David Green: Adam Smith would stand by British Business Secretary
[David Green is the Director of Civitas, the Institute for the Study of Civil Society.]
Vince Cable criticised the behaviour of some businesses and banks and found himself under attack as a crypto-Marxist who was hostile to free enterprise itself. This morning he had to assure listeners on the Today programme that he is solidly in favour of a market economy.
And yet he could have been quoting the arch free-marketeer Milton Friedman, who famously once said: "With some notable exceptions, businessmen favour free enterprise in general but are opposed to it when it comes to themselves." There's a real distinction, Friedman wrote, "between being in favour of free markets and being in favour of whatever business does."
Another arch-defender of free enterprise, Friedrich Hayek, also pulled no punches in criticising the conduct of some firms. The tendency of business corporations, he once said, to "develop into self-willed and possibly irresponsible empires, aggregates of enormous and largely uncontrollable power, is not a fact which we must accept as inevitable."
When Vince Cable raised a similar issue he got into hot water. Why, he asked, "should good companies be destroyed by short-term investors looking for a speculative killing while their accomplices in the City make fat fees?" But to me his scepticism is evidence that he has been reading Adam Smith – not Karl Marx...
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Vince Cable criticised the behaviour of some businesses and banks and found himself under attack as a crypto-Marxist who was hostile to free enterprise itself. This morning he had to assure listeners on the Today programme that he is solidly in favour of a market economy.
And yet he could have been quoting the arch free-marketeer Milton Friedman, who famously once said: "With some notable exceptions, businessmen favour free enterprise in general but are opposed to it when it comes to themselves." There's a real distinction, Friedman wrote, "between being in favour of free markets and being in favour of whatever business does."
Another arch-defender of free enterprise, Friedrich Hayek, also pulled no punches in criticising the conduct of some firms. The tendency of business corporations, he once said, to "develop into self-willed and possibly irresponsible empires, aggregates of enormous and largely uncontrollable power, is not a fact which we must accept as inevitable."
When Vince Cable raised a similar issue he got into hot water. Why, he asked, "should good companies be destroyed by short-term investors looking for a speculative killing while their accomplices in the City make fat fees?" But to me his scepticism is evidence that he has been reading Adam Smith – not Karl Marx...