Conservatives would ‘control house price rises’
Government by bankers.
Perhaps nothing new in that.
But under a Cameron premiership, it appears that the Conservative Party would return to the sort of Conservatism last practised in by Edward Heath in 1972 when he introduced his Industry Act which afforded considerable potential for intervention in industry, and the government found itself managing prices and incomes. This is antithetical to the monetarist liberal economic thinking of Margaret Thatcher and Keith Joseph. Perhaps someone ought to inform George Osborne that it did not work in 1972, and it will not work now. And if this is part of David Cameron’s ‘Moral Capitalism’ – which is, in any case, a tautology – or ‘Capitalism with a conscience’ (which, again, is intrinsic), it is really nothing but the pursuit of a Blairite ‘Third Way’.
David Cameron wishes to divest himself of the ‘old free market orthodoxy’ – that constructed on the Protestant ethic which gave us the open markets and free enterprise which yielded health, wealth and happiness – and pursue an ecumenical Capitalism – otherwise known as Catholic corporatism - which has mired so much of Europe in regulatory red tape, high unemployment and chronically low economic growth. It would be a strange kind of ‘Eurosceptic’ Conservative who opted to burden the United Kingdom with the very Catholic Social Doctrine with which the Europhiles are so enamoured, considering it somehow more ‘moral’, when it has so manifestly failed the poorest since its inception.
Mr Osbourne believes it to be more moral to give the Bank of England the power ‘to deflate "bubbles" in the housing market’. This, he believes, would abolish the ‘boom and bust’ which Gordon Brown tried so desperately to abolish.
Perhaps Mr Osborne never blew bubbles as a little boy, but Cranmer learnt very early on that one cannot deflate bubbles without bursting them.
It is also a bit rich to accuse Gordon Brown of ‘fuelling an unsustainable growth in house prices by overseeing lax credit rules’ when it was a Conservative administration which liberated lending and positively encouraged the very home ownership which has contributed to spiraling prices. The Shadow Chancellor wishes to see ‘more restrained lending', such that when the Bank of England judges that house prices are rising too quickly, they would have the power order commercial banks to restrict their lending to individuals and companies, thus slowing down the housing market.
He ought to heed the lesson of Margaret Thatcher, who was famously of the opinion that ‘you can’t buck the market’. You can only control house prices if you intervene before breakfast, before lunch and before dinner.
Mr Osborne has not specified what ‘rising too quickly’ may mean. And neither has he specified the extent of his ‘restriction’. He has not said by what means he would discern which companies would receive the credit they need to survive and which companies would be abandoned by the State because they are somehow socially undesirable. The imposition of a ‘moral framework’ for Capitalism is the very opposite of the Protestant notion of liberty – which is itself moral - under which it has been developed throughout the Anglo-Saxon economies of the world. On much of the Continent, that framework is Catholic; in parts of the Middle East, the framework is Shari’a. They may ‘work’, but they do so only to the extent to which the peoples are content to be denied their liberties and are content for the State to direct their affairs.
The Protestant framework has succeeded precisely because it has liberated individuals to pursue their objectives irrespective of religion or morality. This does not render it immoral, and neither is it amoral, adhering, as it does, to some of the core Conservative principles such as the rule of law and the right to private property. But Mr Cameron is persuaded that when people look at this brand of Capitalism, they perceive ‘Markets without morality. Globalisation without competition. And wealth without fairness’. “It all adds up,” he says, “to Capitalism without a conscience and we’ve got to put it right.”
And to put it right, he advocates moving into the realm of the dirigiste, pro-EU, anti-State, anti-individualist, ‘Third Way’ federalist Catholic ecumenical Socialism.
It is a strange Conservatism which lets in Socialism through the back door.
The Protestant ethic in the spirit of Capitalism accords with every principle of natural law, but it may be corrupted by the human heart, which is egocentric, selfish and greedy. State Capitalism will not eradicate that, for it is the human condition, and one cannot change hearts through the imposition of legislation. The Protestant ethic which has dominated the world’s economic order for three centuries has encouraged individual philanthropy and an altruistic pursuit of the common good. David Cameron appears to be persuaded that it is the State which knows best how the fruits of our labours ought to be spent, and it is the State which ought to determine the social order and decide who loses and who wins, who’s in and who’s out. And it is the State which will determine the new 'moral framwork' under which the economy will operate.
It appears that the Leader of the Conservative Party is not such a Whig after all. One ought to pray that the ‘Moral Capitalism’ we end up with under a Cameron-led government is neither Catholic nor Shari’a. And not even a Via Media.
Except, of course, for the Anglican variety.