In a review in The First Post of Nick Cohen's new book, "Waiting for the Etonians," Oliver Kamm has a typically discerning view of the Labour Party's relationship with Britain's massive financial sector:
The great weakness of New Labour in economics was not its appreciation of the liberating power of globalisation. It was instead a failure to recognise that commerce is an interest group like any other. That misconception caused New Labour to be unaccountably docile before the City.
The task of government is to insulate the public space from sectional interests, and to create a framework of rules in which rights are protected and personal liberties maintained. It is a peculiarly destructive mistake to suppose that the task of government is to promote British commerce. That way lies the diversion of public resources to partial causes. And it is a mistake that goes some way to explaining why the global financial crisis has been peculiarly damaging to the UK.
The British economy is skewed to the financial services sector. There is nothing inherently wrong with this: it is snobbery to suppose that manufacturing matters whereas services do not. But the unspoken assumption that it is the responsibility of government to promote the interests of a particular commercial sector has had a terrible outcome. Financial regulation was patently inadequate. Banking supervisors had no conception of the systemic risks posed by the development of complex financial products.
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