James Kirkup James Kirkup

Clever Tories admit capitalism isn’t perfect

One of the many things that has been neglected in the Conservative Party because of all-consuming Brexit is a meaningful debate about markets and business.

Confronted with a Labour leader offering a clear critique of capitalism as a “rigged” system and outflanked by Nigel Farage telling a remarkably similar story about big money financing a self-regarding elite, the Tories have generally offered two responses. Both are flawed.

On one hand are those who think the answer to complaints about the economy is to yell about Margaret Thatcher, Milton Friedman and sometimes Singapore. Liz Truss has become the most prominent advocate of what Stian Westlake rather brilliantly calls “live-action role-playing Thatcherism”. But there are many Tories who appear to think that the vote to Leave – and the relative popularity of Jeremy Corbyn – are a demand from the electorate for lower taxes, deregulation and an unabashed celebration of big business.  

On the other end of this spectrum are the would-be populists willing to ape Corbyn-Farage with a stance on business and markets driven by Brexit. They form part of an emerging agenda that could yet make the Tories a National Party that abandons metropolitan voters and tries to build a majority with a protectionist agenda it hopes will appeal to Labour-leaning voters in Mansfield and Middlesborough. And if business doesn’t like it, so much the better. Boris Johnson’s “fuck business” was more than a gaffe, it was a statement of political strategy.

As a non-Tory who likes the market economy but worries about its failings, I find both of these arguments unconvincing and, worse, the level of Tory debate about markets pretty shallow.

I’m not alone in that. A City friend recently confided that though he voted Tory all his life, “John McDonnell has a better understanding of the problems in the UK economy today than most Tories, even if he’s wrong about how to solve them.”

In this context, I was very pleased today to host a Social Market Foundation speech by Nick Gibb, the schools minister, who set out a critique of capitalism that seeks to chart a sensible path between those two extremes.

You can watch the whole speech hereOr read Gibb’s sharp precis of his text here.

My own summary of his – very good – speech is that anyone who wants to defend the market economy from public anger needs to accept that system’s imperfections and fix them, sharpish.

That means accepting that executive pay is often too high, that some big companies don’t pay enough tax, that some companies don’t treat their customers or staff decently and that the state needs to do more to curb the power of companies to behave in such ways, since their conduct will ultimately undermine public consent for the market economy.

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