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Free markets need defending. Meet CapX

28 January 2015

6:37 PM

28 January 2015

6:37 PM

With The Spectator and Coffee House you are already used to getting the very best gossip and news. Can I interest you in the perfect accompaniment?It is a new service called CapX. I’m its editor and we have been trialling the site since last summer. The new version, looking rather nice we hope, launched today. Fraser Nelson, the editor of The Spectator, kindly thought that readers of Coffee House might like to be introduced to what we’re doing.

Our editors based in London scour tens of thousands of sources such as blogs, academic research and newspapers around the world to locate smart stories on markets, politics, economics and ideas. We also commission our own exclusive pieces from writers in many countries. I’m delighted that Dan Hannan is a columnist for us and Tim Montgomerie has written for CapX along with many other great writers. There will be more to come.

The service is free and owned by the Centre for Policy Studies. You can view the website at www.capx.co and every weekday we send out a short email containing our five best stories of the day. You can sign up for it here. The focus is international.

So what are we trying to achieve with CapX? As well as saving you time, by locating great writing from around the world, we have been established to defend free markets and competition. It is not just that there is a threat from the resurgent Left and understandable voter discontent after the financial crisis. Crony capitalism (excessive closeness between government and monopolistic business interests) is also a serious problem.

Adam Smith was famously on the money about such cartels, and much else besides. The father of economics wrote that:

‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice.’


But if such gatherings are impossible to prevent, how is a conspiracy against the public to be avoided? The answer – as Smith understood – was the power of competition in open markets.

Indeed, when competition is combined with the rule of law, robust institutions and free trade, it is remarkable what humans can achieve in terms of economic progress and increased prosperity. It was what put the fuel in the tank of western civilisation; what industrialised the economy raising many millions out of poverty; what created the wealth that funded the expansion of education, health care and scientific research; and what is now extending opportunity in the developing world.

The process was not, is not and can never be perfect, because nothing involving human beings is perfectible. What is clear is that the alternatives which have been tried involve tyranny at worst and inefficient big government micromanagement at best.

This is not, it has to be said, a fashionable view right now. Since the financial crisis, and assorted other setbacks which amount to a crisis of the elites in Western Europe, the view that markets and competition serve only a small number at the top has become widespread. The far Left is resurgent in parts of Europe and in power in Greece. France and Italy are in the mire and in desperate need of free market reform. And even in the US, no sooner has the economy started to grow strongly than President Obama wants to increase taxes and expand the role of government further. I haven’t even mentioned Thomas Piketty. Plainly, free markets are under attack and need defending.

Which brings me back to CapX. I doubt you’ll agree with everything on the site. And that’s the point. Not just because we hope that those who are unconvinced by the benefits of competition will read the site and have their view challenged or changed. Indeed, we hope readers will enjoy the writing and find the research useful no matter what their position.

But those with capitalist and pro-market views don’t agree on everything either. Often, we have trouble deciding on the best word to describe what it is we think. Some find the word capitalism off-putting, while others think the term free market has laissez faire connotations implying the ethics of the wild west. Some are concerned about crony capitalism (I certainly am) while others think such worries overdone. Incidentally, at CapX we’ve opted not to run away from the capitalism word. The enemies of markets will use it anyway and there is no point cowering. So we are for Popular Capitalism and for what the academic Luigi Zingales terms ‘Capitalism for the People’.

It means that we are broad-based. We’re publishing pieces from the libertarian end of the spectrum and articles from conservatives who are most certainly not libertarians. There are pro-market people who want the banks broken up and others who think the bashing of banks has gone way too far. There are those who think ethical concerns are over-rated, and impossible to resolve other than by the application of the law. Critics of that approach regard reliance on the law as insufficient. They see an ethical overhaul of capitalism as overdue and essential if voters are to be persuaded of the merits of markets.

Such tensions in the pro-market camp are not going to be resolved any time soon. Ultimately, what matters is that those who believe in defending and promoting genuine competition, the rule of law and free trade, as the route to prosperity for the many, can discuss these themes in a civilised, informative and entertaining way that helps make the case for markets as the engine of innovation and widening prosperity. CapX is our contribution to the debate.


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