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.

How Jim Murphy's mistake cost Labour - and helped make Ruth Davidson

Scottish Labour's former leader's great mistake was to run away from Labour's Scottish referendum, not on it.

The strange revival of Conservative Scotland? Another poll from north of the border, this time from the Times and YouGov, shows the Tories experiencing a revival in Scotland, up to 28 per cent of the vote, enough to net seven extra seats from the SNP.

Adding to the Nationalists’ misery, according to the same poll, they would lose East Dunbartonshire to the Liberal Democrats, reducing their strength in the Commons to a still-formidable 47 seats.

It could be worse than the polls suggest, however. In the elections to the Scottish Parliament last year, parties which backed a No vote in the referendum did better in the first-past-the-post seats than the polls would have suggested – thanks to tactical voting by No voters, who backed whichever party had the best chance of beating the SNP.

The strategic insight of Ruth Davidson, the Conservative leader in Scotland, was to to recast her party as the loudest defender of the Union between Scotland and the rest of the United Kingdom. She has absorbed large chunks of that vote from the Liberal Democrats and Labour, but, paradoxically, at the Holyrood elections at least, the “Unionist coalition” she assembled helped those parties even though it cost the vote share.

The big thing to watch is not just where the parties of the Union make gains, but where they successfully form strong second-places against whoever the strongest pro-Union party is.

Davidson’s popularity and eye for a good photo opportunity – which came first is an interesting question – mean that the natural benefactor in most places will likely be the Tories.

But it could have been very different. The first politician to hit successfully upon the “last defender of the Union” routine was Ian Murray, the last Labour MP in Scotland, who squeezed both the  Liberal Democrat and Conservative vote in his seat of Edinburgh South.

His then-leader in Scotland, Jim Murphy, had a different idea. He fought the election in 2015 to the SNP’s left, with the slogan of “Whether you’re Yes, or No, the Tories have got to go”.  There were a couple of problems with that approach, as one  former staffer put it: “Firstly, the SNP weren’t going to put the Tories in, and everyone knew it. Secondly, no-one but us wanted to move on [from the referendum]”.

Then again under different leadership, this time under Kezia Dugdale, Scottish Labour once again fought a campaign explicitly to the left of the SNP, promising to increase taxation to blunt cuts devolved from Westminster, and an agnostic position on the referendum. Dugdale said she’d be open to voting to leave the United Kingdom if Britain left the European Union. Senior Scottish Labour figures flirted with the idea that the party might be neutral in a forthcoming election. Once again, the party tried to move on – but no-one else wanted to move on.

How different things might be if instead of running away from their referendum campaign, Jim Murphy had run towards it in 2015. 

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

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