection fight for a new constituency with their neighbours Siobhan McDonagh, who currently holds Mitcham and Morden, and/or Chuka Umunna, who is the MP for Streatham. 

According to the Sunday Times, Labour is planning to hold the by-election as quickly as possible, perhaps even before the EU referendum on June 23rd.

Henry Zeffman writes about politics and is the winner of the Anthony Howard Award 2015.