For a contemporary and historical account of the scale of the state and its relations with nominally private business, I recommend David B. Smith’s excellent Living with Leviathan: Public Spending, Taxes and Economic Performance:

In the last 90 years the proportion of national income spent by the UK government has increased from around 10 per cent to nearly 50 per cent. This general trend has been followed in most other developed countries, although levels of government spending are much higher in the European Union than in the USA, Australia, Japan and Switzerland.

The book includes a particularly controversial commentary on New Labour:

New Labour’s so-called ‘third way’, and the prevalent economic paradigm in much of ‘Old Europe’, appears to correspond to none of these categories [free market, socialist and ‘Butskellite’ mixed]. Instead, it appears to be a system under which the private sector maintains a nominal legal control over its capital and labour, but the returns on these factors of production are so heavily influenced by tax and regulation that the public sector ends up effectively controlling such returns. This sham form of mixed economy, which needs to be distinguished from the British mixed economy of the 1950s, has traditionally been associated with fascist regimes – for example, the gelenkte Wirtschaft (supple or ‘joined-up’ economy) that Goering implemented in Nazi Germany in 1936. […] It is certainly not being suggested that New Labour economic policy is consciously modelled on pre-war fascist precedents but rather that a combination of the Marxist-inspired New Left ideas of the former student radicals of the 1960s and 1970s, who now compose so much of the Labour Party establishment, when combined with an intense nanny-style authoritarianism, and the practical need to get elected, produced a synthesis that ended up with an economic approach that was functionally hard to distinguish from that of fascism.

I have discovered that, in some sectors dominated by the state, controlling private companies’ return is an explicit objective of policy. That this is accepted as normal, even desirable, by so many people, even Conservative politicians, shows just how far we have come from a free society.



  1. Labour may have got rid of Clause 4, but they still did a lot to “regulate the means of production, distribution and exchange”.

  2. Matthew Newton

    I think there’s a lot of agreement among people of various political perspectives about the problems of cronyism, e.g in railways. Where there is disagreement, however, is over the solutions. See for example here:
    According to this article, “Rail renationalisation has long commanded large majorities in opinion polls”. I imagine you don’t share that enthusiasm though. Some (like me) may be open to solutions other than renationalisation but I think they need to be presented more clearly so that the pros and cons can be seen in more detail.