.One of the least attractive traits on the political right is the tendency to demonise any state involvement in business & enterprise and romanticise the private sector beyond all proportion. In his thoughtful and intelligent response to the Northern Rock story Will Hutton in the FT demolishes this nicely:
Hutton's grasp of what this relationship is really like shames both main parties - Labour because its desire to demonstrate its rejection of socialism means it can't bring itself to be tough on business when it needs to be and the Tories because of their continued belief that any state interference is somehow inimical to successful enterprise.
"....there is an ongoing symbiotic relationship between the state and enterprise, of which nationalisation is the ultimate example. There are few companies in the FTSE 100 that have not in some way had their franchise today shaped, supported and helped by government action. Companies are embedded in the society in which they trade. They use its transport system and public buildings; their staff are educated and trained by public institutions; their consumers live in the same territorial jurisdiction; their ideas, values and processes are borrowed from the society around them. They are shaped by public law, custom and practice and foreign policy. The free-market fundamentalist proposition that the market is the spontaneous natural condition and any form of public interaction is therefore unnatural – which feeds Northern Rock shareholders’ extraordinary sense of entitlement – is to misdescribe reality. Claims that the public’s embrace is an automatic palsy on enterprise are just ideological. Both sectors are indispensable and interdependent"Quite. And of course, with only slight alterations in tone and focus that paragraph would serve equally well in demolishing the all too common belief on the left that private enterprise is inherently unethical or selfish and provides few soft benefits for society.
Hutton's grasp of what this relationship is really like shames both main parties - Labour because its desire to demonstrate its rejection of socialism means it can't bring itself to be tough on business when it needs to be and the Tories because of their continued belief that any state interference is somehow inimical to successful enterprise.
3 Comments:
"There are few companies in the FTSE 100 that have not in some way had their franchise today shaped, supported and helped by government action."
Most government involvement in anything mercantile is caustic, distortive and corrosive.
The word Franchise is a dead giveaway, the State has no right to control franchises beyond enforcement of contract law, franchises screw up markets.
"The free-market fundamentalist proposition that the market is the spontaneous natural condition and any form of public interaction is therefore unnatural – which feeds Northern Rock shareholders’ extraordinary sense of entitlement – is to misdescribe reality" - Not quite. NR shareholders have legitimate expectations as to ownership rights, and to compensation if nationalised, as opposed to going into administration, which may give them some of their capital back. The unresonable expectation I have heard comes from small shareholders bemoning their loss of the only stock they held. This illustrates two things. One a complete ignorance about investing as a small investor and of risk, and two how they have been led to believe in a culture without risk in which they will always be compensated. It's never their fault.
Indeed Hutton's comment could well be studied by both sides, but he himself has a distorted grasp of reality.
Well thats a spectacular misrepresentation of what nationalisation is . In fact it was used in the 20th century to redistribute income and to redistribute reward from profitable areas to non profitable areas. Harold Wilson operated a vicious campiagn whipping up clas envy in order to follow a socialist doctrinal agenda still very real at that time . Hutton is reading history backwards and frankly he is lying for his own leftish reasons . He canot be that ignorant surely ?
.The danger is that for whatever pragmatic intial reasons his power to use our money have been extended Brown will be tempted to use it
I like the way that socialist defences of anying and everything always inculude an example from the US as if there was no left and state controlling constituency . There is and the States are in may ways less committed to free trade than we are .
Hutton is a of course an old lefty happy to discuss the fates and actions of large companies which are always going to be close to the govenment and unhappy with the activities of small to medium companies where the real economy happens.
The way I see it is this . With a minimal state there would still companies . With minimal companies there would be nothing for the state to feed off. My own experiebnce is that the state does nothing but obstruct tax and create fake jobs many of which pay bere than the real jobs that finance them
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