The West Is Turning Against Big Government - But What Comes Next?
THE DAILY TELEGRAPH: The struggle to curtail the social democratic state could have ugly consequences, says Janet Daley.

There seems to be only one political argument of interest left in the Western democracies: how “big” should the state be, and what are the proper limits of its responsibilities? Abstract as it may sound, this question has had a quite startling impact on the everyday experience – and voting habits – of people in the most advanced countries of the world.

In the United States, the electorate’s considered answer to it has humiliated a president and swept an extraordinary number of neophytes – whose primary attraction was their loathing of government power – into the most powerful legislature in history. In Britain, it has become the dominant theme (in fact, the raison d’être) of a coalition between a Left-of-centre party and a Right-of-centre one, which has managed to achieve a remarkable degree of agreement on the need to reduce – or, at least, to examine rigorously – the role of government intervention in all areas of social life.

The dominant economies of Europe, too, are going through quite momentous re-examinations of the post-war philosophy which accepted the state as an unquestionable source of benevolence and all-pervasive social justice. And this massive reassessment of the role of government has not come about simply because of the economic crisis, and the terrifying degree of sovereign debt which it produced. The governments of what were the richest countries in the world may be broke, but what is interesting is their response to this: the plan is not to make themselves rich enough once again to do all the things that they used to do, but to rethink the whole enterprise so that government never again finds itself so extravagantly overextended.

On this side of the Atlantic, there is now a broad understanding that the social democratic project itself is unsustainable: that it has grown wildly beyond the principles of its inception and that the consequences of this are not only unaffordable, but positively damaging to national life and character. The US, bizarrely, is running at least 10 years behind in this process, having elected a government which chose to embark on the social democratic experiment at precisely the moment when its Western European inventors were despairing of it, and desperately trying to find politically palatable ways of winding it down.

The American people – being made of rather different stuff and having historical roots which incline them to be distrustful of government in any form – immediately rejected the whole idea. But in Britain, too, among real people (as opposed to ideological androids) there is a general sense that governments – even when they are elected by a mass franchise – become out of touch and out of control, and that something essential to human dignity and potential is under threat from their overweening interference. Read on and comment >>> Janet Daley | Saturday, November 06, 2010

Financial Crisis: Capitalism Is Under Attack - and Cameron Is Steadfast in Defence
THE TELEGRAPH: The next election - both here and in the US - is shaping up to be a referendum on free market economics. All those old anti-capitalist diatribes are being resuscitated with triumphal delight by the side that definitively lost the great political argument of the last century. 



The Tories will not just be running against Labour and its current leadership. They will be running against a reinvigorated soft Marxist ideology which will infect the news coverage and analysis, against those who are saying: "You see, this is what comes from allowing the economic fate of the people to be determined by the market: ruin and instability followed by the inevitable need for government intervention. Greed and personal irresponsibility have been permitted to run rampant and the free market has now been utterly discredited."

And here, they chortle, is the ultimate irony: even the United States, the most militantly capitalist society in the world, is being forced to resort to massive state intervention - nationalising debt, of all things - to avoid a banking collapse. The game is up. Big government is vindicated. As Gordon Brown put it in his speech to the Labour conference, "Those who don't believe in the potential of government shouldn't be trusted to form one." Read that as, "Those of us who believe in the power of the centralised state don't have to apologise any more." 



It is going to take considerable strength of nerve and clarity of mind to reject the absurd premise on which this argument is based: to say that capitalism has been fatally compromised by the behaviour of a particular group of irresponsible individuals is like saying that democracy was irretrievably discredited by the fact that Adolph Hitler was once elected to office. I am hugely relieved to see that David Cameron is holding out against this tide. 



He is stating unequivocally that the idea that a state takeover of institutions is the only alternative to failures of judgment and incompetence in private finance is both wrong and dangerous.

Banks being run by reckless bankers put the country's private wealth - and its public wealth, since the latter is derived from the former - at stake. But politicians and their appointees are no more infallible than civilian individuals in the soundness of their decisions, and when they screw up they take the wealth of the entire tax-paying nation down with them in one step. Quite apart from the fact that it was the policies of politicians on easy money that permitted the bankers to run amok.

So, all things considered, Mr Cameron must be on the right track with his plan to allow the independent Bank of England to take responsibility for restructuring failing banks as an alternative to nationalisation which would put them under the direct control of government. Financial Crisis: Capitalism Is Under Attack - and Cameron Is Steadfast in Defence >>> By Janet Daley | September 29, 2008

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