Coffee House

Ed Miliband is better placed than the Tories to follow Roosevelt

19 January 2014

9:54 AM

19 January 2014

9:54 AM

On Friday, Ed Miliband pledged to introduce greater competition in our banking market. Last September, he pledged to freeze energy prices for 20 months while our broken energy market is reset to expand competition and consumer choice.

Reforming broken markets to increase competition and address the long-term sources of our cost-of-living crisis might seem an unusual theme for Labour to champion. In fact it is an approach that has learnt from a progressive conservative tradition, one that understands the importance of reform to ensure that markets remain open and competitive.

Noone understood this idea better than the American President Theodore Roosevelt – a passionate believer in free enterprise, and a tenacious advocate of market reform.

Roosevelt became the 26th President of the United States in 1901, when William McKinley was assassinated just under a year after taking office for his second term. It was a period of Republican ascendancy in America: for 24 of the previous 32 years a Republican had occupied the White House. This was the era of rapid economic expansion, when the USA was undergoing the transition from the agricultural economy ravaged by Civil War of the 1860s to becoming the world’s industrial powerhouse.

Yet the 1890s had been lean years for many Americans. The Depression following the stock market crash of 1893 brought misery to millions. Thousands of businesses shut down, unemployment soared, wages declined and soup kitchens opened across the country to help the destitute. As Doris Kearns Goodwin puts it, ‘an immense gulf had opened between the rich and poor; daily existence had become more difficult for ordinary people, and the middle class increasingly felt squeezed.’

The experience of the 1890s convinced Roosevelt that continued prosperity, and the widespread enjoyment of the fruits of prosperity, needed a different approach to government than the economically laissez-faire Republican Party had hitherto advocated. The good times had returned for many by 1901, but Roosevelt knew that politics had fallen out of touch with a changed America, and had to catch up.


Roosevelt understood three central truths about the economic condition of his country.

First, that the foundation of true prosperity was not the interests of the privileged few, but the enterprise of ordinary Americans, ‘the greater number of small men who are decent, industrious and energetic’.

Second, that economic success brought concentration of economic power in industry and banking – resulting in large corporations (or ‘trusts’) whose dominance kept prices high and competition low. These were ‘tendencies hurtful to the general welfare’ and produced in Roosevelt the ‘sincere conviction that combination and concentration should be, not prohibited, but supervised and within reasonable limits controlled’.

Third, that protecting the interests of ordinary Americans – as entrepreneurs, workers and consumers – demanded an active government that was on their side. ‘No one matter is of such vital moment to our whole people as the welfare of the wage-workers’, Roosevelt said in 1901.

It was this philosophy that lay behind Roosevelt’s demand for a ‘Square Deal’ for Americans: checking the market power of huge corporations in areas such as banking and railways, protecting workers against oppressive terms of employment, and introducing unprecedented protection for consumers.

Though a conservative by instinct, Roosevelt knew that to protect the competition and enterprise on which prosperity depends, a different kind of approach to government was needed from the Republican administrations of the past. He spoke of ‘constructive statesmanship for the purpose of broadening our markets and securing our business interests on a safe basis’. It required reform of markets that weren’t working in the public interest, practical regulation to prevent excessive concentration of power, and new bodies to exercise oversight to ensure the rules were observed. Active government, in Roosevelt’s view, was not the enemy of a free economy, but was essential to secure the conditions under which a free economy can both work, and work in the interests of all.

A century later, and an ocean away, David Cameron’s Conservative Party seems impervious to the wisdom of Roosevelt’s progressivism. In their view, a nation’s prosperity is first and foremost based on the efforts of those at the very top; while concentration of economic power holds no threat to the sustainability of the recovery or the cost of living crisis faced by tens of millions. George Osborne’s anaemic efforts at reform of banking, and his characterisation of Labour’s energy reforms as straight out of Das Kapital, reveal a conviction that the attempt to repair broken markets is foolish and dangerous. It is an assumption of an automatic affinity between the interests of the private sector and the public interest that would have shocked Teddy Roosevelt, the progressive conservative.

Curious as it may seem, Labour under Ed Miliband is better placed to understand the enduring wisdom of Roosevelt’s progressivism. We have shown that in our banking and utilities, we want open competition, not broken competition. We understand that prosperity depends on the energy and enterprise of the many, which is why we reject trickle down economics and prioritising tax-cuts for the most well-off. We understand that sensible reform to bring about greater competition – in banking, energy and elsewhere – is not the enemy of free enterprise and efficiency, but its precondition.

Where does that leave David Cameron’s Tory Party? Wedded to an approach that favours wealth over enterprise, the status quo over reform, and vested interests over the public interest. And we can do better than that.

Lord Wood is minister without portfolio in Ed Miliband’s shadow cabinet.

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Show comments
  • Gareth Stone

    I strongly recommend that anyone interested in Roosevelt reads Gabriel Kolko’s ‘The Triumph of Conservatism’, where he advances the theory of ‘corporate liberalism’, i.e. where regulations actually work for the stabilisation of the existing biggest players. Also, more briefly – wherein Rothbard gives a sweep of the manouevres of the biggest businesses in relation to Presidents and candidates.

  • swatnan

    There is no harm in borrowimng ideas from other parties, if those ideas make sense.
    Labour is right in talking aboiut predistribution as well as redistribution of wealth accumulated. And certainly the Bankers have to be controlled. tIn the 2 centuries previous, there was definitely an international conspiracy of Bankers to control not just Govts but markets as well.

  • anyfool

    The 13 years you and your fellow Labour clones in government were behind the creation of more supersized companies than ever before.
    That you did not know this would happen because of your policies speaks more for your crass incompetence than ability.
    That these companies came about by laws enacted by you and you masters in the EU says your pretence that you can or will change these laws is nonsense.
    Making you a Lord has not imbued you with any gravitas, you are still the lightweight thinker you were before and your Master Milipede is still the dull minded fool who thinks reaction is effective action.
    An unfolding repeat disaster before our very eyes, as you and you kind slither towards another possible government.

  • 2trueblue

    From Liebores record they display that they have followed a totally different path whilst in power and brought this country to it knees. To suggest that a government led by Millipede is better placed to cure our economic problems is tripe.

    The economy of the US fully recovered when America rearmed in 1939, and the call up cured unemployment. After the war their industries were able to take advantage of the fact that European industries were destroyed. Roosevelt was a great leader and president, Millipede is not in the same league.

  • shaft120

    If Labour want to introduce nationalisation and socialist protectionism then that’s up to them. But they should have the balls to say so, instead of trying to dress it up in sheeps clothing as ‘xyz capitalism’. You cannot instruct a market from the top down and still call it free. You can steal the language, be it ‘progressive’ be it ‘liberal’ be it ‘capitalism’, but if it contains the same substance then it will have the same outcome. An equal sharing of misery for all.

  • Craig Yates

    Both hate the goyim. That much I’m pretty sure of.

  • the viceroy’s gin

    Yes, today’s progressives would surely love the progressive Theodore Roosevelt, who paved the way for the progressive Woodrow Wilson. Some would call these 2 progressive nutters the 2 most damaging and execrable presidents in US history.

    But they were from 2 “different” political parties, you say? Look closer. A progressive is a progressive is a progressive, then as today, and LibLabCon are all progressive clones today, much as a century ago in America.

  • Peter Stroud

    Ed Miliband is certainly no Teddy Roosevelt; though he has the brains of a Teddy Bear. To suggest that Labour will be suddenly transformed into the Party of competition is laughable. The brothers will never let that happen. The same brothers that ensured Red Ed’s leadership election. The man must be smoking something. We saw what happened in Falkirk; the brothers won, hands down. No: dream on Ed, dream on.

  • Tony_E

    You cannot have effective competition laws at a national level when the power to legislate has been removed to a supranational body whose objective is corporatist in nature.

    Much of the regulation that has been installed on individual trade industrial and service sectors have been applied at the behest of the the larger companies already dominant, to preserve their position.

  • Agrippina

    President Roosvelt was indeed a great man, but I do not see any in his mould anywhere today. He fought corruption in the NY police dept (most corrupt in the country) as the commissioner. He drafted legislation protecting railroad workers who were dying 3/4 per day. He instigated anti-trust laws to break up the monopolies by the likes of JP Morgan, Rockefeller, Carnegie etc, they loathed him, but it meant fair competition and lower fares for the public. He pushed through a shipbuilding prog so that they were well placed for WW11. He pushed through the Panama Canal.

    He was a sickly asthmatic child and grew up to go on long cattle drives in hard cowboy country. Vast areas of USA are protected because he enacted laws to conserve beautiful parks and monuments.

    He was smart enough to surround himself with clever people and push through laws without fear or favour, because it was the right thing to do. The best biogs I have read re: Roosevelt were written by the pullitzer prize winning author Edmund Morris. Roosevelt a great man to emulate but the fools we have, are to busy holding onto power for its sake, rather than looking for the long term future of our country and acting in the best interests of the many, instead of vested interests who give them money and call the shots. You have to have principles and a strategy to be great.

    • Span Ows

      Good comment Agrippina, and as near as Ed Miliband gets to Roosevelt is…well, nothing, nowhere near.

    • telemachus

      “smart enough to surround himself with clever people”
      As is Ed

    • the viceroy’s gin

      For an alternate and less hagiographic view, see here:

    • the viceroy’s gin

      For an alternate and less hagiographic view, see here:

      • Span Ows

        Interesting stuff! Replace Roosevelt and Wilson in the text/script with Obama and it makes almost equal sense.

        • the viceroy’s gin

          Obama is merely following the trail Roosevelt and Wilson first blazed. They were the ones who initiated the income tax, to fund their progressive madness.

          They were the ones who clamored for and prosecuted bloody war adventurism, draining the treasury and filling the cemeteries, creating horrific foreign ties that would ensure such madness was self-perpetuating to this very day.

          They were the ones who created the a-democratic and politically unaccountable Central Bank, and put them in charge of national policy.

          Obama is just an empty suit pipsqueak. His little nonsense would be easily swept aside, if the massive work done by his fellow progressives a century ago hadn’t taken place. Remember, Romney and McCain would have done precisely the same things Obama is doing. Ask them right now, and they’ll tell you, just like they’ve told us previously. They agree with the full progressive agenda.

  • Smithersjones2013

    Lord Wood is minister without portfolio reality in Ed Miliband’s shadow cabinet misfits.

    Two outcomes. HSBC and Barclays up sticks to Singapore with all the fallout that will have or Miliband is just increasing the UK’s carbon footprint.

    Either way there is nothing of benefit for the UK.

  • Colin

    The main thing miliband has in common with Roosevelt, is that, basically, he’s dead.

  • Colonel Mustard

    Once again Labour confuse what they intend with the consequences of what they do. Everything they do is promulgated on the intention of making things better but the consequences invariably make things worse. And since they seem incapable of admitting their errors and always blaming something or someone else for the consequences they are set to continue this pattern. They might be morally high-minded but they are practically incompetent and the only method they seem capable of contemplating is coercive legislation with a barrel load of unintended consequences. They also have a nasty tendency to always believe they know best what is good for us.

    Sadly Cameron seems disposed to the same approach.

    • telemachus

      Back to Makhnovism

  • itdoesntaddup

    Miliband may borrow from Roosevelt’s rhetoric, but the policies he espouses bear no relation to that.

    As Energy Secretary it was he who ordained that the common man should have to pay for expensive green energy, with competition hobbled and banned – and that the regulator should not act in consumer interest, but rather in the interests of the crony greenergy PFI contractors. It was he who demanded that we shut down our economy and export our industry via his infamous Climate Change Act, denying the common man the associated jobs.

    Just as Labour created the Big 6 energy companies in the merger wave of 2002, they also created the banking behemoths via shotgun marriages – it was Brown who demanded that Lloyds acquire HBOS over cocktails. It was not the concentration of retail accounts, but the increase in the balance sheets that created the risk. That too was driven by Brown. It helps to understand the sickness before you prescribe treatment, otherwise you will simply kill the patient.

    • telemachus

      Look son the energy policy was correct for the future of the world and the suggested funding correct for boom times
      The fact that the US blew the economy off course makes it equally correct to rethink the issues

      • itdoesntaddup

        The energy olicy was a disaster even in its own terms. Not only did it make our energy needlessly more expensive, but it led to higher global CO2 emissions. You must be beyond your dotage to think otherwise.

        Brown’s property bubble did not start in America. He grew it personally. It was always the wrong thing to do – borrowing more abroad to fund it.

  • HookesLaw

    No doubt Lord Wood fondly remembers Roosevelt as someone who defected from his party and split the vote to allow in a Democrat Government.

    • southerner

      Ah Wikipedia. Always useful for a quick soundbite.
      Better Teddy Roosevelt than Cameron’s impression of Teddy Heath.

    • Smithersjones2013

      So you associate David Cameron with Roosevelt. I don’t think Dave quite fills his boots but I’m sure Miliband must have toasted Dave with his champagne socialist mates on occasion? Don’t you?

      Don’t be so bitter and twisted……

  • Mark Myword

    It is true that Roosevelt took on the corporate barons of early twentieth century America. However, Roosevelt was aware that poor legislation could make things worse. He said ‘ It is difficult to make our material condition better by the best law, but it is easy enough to ruin it by bad laws’ The great crash happened exactly twenty years after Roosevelt left office .

    • HookesLaw

      It is one thing to praise Roosevelt – who was something of a boy genius – but quite another to compare him with the leaden Miliband. No doubt Lord Wood’s next effort will have Miliband walking on water.

      • Mark Myword

        I think that Miliband is rather disposed towards ‘bad’ legislation of the ‘something must be done’ variety. Another of Roosevelt’s remarks is: ‘A muttonhead, after an education at West Point – or Harvard – is still a muttonhead’ Miliband studied at Harvard I believe.

        • HookesLaw

          And I think Gordon Brown lectures at Harvard.

        • Colonel Mustard

          I think all the party leaders seem disposed towards that. There is a mania for both re-inventing the wheel and churning out copious amounts of bad law to compensate for bad enforcement.

        • Mynydd

          A muttonhead, after commenting on Coffee House, is still a muttonhead.

      • Mynydd

        No one is comparing Mr Miliband with Mr Roosevelt. What Mr Miliband is saying is that we can learn for him.

        • Colonel Mustard

          Oh well, golly gosh, Miliband discovers lessons from the past and now wants to preach to his elders and betters about them. Pity he didn’t learn a few lessons from the rotten past of his own party.

          • Mynydd

            Maybe Mr Cameron with his bed room as learned lessons from your beloved Mrs Thatcher’s poll tax

    • Mynydd

      It’s impossible to take on the corporate barons when they fund your party.

      • HookesLaw

        You mean ‘union barons’.
        Given that business supported the Republicans then your words mean that Wood is talking rubbish.

        • Mynydd

          No I am talking about corporate barons, a small example:
          Hedge Funds £1,384,070
          Financiers £1,305,806
          Fund and Asset Managers £1,158,000
          Banking £607,771
          Industry £913,410
          Scottish Power £14,000 ( Did Scottish Power get approval from the shareholders to make this donation?)
          A full list of donations to fund the Conservative Party can be found on their website

          • Colonel Mustard

            Well at least it’s transparent unlike all the shady deals and fiddles done by the Labour party – Ecclestone anyone? Dodgy dossier? PFI? Did Blair and Brown “take on” the “corporate barons” in 13 years of government with a powerful Commons majority? Er, no. Was Miliband an enthusiastic, greasy pole climbing member of that government? Er, yes.

            You and Labour’s muppet clientele might swallow the risible line that Labour never existed before 2010 and all our current woes are the result of four years of Coalition government but don’t expect to peddle that cack here.

            The really sad thing is that none of the media in this country seem prepared to hold Labour properly to account or tear the ridiculous Miliband a new one. It’s bad enough having to put up with one schoolboy in No.10 – the last thing this country needs is another one.

            • Mynydd

              Are you saying that the donation to the Labour party are not transparent? If you have details of shady deals and fiddles done by the Labour party it is your duty to report them to the proper authorities. Remember PFI scheme were started by the previous Conservative government.

              Comments such as “You and Labour’s muppet clientele” are unbecoming for someone who wants to make a serious contribution to Coffee House.

          • Andy

            Unless you are a shareholder in Scottish Power it is none of your damn business.

  • wycombewanderer

    If the banks aren’t complying with EU competition law then one should ask why the EU isn’t investigating them;

    If they are complying with EU law does Miliband plan to overrule EU law?

    Either way the taxpayer has a mighty legal bill coming to pay for this fool’s grandstanding.

    • HookesLaw

      But good of the Spectator to feed us this turgid Labour propaganda.

      • wycombewanderer

        I think they’re getting worried about constant comparisons to Frankie Hollande!

    • telemachus

      So you are not bothered at the poor service they give to small businesses

      • wycombewanderer

        I’d be more concerned if they were lending recklessly.

        I’d be more concerned if they weren’t getting their liquidity sorted correctly.

        We don’t want another crash like your rancid mob caused in 2008 do WE now?