In the current London Review of Books, the New Statesman’s lead non-fiction reviewer John Gray assesses the fortunes of the coalition government. The most provocative part of his analysis is that while both Clegg and Cameron are ardent devotees of the free market, they may in, the long run, end up expanding state intervention in the economy:
As a consequence of the financial crisis, the market-based globalisation of the past couple of decades is giving way to a model in which states are the principal actors. Chinese state capitalism has weathered the global crisis better than any market liberal economy and even Russia is less burdened by debt. After the implosion of the American financial system emerging economies need no longer submit to the dictates of a ‘Washington consensus’ that was never implemented in Washington. It might be thought that the current phase of globalisation would allow a greater degree of international co-operation. In some ways, however, this new phase is more disorderly. The retreat of American power has left the world without a functioning monetary regime. Economic imbalances are surfacing in geopolitical rivalries and currency wars, and it is unclear how these conflicts will develop. What is evident is that the era in which states were ready to surrender control of their economies to market forces is over. The postwar welfare state may be history, but governments cannot risk leaving their populations without a shelter against chaos. If social democracy is not a viable option, neither is market liberalism.
A roll-back of the state of the magnitude that the coalition envisages will leave people more exposed to the turbulence of world markets than they have been for generations. Inevitably, they will seek protection.[…]
Cameron and Clegg belong in a generation shaped by the ideas of the 1980s; but in forming the coalition they have demonstrated an impressive ability to break with the past. They may turn out to be the politicians who lead Britain into a new era of statism.