The question is not whether the state picks losers, but whether government failure is better – or worse – than the market failure it seeks to correct
Richard Nixon, a Republican president, apparently declared in 1971 that “we are all Keynesians now”. Mr Nixon seemed to admit that a serious shift in thought on the right of politics had occurred. But the decades of Thatcherism and Reaganism proved it to be a rhetorical move, not an ideological one. Rishi Sunak, the Conservative chancellor, attempted the same sleight of hand in last week’s budget.
Mr Sunak unveiled a national infrastructure bank and a strategy to tilt spending towards the north. He also repeated his March promise of £100bn in public investment. While the money, reorientation and the institution are welcome, they are less substantial and radical in scope than that prescribed by mainstream economics. This will lead to predictably poor outcomes for employment and GDP in the UK.