Market fundamentalism? It’s dead meat

Why is the horsemeat saga continuing to dominate the news?

It was the question posed by Peter Oborne in his introduction to yesterday’s edition of BBC Radio 4’s Week in Westminster:

There’s nothing like a story about dumb animals to bring out the most atavistic and juvenile instincts of your average British newspaper reporter. Few stories in living memory have been less significant than the Great Horseflesh Scandal. Nobody has been killed and and there’s no evidence anyone’s health has been put at risk. Not since rival teams of crack reporters from the Sun, Star and Daily Mirror raced around southern Spain on the trail of Blackie the donkey in the early 1980s has a story counted for much less. Yet very rarely since Blackie the donkey has a story been awarded more airtime. Such are the mysteries of modern media and political discourse.

In a sense, Oborne is right. There are no dead or wounded. Nevertheless, the story has touched a raw nerve and the media are not entirely to blame for the continuing public interest.

The reason for enduring public concern is that the horsemeat scandal symbolises a much deeper problem, which is explored in two articles in today’s Observer. Will Hutton sees the horsemeat scandal as a final denouement for Thatcherite values:

The collapse of a belief system paralyses and terrifies in equal measure. Certainties are exploded. A reliable compass for action suddenly becomes inoperable. Everything you once thought solid vaporises.

Owen Paterson, secretary of state for the environment, food and rural affairs, is living through such a nightmare and is utterly lost. All his once confident beliefs are being shredded. As the horsemeat saga unfolds, it becomes more obvious by the day that those Thatcherite verities – that the market is unalloyed magic, that business must always be unshackled from “wealth-destroying” regulation, that the state must be shrunk, that the EU is a needless collectivist project from which Britain must urgently declare independence – are wrong.

Indeed, to save his career and his party’s sinking reputation, he has to reverse his position on every one. The only question is whether he is sufficiently adroit to make the change.

Paterson is one of the Tories who joyfully shared the scorched earth months of the summer of 2010 when war was declared on quangos and the bloated, as they saw it, “Brownian” state. The Food Standards Agency was a natural candidate for dismemberment. Of course an integrated agency inspecting, advising and enforcing food safety and hygiene should be broken up. As an effective regulator, it was disliked by “wealth-generating” supermarkets and food companies. Its 1,700 inspectors were agents of the state terrifying honest-to-God entrepreneurs with unannounced spot checks and enforced “gold-plated” food labelling. Regulation should be “light touch”.

No Tory would say that now, not even Paterson, one of the less sharp knives in the political drawer. He runs the ministry that took over the FSA’s inspecting function at the same time as it was reeling from massive budget cuts, which he also joyfully cheered on. He finds himself with no answer to the charge that his hollowed-out department, a gutted FSA with 800 fewer inspectors and eviscerated local government were and are incapable of ensuring public health.

Hutton points out that a strong FSA, far from being a regulatory burden, would have given British enterprise a competitive advantage:

What the Paterson worldview has never understood is that effective regulation is a source of competitive advantage. If Britain had a tough Food Standards Agency, it would become a gold standard for food quality, labelling and hygiene. British supermarkets and food companies could become known for their quality at home and abroad, rather as “over-regulated” German car companies are, rather than first suspects when something dodgy is going on.

In a companion piece, Jay Rayner points to the “thuggish” behaviour of the big supermarkets:

The horsemeat scandal is not some isolated incident. It is a symptom of a much bigger disease affecting mass food retailing in Britain. (Last year’s row over falling payments to dairy farmers was another.) It is about the way British supermarkets have singularly failed to react to the vast changes to the global food market that they assumed was theirs to plunder by right.

Ever since the banking crisis of 2007/8, it has been obvious that the dominant economic orthodoxy of the past thirty years is a busted flush. And now we have yet more proof of its moral and practical failure.

There is no future in the fundamentalist ideology that elevated markets from a mechanism to a value and, moreover, a value that trumped all other values. The small minority in the Liberal Democrats who continue to seek to push the party further in that direction must be barking mad.