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I found myself lurching to the left on my second moral maze last night. The discussion was on the morality of capitalism. It wasn’t a terribly balanced panel as Will Self and Claire Fox are both left leaning and Melanie Philips, while socially conservative, is a vocal critique of the excesses of consumerist individualism. Indeed, as an advocate of the social market economy, I might have been the most pro-capitalist of us all.

The problem was that the more I quizzed our two witnesses defending the free market the more frustrated I became. Neither Richard North from the Institute of Economic Affairs, nor Eamon Butler from the Adam Smith Institute, seemed willing to admit there are inherent problems of modern financial and consumer capitalism that have been exposed by the current crisis. For Richard North the problem wasn’t that capitalism had failed but that the people running it had been unwise and unprofessional. For Eamon Butler the problem wasn’t capitalism but bad regulation by the state. While both had to recognise  that things have gone seriously wrong now, they both gave the clear impression that when the worst of the storm has passed they will again be standard bearers for free markets, minimal regulation and a residual state.

This prompted me to think back to a fantastic event we held last week marking the publication of the second volume of Bernard Donoghue’s diaries, covering the last years of the 1974-79 Labour administration. Listening to Bernard and also to former Labour MPs Shirley Williams and David Marquand it was obvious that the events of the time had left deep scars. The winter of discontent exposed profound failings in both the Labour Movement (particularly the inability of trade union leaders to control their shop stewards) and the corporatist model of decision making. As Labour confronted those failings it lurched first to the left and then eventually to a new centre.

My worry now about the champions of free markets is that they don’t seem ready to engage in this kind of soul searching. Instead the search is on for an easy scapegoat so that when the good economic times come back they too can return to the old slogans and certainties. Markets are a brilliant mechanism for processing information and matching demand and supply. The desire to succeed at business has driven innovation, raised productivity and made us all materially better off.  But if the friends of capitalism aren’t willing to ask hard questions and come up with brave and cogent answers they will leave this territory to those who think the problem is the market itself.

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