There is no third way

Conservatives must embrace true free market capitalism and reject the cronyism of the state

A Time to for choosing
Guy Bentley
On 10 August 2012 09:09

Just over a week ago the ‘progressive’ conservative group ‘Bright Blue’ held a conference on Tory modernization 2.0. Amongst the various speakers was the Universities Minister David Willetts - a man renowned for being one of the great intellects of his party.

His speech gives a fascinating insight into the worldview of the Tory modernizers. Whilst not being an all-out assault, it was certainly a shot at the libertarian wing of the conservative movement.

The minister attempted to define modern conservatism through a support for a dynamic market economy but combined with a state that actively supports institutions it deems as worthwhile.

Willetts made the argument that “institutions offer meaning to our lives that free markets cannot deliver”. Whilst free markets and Individualism are a young man’s game, when one grows older, there is a need to put down roots.

You don’t want to be subject to the rapid change and innovation of the market because of course learning how to change from VHS to DVD was quite a challenge without radical new medicines, energy, transport and the like.

Willetts fails to recognize that the free market itself is a creator of stable institutions. A free society is one in which rugged individualism and the stability of community institutions can exist in harmony. The institutions of marriage, Friendly societys' and churches were never stronger than when the state did less.

Willetts however, did not stop there, but actually advances the argument for an activist state which intervenes in the economy itself, not simply in the institutions that result.

He states that government has a positive role in enterprise and innovation strategy and goes on to make a Keynesian case worthy of, well… Keynes.

“We bring together publicly funded researchers and business leaders when they see that we are investing it encourages them to invest alongside”.

Ah yes if only the government could just revive our irrational animal spirits by spending our money and lessening the risk for businessman to succeed or fail off their own bat. Much better to have government hold their hand as they cross the road.

On the charge that the government is picking winners, this is a critique burnished by looking at the success of British Olympic sport and the role that government and universities played.

But quite how one can make the link between giving athletes some better sports equipment and resuming an active role through’ innovation strategies’ and the deeply worrying monetary activism is beyond me.

We have seen what this approach leads to in the United States. The federal government claims to invest in the technologies of the future by guaranteeing loans to companies and what do we see? The taxpayer loses half a billion dollars to useless solar energy companies like Solyndra.

“We are not going to get it right always, but we should not allow fear of mistakes to stop us trying”’.

Of course David Willetts doesn’t have to worry about getting it right. As much as It probably should, the state is not going to go bankrupt (yet). It can raise taxes, borrow vast amounts of money and inflate the currency. A particularly vicious and deceitful form of taxation.

Tim Montgomerie also embraced this rhetoric. Tim says that conservatives do not want “a big, unfocused state, but an enabling state.” I have to say I don’t think even our friends at the Guardian want an ‘unfocused’ state.

If this sounds sinisterly familiar it is because you have heard it all before. “We do not believe in a big state… the ideas of the enabling state whose job it is to empower the individual rather than the command and control manner of 1945 has profound implications”.

This was a speech given by the hero of the Tory modernizers, Tony Blair, in 2006. How did that enabling state work out?

The state is never just an enabler. Thomas Jefferson recognized this when he said that “The natural progress of things is for liberty to yield and government to gain ground”.

Montgomerie continues on an anti-libertarian bent, “Ideologues who want to leave people and their businesses on their own”.

This doesn’t sound too bad me. Individuals and businesses should be left on their own with minimal regulation and taxation of their corporate and private lives. Their success and failure should be their own. A very different kind idea than that recently advanced by President Obama’s now infamous “You didn’t build that” speech.

This kind of ‘third way conservatism’ on offer from the elite of the Tory party is likely to be unappealing in the long term - to most of the country and indeed much of the Conservative Party.

It is not individualism and free enterprise which have brought the calamitous situation which has befallen us over the past four years. But big government cronyism and corporatism characterized specially favored industries, subsidies, rocketing public spending, vast regulation and of course perhaps the guiltiest of them all - our system of central banks with an unaccountable monopoly over our system of money and credit. You know… the products of ‘government innovation strategy’.

A new generation on the right is not going to be inspired between a half-way house between freedom and collectivism. There is a craving for a consistent message supporting people’s personal liberties and their economic liberties. It is becoming ever more palpable.

This government should be making an unambiguous, full throated defense of a true capitalist economy. Instead they seem to be more afraid of the hisses of a Question Time audience than a triple dip recession.  

There is no middle ground. There is no third way. The Conservative Party either fights for these values and ideas or remains ideologically adrift, mesmerized by its past and uncertain of its future. 

Guy Bentley is the editorial assistant at the Commentator 

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