JANET MACKINNON: March 2016

Going Underground: George Osborne and Boris Johnson (Mirror)

Some where along the line, British Chancellor of the Exchequer George Osborne became a state capitalist and so, arguably, did outgoing London Mayor Boris Johnson. In Osborne's case, this ideological acquisition may have been due to indoctrination during a gap-year visit to China as a young man, and/or the subsequent influence of Maoist - in their own words - Liberal Democrats like former Business Secretary Sir Vince Cable during the UK Lib-Con Coalition Government of 2010-15. In the case of Johnson, the embrace of state capitalism is more opportunistic, like the taking of a concubine who might be retained or discarded according to political expediency.

State capitalism, it may be argued, is the political expediency of the present economic age. Only yesterday, a Financial Times article entitled "Japan Inc: Heavy meddling" quoted the former head of the Tokyo Stock Exchange as saying: “The important thing about the rise of China is that most developed nations have seen that pure market-based capitalism sometimes cannot compete against the Chinese state."(1). However, Mr Osborne's enthusiasm for state capitalism goes beyond expediency and has more than a whiff of ideological fanaticism about it, although this may have something to do with the Chancellor of the Exchequer's austere dietary regime (2).

So it was a proposed "Sugar Tax" on soft drinks in yesterday's Budget to encourage the nation to downsize after the fashion of "Little George", as former larger-than-life Chancellor Ken Clarke sometimes calls his Conservative successor, that most caught the attention of the British media (3). In fact, this budgetary item might be compared to the evanescent fizz in a large tumbler of lemonade given to the infants of the national press whilst the real business took place elsewhere.

As Sky news had noted on the eve of Osborne's Budget: "Infrastructure Giants Line Up For New UK Fund" in the form of a "British Infrastructure Club‎, which will seek to replicate the track record of leading state-backed investment funds." The report also points out that "the Mayor of London has been a staunch advocate of the creation of a UK sovereign wealth fund with sufficient firepower to invest in British transport, housing and other critical national infrastructure."

Someone called "Zzz" (apparently used to mean sleepy, bored or tired, or the sound of a person snoring) and the sole commentator on the Sky report astutely remarked: "Cut through all the distracting rhetoric, Osborne is setting up another quango to spend the tax payers money on vote catching political projects." So there we have it. The state capitalism of George Osborne and Boris Johnson is deconstructed in a sentence, or is it? According to The Economist's "crony-capitalism index" of "the countries where politically connected businessmen are most likely to prosper", the UK was ranked 15th in 2014 and 2007 (5). This seems to be an area in which the economy has consistently performed well, for politically well-connected business people at least.