Global decoupling is an opportunity to rethink who national economies should serve

For UnHerd, Aris Roussinos argues that British post-liberalism is years behind its equivalent American movement, lacking the intellectual firepower and hinterland that exists in the US.

Yet for British post-liberals — whose politics is ultimately a conservatism of the Left, and who remain keener than their American counterparts to maintain the firewall against genuine illiberalism — Vance’s ascension is a bittersweet moment. His nomination is, objectively, the most significant political victory yet for the post-liberal intellectual milieu, and a vindication of Adrian Vermeule’s strategy of seizing control of the American state apparatus from within, and turning its force and power towards the common good.

Vance’s success, however, also highlights the failure of British post-liberalism. Just four years — and three prime ministers — ago, it was perfectly reasonable to imagine that Johnson’s crushing electoral victory on a platform of reshoring domestic industry and using state power to advance the prosperity of Britain’s forgotten working and lower-middle classes heralded the victory of British post-liberalism. Yet events, and the Conservative Party’s unique mix of political incompetence and ideological inertia, proved otherwise. Having rewarded them with a landslide for their rhetorical tilt towards post-liberalism, the British electorate has duly punished the Tories for their reversion to their intellectual comfort zone. As the academic David Jeffery has observed, 2019 was “a false dawn for post-liberal thought, and by the 2022 leadership contests the post-liberal ship had sailed”, with British Conservatives proving themselves “completely unable to think beyond the liberal-individualist status quo”.

Yet British post-liberalism’s failure is perhaps institutional rather than ideological. There is no equivalent here to the matrix of think tanks and sinecures that nurture conservative talent in the US: if he were British, Vance would be competing for a slot on GB News. British post-liberals may have interesting things to say about the failures of our current political dispensation, but few places to say them. Instead, like itinerant alchemists at Renaissance courts, they seek patronage in Budapest, and perhaps soon in Washington. There is certainly no place for them in the Conservative Party, still held ideologically captive by an economic liberalism that has fallen out of favour everywhere else in the world: even Reform are ultimately boomer liberals.

In the Wall Street Journal, Glenn Hubbard argues that America’s economic populists may have a point, charting a middle way between heavy interventionism and pure laissez-faire.

The first element [of a conservative economic programme] is agreeing with populist conservatives that markets don’t always work perfectly and that a hands-off approach isn’t always the solution. The state can play a useful role in the market economy. Supply-chain restrictions and export controls can be tools to deny national-security-sensitive technologies to adversaries such as China. But an economic agenda requires more than a sound bite to avoid overreach—such as using “national security” as a pretext for slapping steel tariffs on Canada.

The second essential is competition—the linchpin of economic possibilities for classical economic thinkers from Adam Smith onward. While competition at home and abroad expands the economic pie, it says little about the relative sizes of the slices, a point noted by populist conservatives. A modern conservative economic approach would not only promote competition but also prepare more individuals to compete in a changing economy. One avenue could be supporting community colleges that understand local job needs rather than establishing more government training programs.

Third and most important, a conservative economic platform should recall why conservatives have stressed the benefits of markets. The goal, as my Columbia colleague and Nobel laureate Edmund Phelps puts it, is “mass flourishing.” That is why we want markets to work—to advance innovation and productivity and allow communities to make that flourishing possible.

As far as government’s role, a contemporary economic agenda should recognize a limited measure of successful industrial policy. Two roads should be on offer. The first is to provide more general support for basic and applied research, while letting market forces determine winners and losers. The second is to assign specific goals to particular interventions. The Apollo program’s goal was to put a man on the moon in a decade. The Trump administration’s Operation Warp Speed sought vaccines against Covid. Populist conservatives are right that there is a role in a conservative economic agenda for helping areas hard hit by disruption. But that role isn’t a mercantilist blunderbuss of protectionism and industrial policy to turn back the economic clock. Rather, place-based aid could support business services for firms trying to create local jobs.

On his Substack, Noah Smith says there is a case to be made that industrial subsidies may raise national productivity.

So while some of [the pseudonymous Asia Times writer] Han Feizi’s core arguments are interesting, they have severe limitations and qualifications. But the author does hint at a more interesting and potentially revolutionary justification for China-style industrial subsidies — they might accelerate innovation.

In How Asia Works, Joe Studwell argues that developing countries can raise their productivity levels through something called “export discipline”. Basically, export discipline is two things:

1. Subsidizing companies that export their products


2. Withdrawing subsidies and culling unsuccessful companies after an initial period

Step 1 is supposed to push companies to compete in more challenging overseas markets, absorb foreign technology, and develop new products more suited to global tastes. Step 2 is supposed to minimize the costs of the policy and reallocate resources from unproductive companies to productive ones. Together, these steps are supposed to function as a sort of research project — a country discovering what kinds of goods it can successfully specialize in, how to sell them, and which of its people are best suited to selling them.

But this raises the question: What if you used this approach to subsidize production in general, instead of just exports? Suppose your country doesn’t yet have a great car industry. So you pay a bunch of companies to try their hand at making cars. Some succeed, some fail. You withdraw the subsidies and make sure that the failed carmakers fail. At the end of this process, you might have some successful carmakers where you didn’t have any before! And those carmakers, almost by definition, will have technologies that your country never had before.

Although Han Feizi only alludes to this idea, others have endorsed it explicitly and used it to argue that China’s economic model is superior…

…In fact, it’s possible to write down an economic model where this procedure is highly effective for increasing a country’s productivity levels. I guess that doesn’t say much, since it’s possible for a skilled theorist to model practically any economic result they want. Obviously, this sort of approach to raising national productivity levels needs to be tested empirically and not just theorized about. And the only real way to test a policy is to try it and see what happens.

China has had a big problem with slowing productivity in recent years…[g]iven this situation, it makes sense for China to try some out-of-the-box thinking. Industrial subsidies aren’t an orthodox way of raising national productivity, but they might work. If we don’t try out new economic models, we’ll never find anything better than what we have today.

In the Telegraph, Ambrose Evans-Pritchard says the UK economy is in good health compared to the Eurozone, which is experiencing stagflation.

The UK’s headline inflation is steady at 2pc and has (for now) undercut a sticky 2.5pc in the eurozone, a level that leaves the European Central Bank in a bind. “We have had Brexit, Covid, and interest rates back to over 5pc, and yet we still haven’t seen the UK economy crack. We’ve basically adjusted to the new trade arrangements,” said David Owen from Saltmarsh Economics. “Services are doing really well, and that is a big surprise.” The UK’s trade deficit in goods and services narrowed to 0.5pc of GDP in the first quarter. It is today closer to structural balance than it was during the later years of EU membership. This suggests to me that the post-Brexit reshuffle in supply chains has led to more import substitution than meets the eye, lifting output as companies reshore to subcontractors in the UK. The OECD has forecast dismal figures for the UK as usual, pencilling in growth of 0.4pc for this year, below Japan, Italy, France, Canada, and America. This looks increasingly unhinged. Right now the UK is probably growing faster than every one of them.

The rating agencies have been upgrading Britain quietly for some time. I suspect that we are at a turning point where broader economic opinion across the world drops the “basket-case” narrative on Britain and starts to think of it as a normal country, and something of a safe-haven. Rishi Sunak began to restore political stability eighteen months ago. The rehabilitation is now complete under Sir Keir Starmer. 

It is Europe that is becoming progressively less governable, splintering to Left and Right in a ferment of revolt against the status quo, but without the status quo actually changing in any respect. The pressure cooker can never entirely let off steam because it is nigh on impossible to sack the EU’s executive government, even when it persists in error. The Commission sits on top of everything as a permanent secular papacy. France is stuck in a constitutional crisis, with no obvious way of creating a viable government. This is the result of a gerrymandered electoral outcome that perpetuates a discredited Enarque regime and arbitrarily disenfranchises 11m people who voted for the “wrong” party. This is storing up an even greater crisis for next year. 

The eurozone may spring back to life over coming months as energy costs fall and real incomes recover, but that is far from certain. The EU’s Stability Pact is biting again and fiscal tightening is on the way. The lagged effects of past rate rises by the ECB are still feeding through. Loan demand is dead, the M1 money supply is still contracting. Nor is the world reassuring. The flood of Chinese exports escaping depression at home is still gathering force. The US housing market has buckled, and rising US unemployment is close to triggering the recessionary Sahm Rule. The UK is largely defenceless against all of these global forces. But for now, at least, we seem to be in rude good health. Mirabile Dictu.

In the New Statesman, Sohrab Ahmari says the architects of Bidenomics never saw the same pitfalls in free movement of labour the same way they saw the downsides of free movement of goods.

Biden-style post-neoliberalism took shape in the form of: massive regional investment programmes bundled under the (tragically mis-titled) Inflation Reduction Act; a monumental effort to shift semiconductor production back to the homeland via the CHIPS Act (the arch-neoliberal Wall Street Journal, where I once worked, conceded its significant impact); a Federal Trade Commission reversing decades of neglect by pursuing aggressive antitrust under Chairwoman Lina Khan (even J.D. Vance described her as “one of the few people in the Biden administration that I think is doing a pretty good job”); the most pro-union National Labor Relations Board in decades; and a renewed emphasis on consumer protection, particularly in downscale financial markets at the Consumer Financial Protection Bureau. These were major achievements for which Team Biden has received too little credit. Bidenism was faltering well before his disastrous debate against Donald Trump in June. Why? The short answer is: immigration and inflation. The first one was a largely self-inflicted wound, while the other is the result of structural forces that will haunt Biden’s successor, whether that’s Trump, Harris, or some other figure.

On immigration, the Bidenites simply couldn’t see the free movement of labour the same way they viewed the free movement of goods that they sought to bring under political control. The crisis on the US’s southern border was acute as millions of newcomers were waved into the homeland as “refugees” — the overwhelming majority are economic migrants — putting pressure on the social services of the native underclass, creating a shadow reserve army of labour for the DoorDash economy, and stoking urban incohesion that drove even blue-city mayors crazy. Immigration surged to the top concern among voters in February, according to Pew polling.

The inflation issue is more complicated. As the left political economist Justin Vassallo has persuasively demonstrated, the Bidenites, like most everyone else, have been too quick to accept Federal Reserve hawks’ account of the problem — an overheating economy, too much money supply chasing too few goods — rather than looking at the structural crises of the American economy, particularly the inefficiencies created by trying to do the same things with cheaper and cheaper labour. Compounding these two issues was the Bidenites’ own failure to properly sell Bidenism as an answer to working- and lower-middle-class misery. To have done so would have offended the liberal NGO industrial-complex that forms what authors John Judis and Ruy Teixeira call the Democrats’ “shadow party”: people for whom there is nothing redeemable about the other half of the country, and who eagerly gobble up books like White Rural Rage: The Threat to American Democracy.

At ConservativeHome, James Somerville-Meikle calls for conservatives to be tough on both high immigration and its causes – corporate lobbying, labour shortages and a falling birth rate.

A large factor in driving up migration has been the appeal of workers from abroad, sometimes to fill the skills shortage and sometimes because it was cheaper and easier. As Conservatives, we believe in free markets and enterprise, but this needs to be fair and done in a way that will not undermine our domestic workforce. Too often in Government, we rolled over when businesses and public services said they needed workers from abroad to survive. Some sectors such as agriculture and higher education will rely on seasonal/temporary migrants, but we need to be much firmer with other sectors. In some areas, such as social care, this may well require wages to rise to attract more people.

Expanding the use of visa levies, introducing a taper system on visa numbers in some sectors, and tighter rules on dependants could form all part of the solution. We also need to look at the skills and training being provided in our schools, colleges, and universities, and whether these match the needs of our economy.

We cannot have a conversation about migration, without looking at current population trends in our country. It is perhaps no coincidence that last year’s high net migration figures also coincided with a twenty-year low in the number of babies born in England and Wales. Successive governments have failed to support family life and the amazing work of parents and unpaid carers. In Jeremy Hunt’s Budget last year, his announcement on extra childcare funding was made in a part of his speech entitled “Barriers to work”. Our children and young people are surely our greatest asset, but sometimes we have treated them more as a burden that needs to be lifted. We should use our time in opposition to consider how we can implement a tax and benefit system that properly supports children and family life. This should include backing fully transferable tax allowances and finally lifting the two-child cap on Universal Credit and Working Tax Credits – a policy that even Nigel Farage thinks should be scrapped.

For American Compass, Michael Lind argues that the return of tariffs to US trade policy represents a welcome reversion to market realism over market utopianism.

In reality, the global trade system has already disintegrated, thanks precisely to the policy of appeasing Chinese mercantilism that The Economist advocates. Electric vehicles (EVs) are the perfect example. Using tariffs, subsidies, and other tools of industrial policy, state-supported Chinese firms have exploited access to American innovations and now seek to flood the American market with underpriced exports. Other than the obnoxiously anonymous lead writers at The Economist and a few libertarian dead-enders, who really believes that China’s crushing of the American EV industry would be a “free market” outcome that enhances American prosperity?

The market utopianism that The Economist shares with—and helped teach to—the neoliberal establishment has collided headlong with the market realism that long governed the international economy and American trade policy, and is now returning to its rightful place. Realizing this, savvier defenders of neoliberal globalism are changing the subject from the alleged benefits of cheap imports to the argument that tariffs are “taxes on consumers” and “regressive” ones at that.

The attack on tariffs as regressive taxes unites two of the themes of early twenty-first-century neoliberalism. One is the left-neoliberal dogma that each individual tax—not government policy or the economy as a whole—must be progressive in its effects. The other is the right-neoliberal dogma that deregulating trade and immigration to reduce wages for workers and thus reduce prices for consumers is the “efficient” and thus best policy, as long as the “winners” compensate the “losers”—preferably in the form of redistribution through the tax code.

Both these dogmas should be rejected. The regressivity of this or that specific tax—or even of the tax system as a whole—is irrelevant as long as workers share equitably in the gains from a growing economy and as long as the necessary functions of government are adequately funded. Moreover, while creating “losers” by deregulating product and labor markets is easy, raising taxes on the “winners” to fund higher government spending on the “losers” is politically perilous. And even when it succeeds, such transfer payments prove to be poor substitutes for family-supporting paychecks. If reducing inequality is the objective, the priority should be raising pre-tax wages, not after-tax subsidies. And the best way to raise wages is to boost the power of workers to bargain with employers, individually or collectively, so they can share more of the profits of firms with managers and shareholders in an economy that is growing, in part thanks to the industrial policy that well-designed tariffs can support. Whether the tax code that best achieves that result is a “progressive” one is rather beside the point.

Market utopianism, in both its radical libertarian and moderate neoliberal forms, recognizes only the legitimacy of voluntary transactions among individuals and firms. Nation-states and blocs have no standing. Any actions by states to favor their own producers over foreign ones is not only inefficient, but also immoral and likely to lead to war. The vision is as appealing as John Lennon’s anthem “Imagine”—and as out of touch with reality. 

Market realism is an element of geopolitical realism, which views the division of humanity among competitive states as permanent and necessary in the absence of a world government. Even without specific sources of conflict, military insecurity drives great powers to seek the maximization of not only their relative military strength, but also their industrial base, on which military power depends, while minimizing their dependency on other hostile or potentially hostile rivals. From a market realist perspective, increasing protectionism in the U.S. and EU is inevitable and justified, as a belated response to the domination of critical industries by authoritarian, mercantilist China. 

Market realism explains the changes that have taken place in American trade and industrial strategy over time. In the nineteenth century, the U.S. pursued a successful import substitution strategy that transformed it from an agrarian to an industrial economy with the help of tariffs that kept out manufactured goods from Britain and other more advanced economies, reserving America’s growing home market for American-made goods. By the early twentieth century, protectionism had allowed the U.S. to catch and surpass Britain as the leading industrial nation. Emphasis shifted from protecting infant industries to opening foreign markets to exports from America’s now-mature industries. Tariffs became bargaining chips in reciprocal trade negotiations…

…If World War II had not occurred, the global economy probably would have remained divided among protectionist empires and nations. The U.S. would have retained tariffs as a bargaining chip in negotiations with specific trading partners. But after 1945, the devastation of the other major industrial nations resulted in unrivaled American productive capacity. Fearing no industrial competitors in the near future, the formerly protectionist U.S. became an evangelist for free trade, as Britain had been a century before when the temporary supremacy of the U.K. as the first industrial superpower had seemed unassailable. With the zeal of a convert, Washington pressured other countries to lower tariffs under the auspices of the General Agreement on Trade and Tariffs (GATT), and frowned on the use by independent Latin American countries of the import substitution strategy that the U.S. itself had used only a short time before. 

The American era of global industrial hegemony lasted only a generation. By the 1970s, West Germany, Japan and the “Little Tigers” of East Asia—South Korea, Taiwan, and Singapore—were providing significant competition to U.S. manufacturing. America’s East Asian trading partners unfairly exploited unilateral access to the now-open American consumer market, the largest in the world, while protecting their own domestic markets and fostering their own national champion firms through industrial policy: regulations, targeted credit, and other non-tariff barriers. 

According to the strategic logic of market realism, the U.S. should have abandoned free trade in the 1970s and 1980s and returned, not to infant industry protectionism, but to country-by-country reciprocal trade diplomacy, to prevent the kind of parasitic, free-riding mercantilism practiced by Japan, South Korea, and Taiwan. This was the argument made by proponents of strategic trade and industrial policy in the Carter, Reagan, and Clinton years.

But during the Cold War the logic of American military Realpolitik overrode the logic of American industrial Realpolitik. From the 1950s until the fall of the Berlin Wall, officials of the Pentagon, the State Department, and the National Security Council argued that the sacrifice of some American industries to unfair competition was a price worth paying to keep America’s East Asian protectorates in its Cold War alliance system. When the Cold War ended, giddy triumphalism led American policymakers of both parties to dream of expanding America’s Cold War alliance system to include the entire world. 

The complacent belief in Washington that the “unipolar moment” was in fact a “unipolar epoch” gave permission to American corporations and investors to engage in massive offshoring of industry in a quest for more easily exploitable and thus lower-cost labor, foreign subsidies, and favorable regulations. The result was something unprecedented in history: A great power, the United States, simultaneously deindustrialized itself while allowing and sometimes encouraging its capitalists and corporations to build up the military-industrial power of its most likely geopolitical rival, China.

In the mythology of neoliberal globalism, America’s supposed lack of “comparative advantage” in manufacturing justified and explained its accelerating deindustrialization. In reality, post-Cold War offshoring was driven by corporate labor arbitrage, enabled by the pools of exploitable low-wage labor that China and other countries like Vietnam and Mexico offered to unpatriotic American corporations seeking to evade unions and minimize labor costs. In addition to cheap, unfree labor, China offered Western companies subsidies and also made their relocation to China a condition of access to China’s rapidly growing market. Its integrated strategy lured foreign investment, forced the transfer of innovative technology, and fostered its own national champions.

Americans were shocked to discover their dependence on Chinese-made medical products and drugs during the COVID-19 pandemic. Even more dangerous is the dependence of the U.S. military on Chinese supply chains, now that the cold peace between the U.S. and China has frozen into cold war. “China is now the world’s sole manufacturing superpower,” Richard Baldwin recently observed in VoxEU.  “Its production exceeds that of the nine next largest manufacturers combined. … When it comes to gross production, China’s share is three times the U.S.’s share, six times Japan’s, and nine times Germany’s.” 

Having been indifferent for a generation to the damage done to American manufacturing and American workers by trade-induced deindustrialization, alarm at the prospect of China converting its industrial supremacy into military power and diplomatic influence has finally shocked the bipartisan American establishment into repudiating market utopianism for pragmatic, time-tested market realism…

The Centre for Strategic and International Studies published Red Ink: Estimating Chinese Industrial Policy Spending in Comparative Perspective. The authors conclude that the scale of Chinese industrial policy intervention is “enormous”.

The data collected for this report yield three core findings:

▪ Even using a conservative methodology, China’s industrial policy spending is enormous, totalling at least 1.73 percent of GDP in 2019. This is equivalent to more than $248 billion at nominal exchange rates and $407 billion at purchasing power parity exchange rates. This is higher than China’s defense spending for 2019, which the Stockholm International Peace Research Institute (SIPRI) estimated at $240 billion at nominal exchange rates. Alternative data and assumptions, including for China’s below-market credit, subsidies to non-listed private firms, government guidance funds, and state-owned enterprise net payables, would result in larger aggregate estimates.

▪ Even with such a low-end estimate, China is an outlier; it spends far more on supporting its industries than any other economy in this study. As a share of GDP, China spends over twice as much as South Korea, which is the second-largest relative spender in the sample. In dollar terms, China spends more than twice as much as the United States.

▪ From a historical perspective, China’s approach to industrial policy is exceptional, as Beijing is sustaining or increasing vertical industrial policy at a level of development when other economies have dialled back. Three industry case studies—aluminum, semiconductors, and electric vehicles— show how China stands out in terms of both quantifiable spending as well as non-quantifiable policy tools.

This exercise yields several important policy implications. Greater transparency and more harmonized reporting about industrial policy spending is vital. Governments and international institutions that govern economic activity need to broaden the scope of tools they use to calculate the total value of industrial policy. It is also important to require governments to consistently provide more comprehensive and detailed data about the ways in which they support their companies and industries.

This week we recommend Saving Capitalism: The Reconstruction Finance Corporation and the New Deal, 1933 – 1940 by James Stuart Olson. The author contends that this least-discussed of the New Deal agencies, with roots in the Hoover administration, was in face the most significant, aiming to “save capitalism” by pouring money into private businesses.

Historians have studied the “Keynesian revolution,” looking to the 1937-1938 recession when reductions in federal spending triggered a serious economic decline and bankrupted the budget balancers. The 1938 increases in federal spending and the accompanying improvement in the general economy gave Keynesians more credibility. Ultimately, massive government spending during World War II convinced most Americans that manipulating consumer demand through taxation and spending was the magic cure for unemployment and inflation. But years of monetary experimentation preceded the conversion. Between 1931 and 1938, the government ran the gamut of monetary solutions using the RFC and the Federal Reserve system, but gradually, as the money supply theories faltered, fiscal theories reached a wider audience and gained credibility. Not until World War II did Keynesian economics triumph, but the frustrations and setbacks of the RFC business loan program during the 1930s prepared the way for the intellectual breakthrough demand management achieved between 1938 and 1945.

For the RFC, World War II represented the fulfillment of its 1930s’ expectations. Suddenly there was a scarcity of capital and unprecedented demand for credit. Bankers began increasing the volume of their loans, from just over $2.1 billion in 1938 to more than $40 billion in 1945. For the first time the RFC found itself facing a huge demand for loans from sound companies. During the next four years, the RFC approved nearly $40 billion in loans to tens of thousands of businesses. Defense spending created an insatiable need for RFC resources, and excess reserves were soaked up by hungry businesses. The liquidity trap was broken. Deficit spending became enshrined as the backbone of postwar economic policy.

Between 1933 and 1940, Jesse Jones and the RFC walked carefully along the twisting path of New Deal public policy, passing through the bank reconstruction and cooperative planning phase of the NRA in 1933 and 1934, the direct loan phase of 1934 and 1935, the budget balancing phase of 1936 and 1937, and the antitrust and spending phases of 1938 and 1939. Through it all the RFC staked out a middle ground, avoiding the extremes of the political left and right, trying to find an accommodation between the needs of business and the demands of government. While insisting that the RFC avoid bailing out bad Wall Street loans, Jones also refused to use the agency in any populistic crusade, digging in, for example, on the proposal that the RFC pay off the depositors in closed banks. Although he allowed the RFC to buy preferred stock in thousands of banks, he would not let common stockholders off the hook, insisting that they match the government investment before he would proceed. Jones refused to have the RFC follow the lead of Adolf Berle and Rexford Tugwell in becoming a massive agency controlling the flow of capital in the economy, but he also realized that the age of laissez-faire, if it had ever existed, was thoroughly dead by the 1930s. Jones wanted the RFC to liquefy the money markets, but he did not want the federal government to assume ownership or even control of them. He successfully resisted making bad loans to the clamoring hordes of small businessmen, but had no problem with the RFC enthusiastically creating a secondary market for FHA mortgages or permanently entering the banking field with the Commodity Credit Corporation.

If the RFC loan program had failed to bring commercial credit back to its 1920s levels, its accomplishments during the 1930s were nevertheless impressive and, in many instances, permanent. The bank reconstruction and preferred stock investment program had rebuilt the money markets, and along with the rest of the New Deal credit establishment, the RFC had provided a financial liquidity which prevented a total collapse of the economy and set the stage for recovery. Although RFC railroad loans and investments had not restored solvency to the transportation system, they had postponed bankruptcies and permitted reorganizations, buying time for insurance companies and mutual savings banks to reduce their holdings of railroad bonds. Fannie Mae and the RFC Mortgage Company did not revive the construction industry, but provided a valuable secondary market for FHA mortgages…

… By the end of World War II, public policy in the United States bore little resemblance to its 1920 counterpart. The federal government emerged out of the Great Depression and World War II with direct responsibility for regulating the business cycle. State capitalism had become the norm. The federal credit establishment was permanently underwriting the money markets, and Keynesian economics had become the panacea for achieving full employment and stable prices. The foundation for state capitalism had been laid during the 1930s, and dozens of government agencies had appeared to support the private economy. The Reconstruction Finance Corporation had been directly involved with most of them: the Federal Emergency Relief Administration, Public Works Administration, Works Progress Administration, Civil Works Administration, Federal Home Loan banks, Federal Deposit Insurance Corporation, Tennessee Valley Authority, Electric Home and Farm Authority, Disaster Loan Corporation, Home Owners’ Loan Corporation, Farm Credit Administration, Regional Agricultural Credit Corporations, Federal Intermediate Credit banks, Federal Land banks, Federal Farm Loan Commissioner, Federal Farm Mortgage Corporation, Federal Housing Administration, Rural Electrification Administration, Resettlement Administration, RFC Mortgage Company, Export-Import Bank, Commodity Credit Corporation, National Recovery Administration, Federal National Mortgage Association, and the Agricultural Adjustment Administration. Conservative but not ideological, pragmatic but not experimental, the RFC avoided political extremes while wholeheartedly accepting its responsibility for saving capitalism. It was, quintessentially, a product of the American mainstream. Along with the National Recovery Administration and the Agricultural Adjustment Administration, the Reconstruction Finance Corporation was a major recovery agency and, as the only one to survive intact throughout the 1930s and World War II, the most symbolic of the New Deal and the state capitalism it fostered.

The Government claims to be facing £19bn of “unexpected” extra costs from the NHS, pensions and schools, creating pressure for tax rises.

..But a Guardian report from June suggests the measures were pre-planned.

The Education Secretary suggested easing visa rules for foreign students…

…Yet the proportion of non-EU student migrants switching from study to work visas within one year of arrival is at a record high.

Sir Keir Starmer has touted a UK-EU “security pact” which will include terms on migration, decarbonisation and critical minerals.

The Government may drop its objection to the International Criminal Court’s pursuit of an arrest warrant for the Israeli premier.

Most of the asylum seekers arriving in Britain are young men with few qualifications and limited English.

EU state aid rules reflected in the Windsor Framework may prevent the Government from saving the Harland & Wolff shipyard in Ulster.

Turkey returned a $5bn Saudi deposit in what has been seen as a mark of confidence.

The Department for Work & Pensions reported a greater propensity to tolerate fraud in the benefits system.

The police blamed rising assaults on women and girls on online misogyny.

Up to 90% of car washes may employ workers illegally.

China and the EU are now joint second for global corporate R&D investment.