The inventor of Red Toryism — said to have the ear of David Cameron — is totally confused about the welfare state and the markets
Until recently, Phillip Blond was a lecturer in theology at the University of Cumbria. Now he is the big new thing in progressive politics, having been made a fellow of the National Endowment for Science, Technology and the Arts. He was also, until recently, running the “progressive conservatism” project at the left-wing think-tank Demos.
Having fallen out with Demos, he has started his own think-tank, Res Publica. He is said to have the ear of senior Tories, including David Cameron and George Osborne. Blond, 42, has been lifted to stardom by newspaper comment articles in which he explains his new political philosophy, Red Toryism. To understand Blond’s position, we should begin with his complaints about what he takes to have been the dominant political models since the Second World War — the welfare state and the “market state”.
According to Blond, “1979 brought the end of the welfare state”. This is false. The British government still guarantees us tax-funded healthcare, education, pensions, unemployment benefits and housing. Government spending was 43 per cent of GDP in 1979. Today it is 47 per cent.
Obvious falsity is only part of the problem with saying that the welfare state ended in 1979. For Blond also claims that the welfare state is having a malign effect on society by turning millions of citizens into state supplicants. Yet it is difficult to see how the welfare state can have any effects, malign or otherwise, if it does not exist. Perhaps there is something in his theology that explains such mysteries.
Having lamented the harm being done by the non-existent welfare state, Blond recommends extending it. He thinks that not only income should be redistributed from rich to poor, but capital too. His other policy suggestions also involve increasing the scope of government action so as to bring about what he calls “the good life”. (Blond is vague about the nature of this “good life”, but it’s like an English village, circa 1955.)
Since 1979, pace Blond, we have lived in a “market state”. He does not say what he means by a “market state” but the following quotation gives the gist of his position (and his style): “Prudent Chancellor’s (sic) promised no more boom and bust, the state sanctioned monopoly capitalism and sat happy on the tax receipts of unrestrained global gambling.” How the government can tax global gambling without restraining it is another mystery we will have to pass over.
To understand his dim view of the market, we have to understand what he means by “monopoly”. He does not mean that “an individual company has undue market influence” but that “a certain way of doing business constitutes a cartel. For example, the great housing crash is primarily the result of the absorption of all local, regional and national systems of credit into one form of global credit. The world’s financial system lacked the firewalls needed to separate local from national and international capital. Unduly reliant on one source of credit supply, the residential asset market collapsed when this supply was compromised.”
Blond is confused. Recent developments in banking have massively increased the available sources of credit. British borrowers can choose between dozens of mortgage suppliers and, by creating tradeable securities out of their mortgages, these suppliers can fund their lending from an almost unlimited number of sources.
The “one source of credit” to which Blond refers is the global credit market. But the market is not the supplier. It is simply the means of connecting suppliers with consumers. You might as well say that, since there is a global market for coffee beans, there is only one source of them and we thus suffer under a coffee monopoly.
Blond may not know what a monopoly is, but he knows that it is a bad thing. So, having confused monopolies with markets whose participants are geographically dispersed, he seeks to erect those missing “firewalls” — or trade barriers, as they are more commonly known.
He believes the state should protect local grocers from competition with non-local firms by denying Tesco and its ilk permission to trade. The same goes for capital, which will be have to be raised locally (after it has been redistributed, presumably). Consumers must be obliged to use their local supplier. To prevent monopoly, we must impose it.
This economic Balkanisation, not promoted by most protectionists at the national level, but between — let us say — Exeter and Bristol, is the central policy proposal of Red Toryism. It is the means by which Britain will supposedly be transformed from a “market state” to a “civic state”.
In fact, it is a means by which Britain would be transformed from a rich country to a poor one, as anyone who understands the connection between the scope of trade, the division of labour and wealth creation could tell Blond. Alas, it seems that Blond is doing all the talking and others, including senior Conservatives, are doing the listening. And that is a shame.