For most of my adult life, we have wrestled with a narrow interpretation of the free market which has come to dominate the globe.
That interpretation seems suddenly to have reached the logical limits. There are no investment banks left on Wall Street, many of the great American financial institutions – and some of the British ones – are on the equivalent of welfare hand-outs from the taxpayer (though their chiefs still seem to be drawing their vast salaries). It is time we wrested the idea of open markets and free trade from their clutches so that we don’t lose the baby with the bathwater.
Yet, in this country at least, where are the politicians? The Conservatives are still defending the hedge funds. Labour (as far as one can tell today) is struggling with plans to keep the excesses going. What are these proposed nurseries for two-year-olds but a hidden subsidy for ridiculously high house prices? It is up to the Clegg/Cable show to set out the way forward.
The truth is that this financial services roller coaster must end, and must end because it is corrosive of free markets – it obstructs small business, bypasses enterprise and innovation except of the narrowest kinds, and threatens to undermine a great deal more than ordinary people’s thrifty livelihoods.
This isn't just my peculiar take on it. The Ur-hedge funder George Soros said that he could believe the financial system would crash far easier than he could believe it would struggle on. The Ur-investor Warren Buffett talked years ago about derivatives as “financial weapons of mass destruction”.
No, it’s time for something else: a return to Liberal free trade based on enterprise and sustainable finance for innovation, not a handful of crumbs from a passing ubermensch.
But it takes a long time for politicians to realise the argument is shifting. It isn’t any more – hasn’t been for some years – about free trade versus state control. We all know pretty much where we stand on that, within some margins. It is big versus small. And when our financial system fraudulently assigns to itself the label of free trade – when it actually allows the big to corrode the small – then it needs good deal more changes than Brown and Cameron are planning.
Arkwright's Mill, Cromford, in 1947
16 hours ago