VINCE Cable, the business secretary, wrote to the Prime Minister last week, lamenting the lack of a clear economic “vision”. He thinks the government must decide “how we will earn our living in the future.”
By “we”, Cable was not referring to David Cameron and himself. How they will earn a living is clear, at least until the next election. He was referring to the rest of us. Cable thinks government ministers should decide how the entire population will earn a living.
Cable does not advocate a Bolshevik-style command economy; he will not force us, on threat of the Gulag, to invest our capital or labour in his vision. He prefers a caring kind of command economy, in which ministers get us to comply by way of subsidies and taxes (which you must pay on threat of imprisonment). For example, he wants RBS, a bank purchased by the government with taxpayers’ funds, to provide subsidised loans to the businesses he favours.
Though Cable may disagree with the Bolsheviks about how to coerce us, he agrees with them about the merits of economic coercion. He thinks we would be better off if the millions of little and, often, competing visions of individual Brits were replaced by a single, co-ordinated vision imposed by a business secretary or other governmental entity.
Why does Cable believe this? His letter to Cameron provides a clue. In it, he explained that his time working for Shell Oil taught him of the need for long-term planning.
Maybe long-term planning is a good idea for companies, maybe not. The uncertainty of the distant future makes it debatable. But why is this relevant to economic policy? Cable labours under a popular but peculiar conception of the national economy. He thinks of it as a single, very large company: “UK plc”.
Once you think of a nation as a big company, you naturally think that government ministers, like corporate managers, should decide how to allocate the nation’s resources. You see entrepreneurs, investors and other participants in the apparently private economy as mere employees of the great collective enterprise, to be bossed around or otherwise manipulated by the duly appointed managers.
Anyone who cares for his liberty should be appalled by this idea, as should those who care only for their prosperity. Cable’s faith in central planning requires an absurd admiration of politicians and bureaucrats.
Cable would have us believe that, sitting in their offices in Whitehall, politicians can make better investment decisions than industry insiders who are risking their own money. Then we are supposed to believe that, possessed of this miraculous knowledge, politicians will not use it to start profitable businesses of their own but will force the profits on people who are too dim to see the business opportunities for themselves. Praise them!
As if to confirm the folly of thus empowering politicians, Cable revealed his vision to Cameron. We should return to making objects rather than selling services. It is lucky Cable was not business secretary in 1929; he would have rejected all that new fangled manufacturing and recommended returning to an agrarian economy.
Jamie Whyte is a senior fellow of the Cobden Centre.