Free-market capitalism is undoubtedly the engine of choice for powering the world economy (and money is the fuel that it runs on). This was the inescapable conclusion to be drawn from the collapse of communism and the great ideological argument of the last century. But obviously no one wants a vehicle that hurtles around in an uncontrolled fashion. The most powerful engine imaginable (and the fuel to run it) is useless and potentially dangerous without the controls to steer it and adjust the speed.
You cannot have an economy whose sole purpose is for owners to enrich themselves at the expense of workers and consumers. Buyers and sellers seeking to maximise their gains with little or no concern for others is a blueprint for conflict and disaster. There has to be some redistribution of wealth, otherwise the social fabric that binds us together is progressively jeopardised. It has to be careful it doesn’t overplay its hand, but the state has to have a role in protecting its citizens against the worst excesses of free markets. It must act as society’s conscience. So, how much state interference is required? Not too much – draconian restrictions would obviously be deleterious. But measures should be put in place to prevent price-fixing cartels from careering off the straight and narrow.
The recent claims of market manipulation by oil companies reveal the dark side of unfettered free market capitalism. One worrying aspect of this is the collateral profiteering by the government. If the basic price of petrol is deemed to be illegally high, it follows that the taxation is also illegally high, given that fuel duty is a percentage of the pump price (currently about 60%). Clearly, governments should not tolerate conditions that allow social cohesion to be sacrificed in worship of the markets. They certainly shouldn’t exacerbate those conditions themselves.
In the current economic conditions, it may seem like we’re driving uphill and don’t need to worry about brakes, but that doesn’t mean we should dispense with them altogether.