Unlike most of the people who name-drop the book, or attempt to ridicule what they believe to be its thesis, I read it closely many years ago and am still in awe of its achievement. Not least because it has that hallmark of a great book: parts of it strike you at unusual moments.

Such a moment occurred when I noticed the latest philosophical musings of Teen Vogue last week.

Teen Vogue is a fascinating window onto the confusions of our time. Even the greatest fans of Vogue know it is not the place to go for in-depth analysis on political or fiscal issues. You’d think the teen version would be an even less suitable venue for considering the historical dialectic. But once again John O’Sullivan’s famous law (that any institution or enterprise that is not explicitly Right-wing will become Left-wing over time) is being vindicated.

Further reading

Fukuyama's blinkered view of history

By Douglas Murray

You might imagine Teen Vogue to be as aspirational as its parent-brand and so betray some sympathy for the free market. But, in fact, it is less about living the free market lifestyle, than promoting the oligarchical levels of wealth necessary to live a life of the kind portrayed in its pages. And it appears that such oligarchical aspirationalism can now sit comfortably alongside ‘luxury’ socialism and communism.

In July this year, the publication ran a fluffy, admiring interview with self-styled “literally a communist” Ash Sarkar. Teen Vogue seemed intent on elevating Sarkar as a role model for their readership, putting the “cool” back into communism, and the “glam” into gulag. This wasn’t, however, a one-off and not simply the result of everyone but one communist-chic intern being out of the office that day.

Even earlier this year, in April, Teen Vogue published an article headlined “What ‘Capitalism’ Is And How It Affects People“. It was an explicitly anti-capitalist piece written by a campaigning anti-capitalist called Kim Kelly. On social media, the publication promoted this piece under the heading “Everything you need to know about capitalism”. A surprising claim, and – some might say – presumptuous. After all, is it really possible to write everything that people might need to know about capitalism in one article? And if so would the likely source of such an article really be Teen Vogue?

Further reading

'Nazi hunts' are a sign of our hyperventilating times

By Douglas Murray

In recent days, the publication has once again brought itself to the notice of people who would not otherwise normally investigate the political stances of Vogue world. Last week, Teen Vogue’s Twitter account re-published its April article – so important they obviously believed it to be. They did so with the teaser: “Can’t end poverty without ending capitalism!”

Can't #endpoverty without ending capitalism! https://t.co/LyMvhM1HkJ

— Teen Vogue (@TeenVogue) October 17, 2018

Fortunately, Twitter was also on hand to point out that rather than being the cause of poverty (and the eradication of capitalism therefore being a good thing), capitalism has in fact lifted more people out of poverty – and faster – than at any other time in human history.

https://twitter.com/ne0liberal/status/1052660248987795458

Perhaps Teen Vogue felt a smidgen of self-awareness, for they re-tweeted a message from the author of their April capitalism piece. Clearly stung by the widespread use of facts to counter her original thesis, Kelly simply tweeted:

Good morning, capitalism is still bad

— Kim Kelly (@GrimKim) October 18, 2018

Which Teen Vogue thought worth sending out to their 3.4 million followers.

Many people will be baffled. They will wonder how any publication or individual could be so lacking in cognitive skills that it would repeatedly wallow in all the conveniences of capitalism (and promoting, it must be said, some of its worst aspects) while also lobbying for that system’s destruction.

Which brings me back to Fukuyama. At the conclusion of The End Of History, the author mused on the likely behaviour of the people who find themselves at the end of the historical process as delineated by Hegel and himself. Fukuyama posits, among other things, that some people may become enraged at the end stages of the historical synthesis because they will have too little to struggle against.

As a result they may struggle “against the just cause”, and “struggle for the sake of struggle”. Fukuyama warned that in this situation, “if the greater part of the world in which they live is characterized by peaceful and prosperous liberal democracy, then they will struggle against that peace and prosperity, and against democracy”[1. The End of History and the Last Man, Francis Fukuyama, 2012, p.330].

Further reading

CLR James rejected the posturing of identity politics

By Ralph Leonard

Anyone doubting that there are people currently in the position of Fukuyama’s “last man” would do well to study Teen Vogue – a publication which struggles out of habit amid the only system on earth which could ever allow such a publication to exist.

A publication which can promote the most extreme covetousness of luxury lifestyles and goods, while simultaneously advocating the end of capitalism raises many questions. Some of them must be counted above Vogue’s paygrade. Such as the question of how post-free market economies are meant to be run. But perhaps the questions could also be posed at a more local level. Such as, how exactly are people to buy luxury handbags in the post-capitalist world?

When it comes to tax, there’s one set of rules for big business and the rich, and another for everyone else. Remember the tax deal with Google, made by George Osborne, then Britain’s Chancellor, who hailed it a “major success”? The $800 billion internet giant had generously agreed to pay £130 million to Her Majesty’s Revenue and Customs. Amounting to an effective tax rate of 3%, that sum, agreed in 2016, was to cover tax it owed since 2011.

How many small businesses would get away with that?

A 2016 report by Oxfam America suggested tax avoidance by multinationals was costing the US around $111 billion a year. In an astonishing finding, they reported that between 2008 and 2014, the “50 largest US companies collectively received $27 in federal loans, loan guarantees and bailouts for every $1 they paid in federal taxes”.[1. .‘Broken at the top’, Oxfam America, 14 April 2016]

More recently, the Paradise Papers, published late last year, provided the latest in a long list of revelations about morally-compromised corporate behaviour: Apple sent its lawyers out to shop for offshore tax havens; mining multinational Glencore has a staggering 107 offshore companies; and the intellectual property of sporting Goliath Nike is nationless.

It’s not only corporates. The Paradise Papers, like the Panama Papers before them, also exposed the super-rich individuals using offshore accounts. What do cash-rich companies have in common with cash-rich individuals? Expensive accountants – dedicated to finding the loopholes and schemes that allow those with the broadest shoulders to bear the lightest (tax) load. Ordinary families, however, like small businesses, can’t afford to avail themselves of such services.

“But they would if they could”, will be the retort of some, followed by: “Anyway, it’s all perfectly legal.” And I think there’s some truth in that. No one likes paying tax – just look at the tax gap. HM Revenue and Customs, the UK tax authority, estimates it to be £34 billion – which is driven by behaviours ranging from criminality, through “failure to take reasonable care”, to avoidance. And SMEs are bigger culprits than big business, accounting for 46% of the tax gap compared to 28% for larger companies.[2. .Measuring tax gaps 2017 edition: Tax gap estimates for 2015-16, HM Revenue and Customs, 26 October 2017]

But it is the cosy, back-scratching relationship between money and politics that distinguishes the rich from the rest. Sweetheart deals are for the big boys that governments court… such as Google.

The recent Republican tax reforms prove the point. American corporations are avoiding paying tax by offshoring their profits, so instead of dealing with that, Congress pass a bill that, as Vox so aptly put it, provides “a giant permission slip for shipping profits overseas”.[3. Dylan Matthews, ‘The tax bill is a giant permission slip for shipping profits overseas’, Vox, 19 December 2017]

President Trump’s tax cuts also benefit the very wealthy – who just happen to be political donors – above the ordinary working families he promised to champion. Washington non-profit, the Institute on Taxation and Economic Policy, reports that in 2019 the top 5% richest households will receive more than 50% of the bill’s benefits, while the bottom 40% will receive 5%.[4. .‘The Final Trump-GOP Tax Plan: National and 50-State Estimates for 2019 & 2027’, Institute for Taxation and Economic Policy, December 2017]

In the UK, the tax system is likewise skewed in favour of the wealthy. Just look at the lower rates of tax charged on income from capital compared to income from labour. A shift worker putting in 40 hours pays a higher rate of tax on their earnings than the property speculator pays on their profits. Which is a double blow when you consider that the profit has been made, at least in part, because of the investment of a local community and its taxpayers (in roads, buses, parks, policing…). That’s not about avoidance, it’s in-built bias.

78% of Americans and 76% of Brits believe “the economy of my country is rigged to advantage the rich and the powerful”.[5. .Global Trends. Fragmentation, Cohesion and Uncertainty, Ipsos, 2017] When it comes to tax, they’re right – and, along with the other six ills of capitalism, it’s threatening the free market model. Time to stop lamenting the loss of faith in capitalism’s prosperity-generating power; time to start treating its ailments.

Throughout next week UnHerd is exploring how the UK tax system can be reformed to tackle the biases in personal taxation. Our latest audio-documentary, out tomorrow, asks: Can a wealth tax save capitalism?

“The most common way people give up their power is by thinking they don’t have any.”

― Alice Walker 

Today, the world is confronted by globe-spanning, tax-dodging corporate behemoths; monopolies based on advanced, intrusive as well as seductive technologies. Some are armour-plated cartels with ever-stronger (and longer) intellectual property protection. They include not only the FANGS – that bundle of high-tech platform utilities – but also Big Pharma, Big Agrobusiness, Big Media and Megabanks. The rise of these new monopolies has coincided with the lowering of real wages, especially in the UK and US, for many workers, and to a reduction in the labour share of the economy.

The process of monopoly (or giant oligopoly) creation has accelerated at a reckless pace.

As economic power has become more concentrated, so levels of corporate crime have risen. Perhaps the most egregious of these was the conspiracy involving Barclays, a 300-year-old British bank, in rigging the interest rate that people and corporations around the world pay for loans or receive for their savings. LIBOR – the London Interbank Offer Rate –was used as a benchmark to set payments on about $350 trillion worth of financial instruments.

The process of monopoly (or giant oligopoly) creation has accelerated at a reckless pace. But can this late-capitalist model survive populist uprisings across the world?  Can it survive the political instability caused by the gross inequality in wealth fostered by increased monopolisation?

For many decades, the USA operated a strong anti-monopoly (or “anti-trust”) policy.  Beginning with the Sherman (1892) and Clayton (1914) Acts, the federal government oversaw an era of active interventionism to regulate, prevent or break up monopolies, reaching a new peak with FDR’s New Deal in the 1930s. It is no accident that the strongest steps to control big finance and Wall Street ran in tandem with anti-trust laws – first with the creation of the Federal Reserve in 1913, and then with the Glass-Steagall Act of 1933.

In Britain, the home of ultra-laissez-faire ideology, action against monopolies was more restrained. Indeed, the common law doctrine of unlawful “restraint of trade” was traditionally used more against trade unionists than against any corporate’s “conspiracy against the public, or… some contrivance to raise prices” in Adam Smith’s famous phrase. True, from 1948, legislation was passed to give some limited powers over monopolies and mergers, but they were used more modestly than in the anti-trust heyday in the States.

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Global monopolies were not created thanks to technology, or to entrepreneurial genius – but because we citizens let them happen

The big change in ethos came with the era of financial liberalisation, notably the Nixon-Reagan-Thatcher years, effectively endorsed in the Clinton-Blair period. First, the creation of a private monopoly was no longer seen as a bad thing (recall for example how at its peak Microsoft avoided break-up). Glass-Steagall was repealed in 1999, with support from Bill Clinton and the economist Larry Summers, symbolising the bi-partisan policy of support for hyper-financialisation.

The Reagan-Thatcher era also gave birth to the privatisation boom, with an ambiguous policy towards monopoly, leaving telecom giants in place, while also (in the UK) illogically fragmenting the rail network.

The myth propounded by recent governments is that the answer is more competition, with the public constantly checking prices (usually unfathomably expressed) from ever more new entrants to each utility. Everyone understands that this is a farce, since it relies on the inertia of the majority for a minority of customers to benefit. The attempts by regulators to police the system have likewise failed, so that customers have become victims of “regulatory capture”.

The EU runs a different competition and monopolies model, still (contrary to Brexiter mythology) from a strongly capitalist perspective. If the Anglo-Saxon model is founded on laissez-faire, the continental model has strong roots in German ordoliberalism, with its emphasis on rules and their enforcement. The European Commission takes its role more seriously in taking on cartels and harmful private sector monopoly acts. It was the Commission that forced the telecom oligarchs to abandon roaming charges. Its Commissioner Ms Margrethe Vestager (a staunch economic liberal) has taken on Google in ways not yet seen in the UK.

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The great British public is supremely unconvinced by the past decades of privatisation

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After decades of experience of privatised utility monopolies, in water, gas and electricity as well as rail, the great British public is supremely unconvinced. Polling by Populus and Legatum Institute showed that 86% said favoured public ownership of water, 77% gas and electricity, and 76% rail.  50% supported public ownership of banks.

The next step is for the British public to understand that it has the power to hold these companies accountable.

• This can be done by Parliament enacting tough anti-monopoly laws.
• Secondly, a democratic government can use its powers more effectively to break up companies that do not act in the public interest.
• Third, companies that have a strong public interest dimension should be required by law to fulfil public service obligations. Those obligations have already been imposed on the liberalised network industries in the EU, but public service obligations need now to be extended to companies in the gig economy.

Global monopolies were not created thanks to technology, or to entrepreneurial genius. They happened because we, as citizens let them happen. We must not give up our power to change this monopolistic system, by thinking that we don’t have the power. As citizens of democracies, we most certainly do.

First came the uncompromising manifesto, sharply critical of corporate excess and promising “an examination of the use of share buybacks, with a view to ensuring these cannot be used artificially to hit performance targets and inflate executive pay”.

Then came the clear warning to those running big companies that business as they knew was coming to end:

“Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.[1. .’A Sense of Purpose‘, Jan 2018]”

Those who do not “will ultimately lose the license to operate from key stakeholders”.

No wonder some business leaders are quietly terrified by the revivalist movement among left-wing populists that includes Jeremy Corbyn, Bernie Sanders and Jean-Luc Mélenchon.

Except those words don’t come from the Left. The manifesto was that of Theresa May’s Conservative Party. And the warning to CEOs came from Larry Fink of Blackrock, the biggest investor in the world.

When criticism of corporate short-termism and self-interest comes from such sources, it seems fair to conclude that something is up.

Meanwhile, some things are down. Business investment, for example. Companies are spending less of their money on the technology, equipment and training that will, over time, make their operations and – crucially – their people more productive.

At the Social Market Foundation, we recently calculated that the cash reserves of UK non-financial corporations stood at £660 billion in 2016[2. .’Concentration, not competition: the state of UK consumer markets‘, SMF, 17 October, 2017].

Business investment that year was around £178 billion, or 28% of that cash pile. In 2000, businesses invested the equivalent of 58 % of their cash reserves.

Even allowing for fluctuations in the business and political cycle and changes in monetary policy over that period, companies are investing less. We’re nowhere near unravelling the puzzle of dismal post-crash productivity growth in developed economies, but it is extremely hard to imagine that corporate investment decisions have no part in it.

Dismal productivity, of course, means slow, low or even negative wage growth, which in turn means that when the Corbyns and Sanders and yes, Trumps of this world tell workers in traditional industries that they’re being screwed by a rigged system, they probably have a point.

In other words, the corporate titans who wring their hands about the rise of anti-capitalist populism might stop and ponder whether their own failure to plan – and invest – for the long-term might just have helped shake the pro-business, open-market political settlement they’d come to take for granted.

At the same time as companies have been investing less, they are handing more of their cash to shareholders. Dividend payments by UK companies were almost £95 billion in 2017, up 10% on the previous year, and the latest in a string of record highs.

On a narrow reading of corporate duties and responsibilities, dividends are reasonably defensible: it is, after all, the shareholders’ money.

Much harder to defend are the share buybacks mentioned in that Conservative manifesto – surely the first time any major party referred to a relatively obscure and technical bit of financial engineering.

Buybacks, where companies use their own cash to buy their own shares on the open market, are economically inexplicable. But if you’re an executive whose remuneration package is linked to earnings per share, they’re good business, because by reducing the number of shares in circulation you bump up EPS and make yourself rich(er).

And they’re on the rise, as Charlotte Pickles explained here last month with devastating precision. Recent research from Deloitte nicely charts the trends in buybacks and investment.

What’s the answer? A lot of people talk about reporting rules, the fiduciary hoops that CEOs must jump through to keep markets and investors informed and content. Chasing good numbers for quarterly reports prevents executives taking a longer view, it is said.

After John Kay’s characteristically incisive report for the Coalition Government in 2012[3. ‘Kay review of UK equity markets‘, July 2012], the Financial Conduct Authority (FCA) stopped mandatory quarterly reporting in 2014.

Recommended reading

Corporate buyback culture is financial engineering not value creation

By Charlie Pickles

UK companies have duly started to move away from quarterly reporting: firms such as National Grid and Aviva led the way, and now 40 of the FTSE do not issue full reports every three months. In the FTSE-250, more than half have abandoned quarterly reporting. An end to short-termism? This battle is far from done. Work by Suresh Nallareddy and others at Oxford University questions whether a change in reporting periods alone can significantly alter corporate behaviour.

They found no clear evidence that moving away from quarterly reporting led to an increase in investment.

There is, then, still much to be done to persuade the people running big companies to think about more than EPS and annual profits.

Some of the answers will surely be found in other parts of the Kay Report, which also called for real change in executive pay deals, suggesting that much of the huge wealth bestowed on CEOs be locked away from them for years after their departure: that might create a real incentive to plan for the firm’s long term interests.

Breaking the curse of short-termism will require countless changes, not least in culture: “corporate social responsibility” has become a discredited PR wheeze that must sooner or later be replaced by an understanding that without a genuine sense of social duty, business will not just create its own gravediggers, it will ensure they get elected too.

But as a first step on that journey, start with CEO pay and tenure, which should be lower and longer.

“I love this stuff,” said Stan Druckenmiller in September 2013. “This is fantastic for me and for every rich person.”

A legendary Wall Street investor and former right-hand man to George Soros, Druckenmiller was talking about Quantitative Easing (QE).

Speaking four and a half years ago, Druckenmiller was concerned that central bank money-printing had gone too far. By pumping up financial markets, while crushing the amount of interest that ordinary savers could earn, QE was disproportionally benefiting the already wealthy.

“Who owns assets – the rich, the billionaires. You think Warren Buffett hates this stuff? You think I hate this stuff?’ declared Druckenmiller. “This,” he continued, “is the biggest redistribution of wealth from the poor and the middle class to the rich ever”. Druckenmiller’s statement formed part of a radio documentary I made at the time.

The significant redistributive effects of QE have long been obvious to those with a passing knowledge of economics and – that rare, even endangered thing – an open mind. It’s only recently, though, as politics has become more polarised on both sides of the Atlantic, that QE’s unfair implications, and its role in fuelling popular discontent, have begun to be widely discussed.

I fully accept that, during the immediate aftermath of the 2008 financial crisis, “extraordinary measures” were necessary to avert disaster. Following the Lehman Brothers collapse, and the freezing of inter-bank markets, the global economy faced disaster. Had the world’s leading central banks not provided emergency liquidity, payment systems would have collapsed, sparking panic, instant economic torpor and serious civil unrest.

Since then, the Western world’s virtual printing presses have seen almost constant action. The Fed has expanded its balance sheet from $800bn to $4,400bn – implementing six times more QE than originally envisaged. The UK has implemented £435bn of QE – almost nine times the amount originally advertised.

The ECB, having initially hidden its QE activities behind a myriad of technicalities to avoid provoking German voters, has caught up – and fast. The balance sheet of the eurozone’s central bank now exceeds $5,000bn – significantly bigger than the Fed’s. Bigger – not only as a percentage of GDP – but in absolute terms, too. And the Bank of Japan is in a class of its own. After years of hyper-QE, its balance sheet now also outstrips that of the Fed, despite the Japanese economy being less than a third the size of America’s.

The QE we’ve seen since 2008 hasn’t been straight money printing. From ancient Rome to revolutionary France and Weimar Germany, that has always ended in tears. Instead, the Fed, the Bank of England and other members of the global central banking get-togethers have been creating electronic balances ex nihilo and using them to buy bonds. The initial idea was to absorb bad debts from fragile banks and other corporate investors – so as to shore up the financial system.

What QE became, however, was a way for central banks to buy endless government bonds. That’s allowed ‘advanced’ economies to keep government spending and borrowing high, while rigging bonds markets to keep interest rates historically low. This was supposed to maintain confidence and spark ‘trickle-down’ growth.

What we’ve seen since the Lehman collapse has instead been, across the Western world, the slowest, most hesitant economic recovery in recorded history – as well as a host of negative side-effects:

• Years of QE and ultra-low interest rates have hammered savers. With rates below inflation, real interest rates have been negative, meaning that the thrifty lose out. Rock-bottom annuity rates, resulting from the impact of QE on sovereign bond yields, have condemned countless retirees to lower pension incomes for the rest of their lives.
• The flip side of savers’ low interest-rate pain has been a massive wealth transfer to the bailed-out banks. Voters have had to watch the financiers, having wrecked the economy, get rich at everyone else’s expense all over again. That tears at the heart of the social fabric.
• The massive Western monetary expansion has generated deep distortions within both equity and bond markets AND which – as QE is withdrawn – could unwind in a rapid and explosive manner. While almost no-one wants to discuss this, it is an obvious high risk.
• Equity markets are particularly over-valued. The US Dow Jones Industrial Average closed at an all-time high on more than seventy times during 2017. Valuations are stretched on low trading volumes – a classic indication of crash territory.
• In the UK, in particular, but also the US, much of the QE money has ended up in real estate. This has pushed average house prices to historically high multiples. In Britain, the average home now amounts to eight-times average earnings.
• As such, home ownership is plunging, especially among the crucial family-forming 25-39-year old age group. These were the voters who, in the June 2017 general election, backed Jeremy Corbyn in droves. By juicing up the housing market, and pricing-out a generation of young adults, QE has changed the face of British politics
• Discontent with QE also helped fuel the emergence of the right-wing ‘Tea Party’ in the US – which, in turn, paved the way for President Trump’s populism.
• QE has also driven the populist fringes in Germany. Former Finance Minister, Wolfgang Schäuble blames QE for the electoral success of the right-wing nationalist party Alternative für Deutschland, while warning that the ECB’s QE policies will “ultimately end in disaster”.

Why hasn’t QE led to inflation? The answer is that it has – but the inflationary pressures have been channeled into stocks, bonds and property, prices that don’t feature in the price measures of retail consumers. It should be noted, also, that a large chunk of the funds created by central banks have, for now, remained out of circulation. That’s because banks and other corporate investors that sold bonds and other financial instruments to central banks, receiving QE cash, returned that cash back to central banks. Rather than using these funds to lend – part of the point of QE – commercial banks were required by regulators to set aside more ‘reserve capital’ with central banks – all to strengthen their balance sheets.

Much of this ‘lodged’ QE money, though, remains in existence, even if it is currently held by central banks on behalf of commercial banks. As the global economy picks up, and bank lending increases, part of that money could well re-enter circulation, driving the inflationary impact of QE to sectors beyond financial assets and real estate.

The Federal Reserve and Bank of England are no longer printing virtual money. The Fed – and to a much lesser extent its UK equivalent – have also begun to normalise monetary policy, by starting, albeit gingerly, to raise interest rates. The ECB and Bank of Japan, though, continue to boost their balance sheets using QE, creating the equivalent of tens of billions of dollars of virtual money each month – which helps to keep global stock markets high. So QE hasn’t ended, not by a long chalk and no-one really knows what will happen to global markets when it does.

In the meantime, negative real interest rates continue to penalise not only ordinary savers but institutional investors such as pension funds. Ongoing low bond yields mean such investors, to meet ongoing obligations, are forced to channel money into far riskier financial assets, potentially stoking another boom/bust cycle. Negative real rates are also squeezing banks’ margins, making them even less willing to lend – the exact opposite of what QE was supposed to achieve.

While QE and ultra-low rates were justified at the outset, then, immediately after the 2008 crisis, they’ve long been deeply counter-productive. These policies have lingered because, by making financiers even richer and letting governments keep borrowing, they have attracted powerful friends.

Influential voices, though, are now speaking out. Noted City grandee Sir Martin Jacomb says rock-bottom interest rates, by warping capital markets and abusing savers, are “causing great harm” to companies and households. The authoritative Bank for International Settlements judges that monetary policy is “overburdened”, posing “a potential threat to financial stability”. US investment guru Bill Gross says “central bankers are threatening the engine of the economy by keeping interest rates too low for too long”, concluding “this cannot end well”.

QE will go down in history as a policy that prevented disaster but, through reckless overuse, ended up doing considerable harm – not least in terms of further skewing the distribution of wealth. “I mean, maybe this trickle-down monetary policy that gives money to billionaires, and hopefully we go spend it, may end up working,” said Stan Druckenmillar back in 2013. “But it hasn’t worked for five years”.

Almost another five years on, these words still ring true.

Read more on the (un)accountability of the world's central bankers

Blame central bankers and their easy money for our troubled economic times

By Douglas Carswell

They are the two giants of the global financial press.

One, acquired by Rupert Murdoch in 2007, is clearly of the Right. The Wall Street Journal has been a champion of the Republican tax cuts package that Donald Trump signed into law at the end of last year.

But if the WSJ can see no wrong in the signature project of the American Right, we need only cross the Atlantic where, in the outlook of the FT, we find a business newspaper that sees no good in the flagship enterprise of Britain’s Right – Brexit.

I exaggerate a little in saying “no wrong” and “no good” but only a little. Crucially, it’s the one-eyed character of both platforms on such consequential questions that is so striking and depressing.

First, America. The US Right and the Journal have signed up to an economic theory of tax cuts that has a status only one step higher than “written on the back of a cigarette paper”. The Laffer curve, infamously scrawled on to a bar napkin in 1974, purported to show that government revenues actually increased when certain tax rates were reduced – because of the turbo charge that they gave to the encouragement of initiative, overtime and other economy-expanding activities. But despite the four decades of evidence which suggest few tax cuts ever come close to financing themselves, the Republican Party has fallen irrationally in love with a theory that says there need be no conflict between an aspiration to be a tax-cutting conservative and a fiscal conservative. And it’s a deep love. Not one Republican law-maker in Washington has voted to raise tax in any meaningful vote since 1991.

As for team FT, they may have been a model of prudence when compared to the Journalistas on the topic of tax, but they can’t claim to be less ideologically rigid on the issue where their own journalistic qualities are being most tested. When it comes to understanding why more British citizens voted for Brexit than have ever voted for any other cause, party or candidate in the nation’s history, you might be interested to know that not one regular FT columnist is a Brexiteer. However, when he was interviewed for Radio 4’s Media Show, the newspaper’s Editor, Lionel Barber, insisted the FT mind was not a closed one. To prove this openness he named three pro-Leave writers who graced his OpEd pages but oh dear – it wasn’t much of a proof. For a start he named me – even though I’ve never written on the subject for them. Second was Iain Martin – who has been an exclusive columnist for The Times for 12 months. And, third, Jacob Rees-Mogg – but who doesn’t publish the Moggster these days?

We got closer to the FT‘s true attitude to the oh-so scandalous project of giving Britain the same self-determination that the vast majority of countries in the world enjoy (and most would never consider giving up) when a former Editor of The Economist wrote to the FT, saluting it for performing its “duty” of pouring scorn on the Brexit project. Bill Emmott’s dismissive was Tweeted as “letter of the day” by Mr Barber.

Curiously, we pay huge attention to the role of Fox News in corrupting American conservatism, and of the allegedly corrosive impact of the Daily Mail on British political discourse, but seem to have forgotten that the deadliest rot within movements and systems of thinking starts from the head. It’s not hard to discern whiffs of decay from within both the Journal and pink ‘un.

Surely any media organisations that failed to anticipate 2016’s unexpected shocks to the system, and which had been leading proponents of the policies that had helped to drive the political revolts, would be expected to have subsequently undertaken extensive soul-searching? But there have been few signs of it from either publication. If anything, they hold even more firmly to their former beliefs.

From a commercial point of view, neither the Journal or FT has much incentive to, for example, revisit immigration policies that provide rich readers and big company advertisers with cheap labour. Nor to question the property and monetary policies that have put rocket-boosters underneath the market wealth of the kind of people who buy jewelled Cartier collars for their dogs and splash out on the many other varieties of luxury goods sold from the pages of both papers’ glossy lifestyle supplements. For certain high-ups at the FT, 2016 will live long in the memory for a 65% jump in digital revenues from the paper’s How to Spend It magazine. What’s not to like about a year, and an economy, that delivers such largesse for the bottom line – directly from the 1%’s platinum cards?

Putting aside the commercial factors that inhibit honest rethinking, though, the key intellectual weakness that the FT and Journal share for the task of understanding our changing and anti-capitalist times is a lack of interest in the “unmeasured”. Just as tax relief for the family makes no sense to the Journal’s GDP-number-crunching-podcasters, so the behaviour of Brexit’s voters seems illogical to groupthinkers at the FT who, living in a world of day-to-day press deadlines and quarterly company results, can’t see much beyond the short-term economic costs associated with the uncertainty of transitioning from the stability of EU membership to a new, as yet unknown, arrangement.

Average citizens – and this is borne out by fascinating opinion polling – are less focused on the near-future. They, perhaps, can see the likelihood of an EU emerging that will make the weakness and drift of today’s Theresa May government seem trivial in comparison. They’ve made the simple but wise long-term bet that a 27-member organisation operating on 27 different electoral cycles will probably struggle to agree on anything much at all – especially anything important.

A greater degree of long-termism might not be the only thing Brexit voters could teach people who are willing to buy $67,000 necklaces. Three drivers of the votes of 2016 may be particularly deserving of more reflection.

Changes to family structure.

Family networks are fracturing. In part because rising house prices mean that many young families can’t afford to live near their parents. And what has been the consequences for this fracturing for the care of children and the elderly? Could it be that in wanting to put some limit on immigration and its effect on house prices – or at least by ensuring inflows become predictable – voters wanted to defend something that the FT and the economics profession never worries about in any meaningful way? What’s the economic value of your child’s gran being within walking distance? What has been the economic cost and implications for inequality of the wastelanding of so many working class family structures? And, fundamentally, what’s wrong with a society and an economics journalism that doesn’t seriously try to design housing or immigration policies that protect such relationships?

Security.

This may be the first and last time I ever quote Ted Cruz approvingly but I’d like to think the campaign commercial from his 2016 run (above) might have caused a few financial journalists to shift uneasily in their seats. Globalisation, immigration and sometimes doctrinaire free market trade policies have created huge amounts of insecurity for many poorer citizens of advanced nations. It’s easy for people unaffected (so far) by competition from Chinese manufacturers or Indian call centres to say insecurity is a price worth paying for cheaper consumer goods and services – when they are not paying that price.

The UK’s Vote Leave campaign “got it” in 2016 when it chose Take Control as its rallying call to people who felt increasingly “done to”. And another person who has “got it” is the economic historian Niall Ferguson. Talking to UnHerd, he argued that there had been inadequate political management of the pace of globalisation. While we might want to eventually end up in the same freely trading world that we are already largely immersed in, it might have been more judicious to have approached the destination more slowly and had the time to help victims of it to adjust more smoothly to competition.

And then there’s the nation itself.

The FT has its headquarters in London but most of its readers are international. They may appreciate their own territorial identities but probably not as much as the people that David Goodhart described as “Somewheres” – more rooted in their communities and with less wherewithal or interest to jet regularly to other places.

One of the greatest examples of national solidarity in modern times came when the Berlin Wall fell and the people of West Germany accepted a large tax hike to help pay for their fellow countrymen and women of East Germany to be fast-tracked through 40 years of economic falling behind.

When the people of Greece suffered austerity of a catastrophic kind from the euro crisis, did Germany offer similar solidarity or anything like it? No, despite the many ways in which the configuration of the single currency area has super-charged its manufacturing exporters. Exiting an artificial supranation in favour of something with so much more shared history, so many more shared institutions, and knitted together through familial interconnectedness wasn’t so dumb after all. This might well be proved during adversities in the years ahead – when Britain and/or the EU are called upon to make the kind of neighbour-respecting self-sacrifices that polities may depend upon to survive.

Adam Smith would not have made the same mistakes. He – through his own Moral Sentiments book and the overlaps of his thinking with that of Edmund ‘small platoons’ Burke – understood the importance of the non-material ties that bind.

But when the leading two newspapers of the business world are so indifferent to the social soils in which markets grow, it is no wonder that markets, market players and policy-makers can also become nine parts materialistic and only one part relational. They are obsessed with what the US commentator David Brooks has called resume values – values and decisions designed to power success in careers – rather than eulogy values – values and life choices of the kind honoured at a person’s funeral and in the remembering of the big, non-workplace choices they made for their families, neighbours and beliefs.

There is plenty that’s still brilliant in both of these newspaper titles. Unlike my colleague Douglas Murray, I wholly applaud the FT’s takedown of the President’s Club, for example. Saturday’s FT Magazine nearly always challenges and educates more than its rivals. Saturday is also the day when the WSJ shines. The Review section edited by Gary Rosen displays the intellectual curiosity that the daily comment pages no longer evidence very often. And, personally, I’ll never stop reading a paper which has the great Peggy Noonan on its books.

But, overall, mirroring the economics profession which has lost the humanitarianism of Adam Smith, the  footloose multinational firms that have no community roots, the tech firms which see childhoods as easy routes to greater market penetration, and the executive company boards under pressure to hit quarterly performance numbers, there is little commitment within the pillars of the capitalist system to the people-sized institutions which civilise, educate and care, or to the national identities which people are likeliest to make sacrifices for.

It’s a shame that the newspapers that should be so well placed to challenge rootlessness within capitalism are actually so very far away from even reporting the necessity of doing so.

THIS SERIES CONTINUES TOMORROW.

Yesterday evening's introduction to this series

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By Tim Montgomerie