This afternoon - at the World Economic forum, mind, not some whacky think-tank where we might have thought he was pandering to his audience - Cameron gave this speech. It is pure Red Tory. Now, I know I said we shouldn't be too quick to dismiss the Red Tory position. And I know I said that Private Capitalism is finished and that we have a new era of State Capitalism before us. But it's still a shock to read it all set out so explicitly.
Cameron says that Capitalism is "broken". He says we must abandon the "old free market orthodoxy". He says that competition should be "local". He objects to the distribution of wealth that Capitalism results in. He buys the Red Tory view that globalisation promotes monopoly. He objects to multinational companies, calling them "global corporate juggernauts".
Some readers are doubtless tempted to imagine that this is all meaningless waffle. I think they are quite wrong. Through the power to direct capital granted to them by the nationalisation of the banking system, the Red Tories are going to be able to remake society along the lines they want. They will be able to establish local banks, regulated so as to provide capital only to local businesses. This can be used to promote local competition and to significantly undermine trade between areas. Instead of the country being integrated, we will become localised - cantonized. With the death of trade, local communities will become much more integrated - trading much greater community cohesion for much less national cohesion. To maintain coordination between cantonized communities, it will become crucial to establish coherent narratives of national identity - Britishness will become of vital and urgent importance.
The happy outcome would be if the Red Tories succeed in trading an improvement in social bonds - in marriage etc - for the slower economic growth that will result and for the oppression and corruption that will inevitably attend the exercise of state power on the scale they envisage.
What I am less clear about is what moral system Cameron has in mind for his "Moral Capitalism". By what principles will we decide which companies are to be permitted to receive money and operate, and which companies and projects are to be deemed socially undesirable, denied funds and regulated out of existence? The Red Tories appear to have in mind Catholic social theory, from Aquinas to Chesterton. That is an option, but I think it would be a surprising one for Cameron to favour. What does he want?
I think this is a vital question. As I have argued before, markets are intrinsically highly compatible with tolerant and multiply-cultured societies, for markets don't care about your motivations, morals, religion or politics, beyond the few market morals - truthfulness, promise-keeping, law-abiding, and some vague desire for mutual benefit from deals. In contrast, a Red Tory State Capitalist economy needs a moral framework. I have no real idea what moral framework Cameron has in mind, but getting the right one will certainly be the difference between "OK" and "Nightmare" for this sort of directive system. What is it to be?
UPDATE: Here's what Blond had to say in Comment is Free today. He's straightforward and explicit. He wants "a local system of credit that is attuned to the local economy, so that ability to pay and the asset value of what is purchased are both more acutely aligned to the local economic base". He's equally explicit that he wants it to be Catholic social theory that guides this new economic order. Cameron appears to have bought Blond's critique of private capitalism and his concept of a new economic system. Does he also share Blond's view as to the best moral guiding hand?