Chancellor channels Adam Smith with a twist

Photo by Donovan Reeves on Unsplash

The Unit is increasingly spotting covenantal credentials on Whitehall as much as in the Commons.

In his ‘Mais Lecture’ the Chancellor set the record straight on Adam Smith’s oft misunderstood 'invisible hand’.

Smiths account of the market economy, is not as some have suggested a values free construct which rationalised social choice. Markets do not operate independently of societies; rather they are reliant on law and norms, to generate the crucial currency of trust.

The Chancellor went on to make ‘the moral case for the market’ which he insists ‘rests not just on freedom.’

…the free market creates the wealth that allows us to support our families and our communities. But we need to guard against the market reaching too far into these realms, eroding the bonds between us, and turning a market economy into a market society.

We’ve long argued that markets must serve more than consumer interests, attending to the broader social needs of individuals too. This is ‘responsible capitalism’.

Like us, the Chancellor resists that ‘the answer to everything is more Government.’

So how do we accelerate growth and rejuvenate our national productivity? I believe the most important role for government is to create the conditions for the private sector to do things differently - a new culture of enterprise.

This new culture of enterprise must empower better businesses that serve the consumer as well as social goods such as thriving communities.