Good riddance to the Free Market, says Andy Burnham

But its real opponent was not socialism but something closer to “the politics of the common good” – a capitalism directed towards socially beneficial purposes rather than solely towards profit. The leading exponent of this, as Burnham knows, is Catholic Social Teaching (CST). He has said it is the foundation of his own political philosophy.

Catholic teaching rejects the idea that economies function best with minimum state intervention. It disputes the argument, taken from Adam Smith’s The Wealth of Nations, that if businesses pursue only their own interests then, “as if by an invisible hand”, society as a whole benefits. This is also known as “trickle-down theory”. The nemesis of free market economics was the financial crash of 2008, when an unregulated stock and share bubble burst at a cost to the world economy measured in many trillions of dollars.

Globalisation – the goal of making the whole world one huge free market – was a fruit of neo-liberalism. So was Thatcher’s pursuit of de-industrialisation and a switch to financial services as the main engine of the British economy.

And so was the privatisation of publicly owned industries and services. These are now caught in Burnham’s headlights for reform, especially water and energy utilities and the railways. Neo-liberalism’s flaws are now widely accepted, except for dogmatists of the economic hard right. Yet the Conservative Party and Reform UK both seem uncertain whether they still favour neo-liberalism or not. They risk being left behind.

The CST position on capitalism originated in the papal encyclical Rerum Novarum of 1891 and is most recently expressed in the present Pope’s Magnifica Humanitas. It spells out how the goal of profitability needs to be aligned with the interests of the whole community. This could include public investment, changes to planning laws and subsidies to enable businesses to be successful. These same principles would require a closer look at corporate governance; they might also need trade unions to curb their instinct for confrontation, again in the name of the common good.

More fundamentally, however, the idea that an “invisible hand” rewards the single-minded pursuit of self-interest has spread from company boardrooms to society in general, fostering extreme individualism and undermining a sense of social responsibility. Replacing neo-liberalism with a realistic political, economic and social agenda rooted in furthering the common good is a hugely ambitious agenda. The country certainly needs it. But is the country ready for it?