Capitalism Needs A Champion

Lord Maurice Saatchi on BBC Newsnight on Monday 21 October. Picture courtesy BBC Newsnight.

Lord Maurice Saatchi on BBC Newsnight on Monday 21 October. Picture courtesy BBC Newsnight.

Lord Maurice Saatchi made a long over-due call, on BBC Newsnight yesterday (Monday 21 October), for capitalism to be put to work in support of freedom.

The former Conservative Party chairman whose advertising firm created the election winning “Labour Isn’t Working” campaign for the Tories in 1979 is seeking a new political formula for today – and he may be on to something.  Saatchi, who is chairman of the right-wing Centre for Policy Studies, was tackling head-on the idea that, now, it is capitalism that isn’t working. There is a moral purpose to capitalism, he argued. It is about spreading wealth so that everyone feels richer and is freer.

Freedom

This is reminiscent of the 1980s when Margaret Thatcher came to power with policies that were anchored to a profound belief in the liberating power of capitalism.  At the same time, Ronald Reagan was inspiring an America that had been defeated in Vietnam, shamed by Watergate and humiliated by Tehran with his brand of deeply moral Californian optimism. And then, when the Free World won the war of ideas, defeated Soviet Communism, and liberated the countries of eastern Europe, it seemed as though the moral potential of capitalism had at last become manifest…

In Britain, America and the newly freed states of Europe, the narrative was the same: roll back the state, embrace capitalism and you will prosper in a free society. And for a while it worked.

But where are we now? Capitalism is in the dock and freedom is under attack. The banks and the utility companies are, rightly, castigated for their behaviour and we are being told that capitalism is at fault. Meanwhile our civil liberties are slowly being stripped from us in the name of national security; our personal freedom to do what we want is increasingly eroded by soaring bills and rising taxes; and Britain is losing its independence to Brussels, foreign state-owned utility firms and overseas sovereign wealth funds. We may have won the Cold War, but we are now in danger of losing the very freedoms that we sought to defend. And we are doing it to ourselves.

Growth of the state

In the decades since the fall of the Berlin Wall, without the fearful examples of Soviet Russia and the former East Germany to keep us vigilant, we have built a society where our activities are captured on CCTV,  our movements are recorded by mobile phone and our private communications are read by the electronic sackful. Our civil liberties are being remorselessly stripped by a combination of technology and law; and each new extension of state power is justified, and accepted, as reasonable, proportionate and necessary. How East Germany’s Stasi secret police must have dreamed of such a world…

When a handful of big utility firms jack up their prices in unison after the banks have nearly tipped the world into economic disaster, we are told, plausibly, that it is capitalism that is at fault. And this simple explanation that capitalism isn’t working has found resonance with voters. Yet we live in a country where the state watches over our lives, controls around a half the economy and regulates most of the rest. What role has the state played in the failures of two of the most regulated sectors?

There is a depressing logic to regulated markets: a few big companies are easier to monitor and control than lots of small ones. We have allowed too much influence to be concentrated in too few hands in the banks and in the utilities and elsewhere in the economy. And it is the regulator-state that inadvertently helped to breed such a small club of big utilities and the banks that were too big to fail.

Worse, while personal borrowing is kept on a leash, excluding many from buying their own homes, we are allowing Britain’s mounting national debt to become the ultimate threat to all our freedoms. Already we have ceded control of vital national infrastructure to foreign powers because we can no longer afford to make the investments ourselves. And that is before we even consider the powers given up to Europe.

Champion

People with no money can never be free. Countries with huge debts can never be free. If we are not careful, national debt will morph into national slavery as taxes edge ever upwards and interest rates inevitably follow while sovereign obligations accumulate.

Maurice Saatchi did not phrase his argument last night in terms of the size of the state or the national debt or regulation – but that is the inescapable corollary of his message. Money is freedom and capitalism should be seen as a liberating force, Saatchi seemed to be saying. And he is right.

Capitalism is the only weapon that can be used build prosperity and expand freedom. Britain needs a champion who is prepared to wield this weapon in the name of liberty. Someone who is willing to use capitalism to reduce the size of the state, liberate us from the regulators of Whitehall and Brussels, pay down the national debt and fight for all our freedom. Who will step forward?

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