In three important ways the banking crisis has added to the case for the Left. The first is that it has made it much more difficult for anyone to argue that all regulation, and all government, is merely an impediment to wealth creation and personal freedom. Though few people make this case in its most extreme version, many have the idea as their guiding light. To these people the financial crisis and, in particular, the remedies for it are a ready retort.
There was a strong challenge last week from Samuel Brittan in the Financial Times to what he described as Mervyn King's "characteristic caution" about public debt, noting that levels of public debt as a percentage of GDP were far higher than is currently proposed after five years of Conservative government in 1956. Brittan wrote that:
At the risk of lèse-majesté, I have to say that while there may be a good many reasons to think twice about a further stimulus in the forthcoming UK Budget, the size of budget deficit or the associated national debt is not one of them.
Nothing I have said will convert people who have an instinctive fear of governments getting into debt. Let me therefore cite the distinguished English historian, Lord Macaulay: "At every stage in the growth of that [national] debt the nation has set up the same cry of anguish and despair. At every stage in the growth of that debt it has been seriously asserted by wise men that bankruptcy and ruin were at hand. Yet still the debt kept on growing; and still bankruptcy and ruin were as remote as ever." Harold Macmillan, as chancellor of the exchequer, quoted Macaulay in his 1956 Budget speech and remarked how the national debt had risen from £6bn in 1914 to £27bn in 1956, representing 27 and 146 per cent of gross domestic product respectively - about twice what is now in prospect. Yet these percentages were reduced in the postwar phase without any heroic reserve or "sinking" funds, through the simple forces of economic growth and inflation creeping at a rate not much above current inflation targets.
David Cameron may claim the mantle of progressive Conservatism but, in practice, he rejects the progressive Conservative tradition of Harold Macmillan in which David Marquand places Cameron. Though David Willetts and others talk of the need to rediscover pre-Thatcherite conservative traditions, that would require a willingness to take on the certainties of a post-Thatcherite party.
In this crisis, the British right has moved to the right, against the trend of governments of both the centre-left and the centre-right in power.