John Maynard Keynes, arguably the leading visionary of modern economics, advocated an interventionist policy whereby governments would use fiscal and monetary measures to mitigate the adverse effects of recessions, among other things.
Interestingly, I have read somewhere that economic interventionism is also advocated by fascist, nationalist and extreme right-wing parties, with their thinking being that the free market could damage national traditions, social order or even the authority of the state.
We all know the Labour government has indeed followed the textbook route of Keynesian intervention by attempting to increase the money supply through a rapid reduction in interest rates along with quantitative easing measures.
Some commentators suggest that the outcome of interventionist policy is bound to be totalitarian rule whereby the state recognises no limits to its authority and strives to regulate every aspect of public and private life.
Of course, I’m not seriously suggesting that Labour has any such totalitarian plans but I’m not so sure about the organisation that dominates our working lives to an increasing degree. Yes, I am referring to the Financial Services Authority.
I make this point as the catalogue of FSA interventionist action continues and plans are announced for the regulator to get tough on the sale of risky financial products to better protect consumers.
Also, the FSA’s budget for 2010/11 is to rise 18.3% to £491m, up from £415m last year, amid warnings from its chief executive Hector Sants that a more intrusive regulator will cost more.
So as we move from the unreasonable to the ridiculous and the mist begins to clear might I suggest that the pressing question is – who is regulating the regulator? And what will happen if its enthusiasm is not curbed?