We also featured former Chief Secretary to the Treasury Steve Barclay with an insider’s perspective on how Keir Starmer could choose to fill the gap in defence spending without raising taxes – if he had the political will.

John Wills offered a bold plan to fix social housing that would go further than the Thatcher-era Right To Buy programme and literally give council homes away. It would still end up costing us less than the current system.

Elsewhere this week: Alan Hibben on the tribunal trap; Tom Willerton-Gartside from Looking for Growth on their new Bill to stop Net Zero costing you a fortune; John Penrose on devolution’s dirty secret; James Price channels Stalin on drone warfare; and Stephen Pollard on the real reason the Left don’t want Palantir to save the NHS.

Marc Sidwell
Editor, CapX

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Andy Burnham is coming for Downing Street. Be afraid

Gawain Towler

The numbers are not in dispute, whatever the spin. Andy Burnham took Makerfield with 54.8% of the vote and a majority of 9,231, on a turnout of 58.7%, the highest at any parliamentary by-election in almost seven years. Labour’s lead over Reform UK, 13 points at the general election, widened to 20. A seat Reform had swept only weeks before, taking all eight of its wards in the May locals on close to half the vote, delivered a thumping Labour win. So what happened?

The first answer is the simplest, and the one Reform will least want to hear. It was Andy. Not Labour, Andy. He fought the seat as a Christian name, ‘Andy, For Us’, complete with cartoon, Oasis track and the now-celebrated running shorts, and his canvassers were perfectly open on the doorstep that a vote for him was a vote to be rid of Keir Starmer. That is a remarkable thing for a Labour candidate to say about a Labour prime minister. It worked, because Burnham holds the one asset almost nobody else on his side still owns: he is a Labour man untainted. He spent the wreckage of the last two years in Manchester rather than the Cabinet, and the failures of a decade of opposition belong to other people. He is the King of the North precisely because he has never had to run the country.

Which gives the campaign its central irony. Burnham’s explicit pitch was to remove the Prime Minister; Reform’s entire effort went into stopping Burnham; and so Reform, a month after winning every ward in the seat by promising to throw the Government out, spent June implicitly working to keep Starmer in. The appetite for change had not faded. It had simply found a more plausible vehicle. That is the messenger problem in its purest form. The same message that carried Reform in May carried Burnham in June, because in a straight fight for the anti-Westminster vote, the King of the North will beat a local plumber with a difficult social media history every time.

And this is the part that should trouble Reform more than the scoreline. They did not lose for want of effort; by every account the ground game was relentless. They lost for want of preparation and data. Simons’s resignation was choreographed weeks in advance, which meant Burnham entered the short campaign with his voter identification done, his targets mapped and his machine already warm. Reform arrived with all the enthusiasm of the council sweep and none of the infrastructure beneath it. Enthusiasm wins wards. It does not, by itself, win a parliamentary seat against a professional operation with a head start.

Two things finished the job. The first was a disciplined social-media operation by Labour and the wider Left aimed squarely at women, and it told: Reform-leaning female voters peeled away, scarcely helped by a Reform candidate whose unearthed posts about women had become a national story. The second was the now-familiar sight of the Left coalescing, exactly as it did in Gorton and Denton. The Greens quietly scaled back to give Burnham clear water, the Liberal Democrats were crushed to 163 votes. The Conservatives, too, all but disappeared, every tactical instinct in the seat pointing the same way.

Then there was Restore. Rupert Lowe’s new outfit, slick on Musk’s X and cheered on by the owner himself, took 6.8% and, more damagingly, took Reform’s eye off the ball. Much of Reform’s closing energy went not on Burnham but on a war on its own flank, leafleting that Restore ‘can’t win here’ and briefing against it in public. Reform and Restore between them polled 41.3%. Divided, it bought them nothing. The Right did not lose Makerfield for lack of votes. Well it did, but it also lost because it spent the final week shooting at itself.

What should worry CapX readers, though, is less the autopsy than the prospectus. Burnham now has his seat and, with it, a live run at Number 10. Look at what he is actually offering. He insists he will keep Rachel Reeves’s fiscal rules, which means the arithmetic does not move. Burnham may, like a certain kind of politician, profess not to care about the bond market. The bond market, unfortunately, cares a great deal about him. Denied the room to buy off the Left with money, he will buy it off with culture instead.

Expect, then, two years of red meat hurled to the hard-left benches: partly to placate MPs spoiling for a fight, partly to recover the Green defectors at a moment when the Greens look to be busily eating themselves. The tells are already there. A Government in this position supports assisted dying. It reaches for ever-tighter control of the internet in the name of safety. It hunts the cheap and divisive win because the expensive and unifying one, growth, is off the table. The danger of a Burnham premiership is not that it would be radical on the economy. It is that, barred from being radical on the economy, it would be radical on everything else.

Reform will tell itself Makerfield was a candidate problem. In part, it was. But the deeper lesson is the one the Right keeps declining to learn: enthusiasm is not organisation, and a movement that cannot count its own voters, or stop fighting itself, will go on handing seats to the best-prepared man in the room. On Thursday that man was Andy Burnham. We may all live to regret how good he is at this.

And if you want more…

– What Clarkson’s Farm reveals about rural Britain (Arthur Reynolds)

– Labour fail the defence test (Eliot Wilson)

– AI could fix policing. Politicians won’t let it (Ian Acheson)

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We’ll be back on Monday.

With Andy Burnham romping home in the Makerfield by-election (much more below), Keir Starmer has had good news and bad news: the good news is that his party can beat Reform UK – but only by promising to kick him out of office.

Burnham celebrated by saying his win was the ‘last chance’ to change the country, and vowed to lay out ‘a new path for Britain’. Since that path included an end to ‘trickle-down economics’, keep tight hold of your valuables.

How long can Starmer cling on? This afternoon, several Cabinet members have apparently told him his time is up. They join 100 Labour MPs who have broken ranks publicly. But the man himself is still vowing to fight the former Mayor of Manchester to the bitter end. We’ll be here for it. Bring popcorn.

Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.

Marc Sidwell
Editor, CapX

Today’s Takes

Fresh thinking from CapX

Andy Burnham is coming for Downing Street. Be afraid

Gawain Towler

‘The danger of a Burnham premiership is not that it would be radical on the economy. It is that, barred from being radical on the economy, it would be radical on everything else.’

For now, Andy Burnham is untainted by Labour’s dismal record over the last two years. But winning the anti-Westminster vote is easier than governing. If he makes it to No.10, Burnham will face the same fiscal constraints – and the red meat he will be forced to throw to his angry backbenchers will come at the country’s expense. Read More

Bikes or bullets?

Steve Barclay

‘As first Lord of the Treasury, the Prime Minister does not need the Chancellor or Chief Secretary’s consent.’

It’s not the Treasury that’s unwilling to fund defence – it’s the Prime Minister. A former Chief Secretary to the Treasury says the money can be found without new debt or tax rises, and from more politically palatable sources than welfare, like funding for bike lanes and heat pumps. Changes to four projects could plug the £4.5 billion gap – and give Keir Starmer some ammunition when phoning his backbenchers. Read More

Devolution's dirty secret

John Penrose

‘Regional mayors and devolved First Ministers never have to face the music for the taxes that raise the cash they’re throwing about.’

The ‘Burnham effect’ that propelled Labour to victory in Makerfield is only the latest example of regional leaders who are miles more popular than their opposite numbers in Westminster. It’s a phenomenon that exposes a fundamental flaw in Tony Blair’s devolution settlement. Time to finish the job. Read More

Stat of the day

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Aberdeen South was a victory for energy security

Georgiana Bristol, ConservativeHome

‘When I was in Aberdeen last month, a taxi driver – always a reliable indicator of public opinion – told me, “I’ve never voted Conservative – and I hate the Conservatives – but this time they’ve got my vote”.’

You’d be forgiven for not knowing that, 333 miles north of Makerfield, another by-election was taking place. Last night, the Conservatives retook Aberdeen South. It would be a mistake to call this the first harbinger of a Conservative comeback – but it was a remarkable victory, most of all for Britain’s oil and gas industry. Read More

Don't blame Brexit for Britain's economic woes

Gerard Lyons, The Telegraph 🔒

‘The fundamental causes of Britain’s weak economic performance long predate Brexit and remain within our power to fix.’

Labour want Britain to align more closely with the EU, becoming a rule-taker across a range of areas. A new report for the Centre for Policy Studies shows that this approach risks distracting from the pro-growth agenda we need at best – and actively blocking policies that could raise growth at worst. Read More

We're measuring carbon emissions in the wrong way

David Lawrence and Pedro Serôdio

The Progress Post

The way the UK counts carbon is bad for the climate and for growth

This is Post Haste, our home for swift thoughts, responsive takes, and first attempts at solving problems. Want to write for us? Email editor@britishprogress.org…

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2 days ago · 7 likes · 1 comment · Centre for British Progress, David Lawrence, and Pedro Serôdio

The Capitalist: The battle for Brexit isn’t over

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And if you want more...

– Fifa was right about ticket pricing (Bloomberg)

– Why Victorian houses are so much cooler (The Conversation)

– How good is your mini golf? (Putt.day)

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We'll be back on Sunday with the Weekly Briefing.

The current Government continues for now, although who knows what happens tomorrow once the result comes in. Keir Starmer’s administration confirmed today it is still ‘strongly minded’ to nationalise British Steel. That’s a mistake. As are its impending steel tariffs.

In other news, the Conservatives announced some bold plans to dial back regulation on the City (see below). Of course, first they need a few more MPs, and they might even be in for a surprise victory tonight. No, not that one.

Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.

Marc Sidwell
Editor, CapX

Today’s Takes

Fresh thinking from CapX

Employment tribunals are strangling British growth

Alan Hibben

‘When the most rational use of scarce managerial and professional time is to minimise exposure to a proliferating network of potentially ruinous hearings, it is hardly surprising that investment and innovation look weak.’

Britain has built a tribunal system so sprawling and risk-free that it now consumes the very people who should be running productive companies. A quick, supposedly low-cost alternative to the courts has become a bureaucratic trap. A new paper from the Centre for Policy Studies argues that a country that spends this much time litigating the past should not be surprised that it struggles to build the future. Read More

The nanny state doesn't care about your facts

Christopher Snowdon

‘The media were far more interested in reporting Jamie Oliver’s opinions of the sugar tax than in covering the academic evidence.’

A new book, ‘Inside the Sausage Factory’, examines four public health campaigns. They all failed, and it turns out that the evidence for them wasn’t very good, but that isn’t really the point. A bad policy introduced on the basis of poor evidence is still an evidence-based policy. The real question is whether the policies were evidence-based at all. Read More

More spending won't fix Britain's defence

James Price

‘Funnelling more money through a broken pipe just means more waste.’

The defence sector is never going to be a pure free market. Technically it is a monopsony: a sector with a single buyer. Aside from the handful of libertarians who believe in recreational nukes on principle, no one cavils at this. But some therefore say that there can be no market forces involved in the process. This is, to use an untechnical term, total rot. Read More

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Will Makerfield unite the Right?

Oliver Dean, ConservativeHome

‘In Makerfield, an insurgent Restore Party may well hand Burnham an easy win. In Aberdeen South, the dynamic is rather similar, with Reform poised to take enough votes from the Tories that the SNP secure re-election.’

When the Right splits, it is the Left that wins. But after Makerfield, should right-of-centre parties do a deal? A united Right may well prevent a progressive coalition being handed the keys to No.10 in 2029. It may also, in the process, end the Conservative Party as a serious political force. Read More

Let's slash the regulations holding the City back

Andrew Griffith, City AM

‘In the 1980s, the City had one person working in regulation for every 11,000 working in the financial sector; today it has one for every 75.’

Anyone who worked in the City in the 1990s knows what it felt like to work at the world’s greatest intersection of capital and private enterprise. Not any more. Despite its vitality, storied history and deep strengths, Britain’s financial services industry is in trouble. It’s time for a fightback. Read More

Let regions keep what they earn

Alex Walker

Re:State

The fiscal devolution theory of everything

Today, Re:State publishes ‘Taxing for take-off’, a major new report setting out a blueprint for fiscal devolution in England…

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3 days ago · 4 likes · Re:State and Alex Walker

The Capitalist: The battle for Brexit isn’t over

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And if you want more...

– How smashing NIMBYs created modern capitalism (Works in Progress)

– Iran: The art of a bad deal (Engelsberg Ideas)

– America doesn’t need a new East India Company (The Daily Economy)

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Burnham’s camp promptly threw the offer back in the Prime Minister’s face. One cruel but accurate ally of the Manchester Mayor put it plainly: ‘The benefit Andy has is the wind of change for not having been associated with the Government’s failings’.

The Burnhamites are demanding Starmer surrender to the King of the North without a fight. Starmer, for now, isn’t playing along.

Still, proof elsewhere today that politicians can find common cause when they choose: there seems to be a stay of execution for the ponies of Dartmoor.

Who knew it was so easy to put Natural England back in its box? Now do bat tunnels.

Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.

Marc Sidwell
Editor, CapX

Today’s Takes

Fresh thinking from CapX

Why we should give council houses away

John Wills

‘Social housing provides a facsimile of the security that ownership creates: it is missing the foundational feature that makes ownership transformative across generations.’

The UK is about to spend £39 billion on social housing. Andy Burnham wants to spend even more. But what if the entire model is wrong? Learning from Thatcher’s Right To Buy and turning tenants into owners would cost the state less, not more, than the current model. Read More

Let the police use AI

Ian Acheson

‘AI is neither a silver bullet nor a dystopian inevitability.’

Properly governed AI offers one of the few realistic ways to square the circle of constrained budgets, rising demand and public expectations for visible neighbourhood policing. Studies suggest it could cut crime by 30-40%. But that opportunity can easily be lost to political grandstanding. Read More

The Capitalist

Ten years ago, Matthew Elliott ran the campaign that changed Britain forever. As the architect of Vote Leave, he helped deliver a result that almost nobody – including many on his own side – genuinely believed would happen.

A decade on, with some senior Labour figures openly discussing a return to the EU, Lord Elliott joins Marc Sidwell to look back at how Brexit was really won, and to make the case for why the battle isn’t over yet.

The CapX Reading List

The best of the web today

Sickness benefits have gone badly wrong

Helen Whately, The Telegraph 🔒

‘People want help to be there for the sickest in our society – but they don’t want to see their taxes propping up a lifestyle they can’t afford themselves.’

Our welfare system was designed with the best of intentions, but it is not up to the job. We are parking people on welfare and running up a bill we cannot afford. This has to change. A root and branch review of sickness benefits will look to rip up the system and build something better. Read More

Fix equality law or your business will be Next

Joseph Dinnage, City AM

‘The Equality Act was used to put the retailer Next on the hook for millions over spurious equal pay claims.’

The road to hell is paved with good intentions. Rather than simplifying our legislative landscape, the Equality Act has complicated our understanding of the law, undermined traditional legal principles, wreaked havoc in the workplace and distorted the free market. Read More

Can we put data centres in orbit?

Kai, Tech Economics

Tech Economics

The Orbital Economy Just Opened for Business

The cost curve of getting to space has collapsed so dramatically that two ideas once considered pure science fiction — manufacturing in zero gravity and putting data centers in orbit — are now entering the realm of serious economic analysis…

Read more

5 days ago · Kai (Tech Economics)

Stat of the day

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And if you want more...

– The race to mine the ocean floor (Arena)

– AI is more persuasive than you are (X)

– What makes a Venus fly trap snap? (Reuters)

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A decade on, with some senior Labour figures openly discussing a return to the EU, Lord Elliott joins The Capitalist to look back at how Brexit was really won, and to make the case for why the battle isn’t over yet. He draws on his new book, ‘Ten Years On: The Untold Story of Brexit’, to reveal what really happened inside the campaign – and why he believes the argument for British independence remains as urgent as ever.

Below, you’ll find a short excerpt from our conversation.

Marc Sidwell
Editor, CapX

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Was it a shock to you when David Cameron resigned after the Brexit vote?

We’d sort of convinced ourselves that he wouldn’t resign, whatever the result.

And certainly that very week. I know that with some of the key Conservative players on the campaign, at least Michael Gove, Boris Johnson, they were very concerned about Cameron resigning.

And there was also talk about letters from Remain MPs and Leave MPs saying that Cameron should stay on. And that was a big topic of conversation.

I think realistically, had we thought about it with a cold towel on our heads, we’d have realised that perhaps he was going to resign having committed so heavily to the referendum.

Has Brexit delivered?

Brexit was all about taking back control.

And once control was back in the UK, it’s really up to UK parliamentarians and voters to decide what happens.

Some things I like.

So, for example, if there’s deregulation in certain areas, it helps free up the economy. And I think the tech regulation, for example, at the moment with AI, that’s really helped us thrive.

Some things I really detest.

So for example, the VAT on school fees, that wouldn’t be possible were we to be back in the single market.

So I hate the fact that’s happened, but you’ve got to accept as a Brexiteer that it’s all about UK politicians making UK laws.

What should we be doing to make the most of Brexit?

We need to be going for growth – and of course the Labour Party talked about it to death before the last election, and sadly didn’t deliver. But really at its core that’s what the British people want.

We’re in a situation where we’re doing minusculely better than France, Germany, Italy – so we’ve outperformed them, but we’re still at historically low levels of growth compared to before the financial crisis, for example.

And if we carry on on the current trajectory, we’re going to slip behind Poland very soon in terms of GDP per capita, and behind Turkey by 2043.

So that’s the trajectory we’re on as a country. We need to reverse that.

The solutions are out there. And they’re the same solutions that the Centre for Policy Studies talked about and championed in the 1970s and 1980s: lower taxes, lighter government spending, smarter regulation, free trade, sound monetary policy. It’s the very same solution we need to do now in order to get back to growth

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Today’s political drama featured Wes Streeting laying out his vision for ‘progressive capitalism’. At least he’s willing to say the C-word. He even had a few kind words for Nigel Lawson. But Streeting also warned that a Labour leadership contest could become ‘a Dutch auction of the most expensive and popular pledges to appeal to the party faithful’. Politics as usual, then.

Meanwhile, Keir Starmer is still refusing to concede, either to Streeting or the frontrunner to replace him, Andy Burnham. Today, the Prime Minister was playing hardball: not only announcing that there would be no extra money for the Defence Investment Plan – as predicted in CapX yesterday – but apparently signing off on Natural England’s death sentence for most of Dartmoor’s ponies (see today’s Stat of the Day).

Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.

Marc Sidwell
Editor, CapX

Today’s Takes

Fresh thinking from CapX

What Clarkson’s Farm reveals about rural Britain

Arthur Reynolds

‘The average profit on a pint is just 12p. On that margin, Jeremy Clarkson’s pub would need to sell more than 13,000 pints a day to cover the cost of running its car park.’

‘Clarkson’s Farm’ is back for another season, and so is the battle between Jeremy Clarkson and West Oxfordshire bureaucrats. But the red tape crushing rural enterprise isn’t just great TV. The countryside is awash with entrepreneurial spirit – the system just keeps getting in the way. Read More

Net Zero is costing you a fortune

Tom Willerton-Gartside

‘The Department for Energy Security and Net Zero has been turned into a second Treasury.’

A century ago, incremental changes weren’t enough, so MPs passed the transformative Electricity Supply Act. Today, with the costs of Net Zero punishing households and the wider economy, the same logic applies. A new Bill sets out the radical action Britain’s energy system needs. Read More

Stat of the Day

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Two-tier taxes won't get Britain working

Joanna Marchong, City AM

‘Employer National Insurance is a tax on employment, full stop. The answer is to cut it for everyone, not to means-test it by nationality.’

Reform UK has made a significant error with its latest policy announcement, which promises to reverse Labour’s increase in Employer National Insurance for British workers only. The real question was never who gets hired – it’s why there aren’t enough jobs, and how you make more. Read More

Can Andy Burnham pass the Thames Water test?

Matthew Lynn, The Spectator

‘With a more left-wing prime minister in No. 10, investors are going to be even less keen than they already are to put money into British infrastructure.’

The Government today rejected a private sector rescue for Thames Water, moving it a step closer to state ownership. Andy Burnham believes utilities should be in public hands. But who’s going to pay for it? If Burnham becomes prime minister, this could be his administration’s first big crisis. Read More

The loophole that built Britain

Benedict Springbett

Benedict’s Substack

How trust funds made the modern world

Trust funds do not have a good reputation. The ‘trust fund baby’ is the child of a wealthy family whose lavish lifestyle is funded by their parents’ money. As well as the super-wealthy, trusts are associated with tax avoidance, offshore financial centres, and shadowy, complex chains of ownership of assets…

Read more

5 days ago · 5 likes · Benedict Springbett

The Capitalist

Keir Starmer is giving tech companies three months to activate on-device content scanning and age verification across all smartphones and tablets sold in Britain in the name of child safety. The proposal has drawn fierce criticism from privacy advocates. The messaging app Signal has already said it will not comply – will others follow?

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– Labour say care homes are profiteering. Really? (CapX Archive)

– The robot that puts a spring in your step (PC Mag)

– Manchesterism: is it really working? (Notes on Growth)

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Independent economist Damian Pudner argues that the Government is running out of options quicker than many believe. Rachel Reeves can continue hoping for growth, or raise taxes or spend less. She and her colleagues aren’t doing much more than talk about the first, they’re running out of room on the second, and they will not discuss the third. That, Pudner concludes, is how you end up with the IMF knocking on the door.

Each week we bring you Despatch – an example of the best writing from CapX, read aloud. For hosted conversations, listen to The Capitalist, every Wednesday.

Here in the UK, the Government is in talks with the Trump administration about restoring access to the frontier AI model Fable, which was banned for non-US citizens at the weekend over national security concerns. But Keir Starmer also announced his own technology crackdown: a ban on social media for under-16s. As discussed on last week’s episode of The Capitalist (see below), it will also have the side-effect of age-gating the internet for the rest of us.

Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.

Marc Sidwell
Editor, CapX

Today’s Takes

Fresh thinking from CapX

What have the Left got against Palantir?

Stephen Pollard

‘Given the huge and obvious benefits Palantir brings, you will doubtless wonder what lies behind this hatred of the company.’

Palantir’s software is cutting NHS waiting lists, putting more police on the beat and reducing crime. But instead of thanking our lucky stars that it exists, the data analytics firm has become the latest bogeyman for the Left. Why? Because Palantir is involved in Israel and, as such, is toxic to a mindset that increasingly dominates progressive politics. Read More

Labour fail the defence test

Eliot Wilson

‘To imagine Dan Jarvis’s arrival will make Rachel Reeves suddenly yield up billions of pounds is for the birds’

Amid all the political excitement around John Healey’s resignation, it is easy to miss that a new Defence Secretary changes nothing. Even if the Government doubled its planned increase in funding for our Armed Forces, it wouldn’t fill the funding gap between now and 2030. Labour have ducked the hard decisions needed to put the UK on a trajectory towards readiness for conflict. Read More

Stat of the Day

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The best of the web today

Labour's Brexit 'reset' is a mistake

Peter Lilley, The Spectator

‘Why are Peter Kyle and – to be fair – most of the political class unaware of the failure of Europe’s single market to live up to expectations?’

The Business and Trade Secretary has justified the Government’s proposed EU ‘reset’ by claiming that ‘the single market is where the magic happens’. Yet during our 28-year membership, British goods exports to the EU grew by less than 1% a year. Labour should have examined past performance before pursuing a bad deal based on blind faith. Read More

Hey, Starmer, leave those kids alone

Christopher Snowdon, The Critic

‘I, too, miss the days when 14-year-olds spent their summer holidays playing video games and their time after school drinking cider and setting off fireworks.’

We will continue to regress as a society until we learn to judge new legislation by its likely consequences rather than by the intentions of its advocates. The looming ban on under-16s having access to platforms ‘whose purpose is to enable social interaction and which allow users to post material’ has all the hallmarks of another government failure. Read More

A plan to fix Britain’s Energy Emergency

Will Hodson

radical honesty

The LFG Emergency Energy Bill

SAVE US…

Read more

3 days ago · 4 likes · Radical Honesty

The Capitalist

Keir Starmer is giving tech companies three months to activate on-device content scanning and age verification across all smartphones and tablets sold in Britain in the name of child safety. The proposal has drawn fierce criticism from privacy advocates. The messaging app Signal has already said it will not comply – will others follow?

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And if you want more...

– Ed Conway: The tiny light that changed everything (Stuff Matters)

– Who is the king of political TikTok? (The Knox Index)

– Protectionism isn’t the answer to AI policy (Silicon Continent)

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It makes a good counterpoint to the week’s domestic politics, in which Andy ‘business-friendly socialism’ Burnham and his campaign in the Makerfield by-election continued to loom large. In this week’s Nimby Watch, James Ball catches the Labour leadership frontrunner running against his own pro-housebuilding record.

This week we also said goodbye to deputy editor Joseph Dinnage, who signed off with a column on why our politicians are still refusing to make the hard choices that would get Britain growing. Joe will continue to write for us, so you can look forward to more lines like this:

Elsewhere this week: Glyn Morgan on what America’s predatory mercantilism means for Europe; Mani Basharzad on defending economic liberalism against the new market authoritarianism; Maxwell Marlow on the epidemic of illicit cigarettes killing Britain’s high streets; Shimeon Lee on a benefits system spiralling out of control; and Nima Sanandaji on why Sweden was never the high-tax poster child the Left claimed.

Marc Sidwell
Editor, CapX

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SpaceX is capitalism’s greatest vindication

Reem Ibrahim

Elon Musk’s SpaceX has launched the largest ever public offering of stock today, selling $75 billion worth of shares.

SpaceX emphasised its remarkable achievements in its IPO filing: ‘We are the primary launch provider for the US government. In 2025, we launched 11 of 12 National Security Space Launch (‘NSSL’) medium and heavy lift missions and all five U.S. crew and cargo missions to the International Space Station for NASA.’

The company is best known for building reusable rockets, and for dramatically reducing the cost of satellite production and rocket launches. Since 2023, SpaceX says it has launched more than 80% of the world’s mass to orbit each year, with an over 99% mission success rate on its Falcon rockets. Certainly an extraordinary achievement for a private company in a sector once dominated by government space agencies.

However, its business activities extend far beyond launching satellites and cargo into orbit. Through Starlink, its low-Earth-orbit satellite internet network, the company has become a leading provider of telecommunications infrastructure. SpaceX has over 9,600 Starlink broadband and mobile satellites in low-Earth orbit, providing internet connectivity to approximately 10.3 million Starlink subscribers across 164 countries, territories, and other markets.

This technology has proven to be invaluable in moments of crisis. When authoritarian crackdowns or internet shutdowns occur, satellite broadband can offer one of the few remaining ways for civilians, journalists, dissidents, and aid workers to communicate with one another and the rest of the world. As Al Jazeera reported, when the Iranian government briefly cut off internet access last year, Starlink was used by citizens to tell the world what was happening.

SpaceX is a company sitting at the intersection of defense, communications, and extraterrestrial exploration. It is no wonder investors are excited.

The largest IPO of the year ahead of SpaceX was chip maker Cerebras, which has created a Wafer-Scale Engine that contains 900,000 AI-optimised cores and has revolutionised the speed at which artificial intelligence models can be trained and run. Its shares were priced at $185 and closed their May 14 debut at $311.07, a roughly 68% jump that gave the company a market capitalization of about $66.95 billion. Certainly a sign of the kind of investor appetite SpaceX is hoping to tap into.

Musk has indicated that he hopes to allocate a larger portion to individual investors, and so far, individual investors alone have requested more than $70bn worth of SpaceX shares. Over $1bn has been requested from a single family office investor, and requests have come from sovereign-wealth funds. Large asset managers have also shown interest, with BlackRock placing an order to buy at least $5bn.

That level of demand is striking not just because SpaceX is large, but because of what SpaceX represents: the triumph of private enterprise in an industry once dominated by the state. For decades, space exploration has been treated as government territory. Rockets were built through sprawling procurement systems, launches were ruinously expensive, and progress moved at a slow pace.

However, this was not always the case. As Rainer Zitelmann argues, in the early 19th and 20th centuries, early forms of space exploration (namely, the building of space observatories) were typically privately financed. ‘In a sense, the state-dominated Space Economy of the mid-to-late 20th century was the exception, and the recent rise of private space entrepreneurs can be seen as a return to the historic norm.’

SpaceX has embraced private capital and relentless experimentation. It has revolutionised the entire industry in ways that the state has not.

That is the real significance of this IPO. SpaceX is not just selling shares, but it is offering public markets a stake in one of the greatest capitalist success stories of the 21st century. The company’s rise is proof that free markets are not merely good at producing things people consume directly. Free enterprise can transform civilisation-defining industries.

SpaceX now launches national security missions, carries astronauts, connects remote communities to the internet, helps people communicate during crises and pushes humanity closer to exploring the universe.

Whether SpaceX can justify its extraordinary valuation remains to be seen. What is already clear, however, is that activities once assumed to be the natural domain of government can often be done better, faster, and more ambitiously through the dynamism of capitalism and the brilliance of entrepreneurs.

SpaceX is a lesson not only in what markets can achieve, but a reason to ask where else the government should get out of the way.

And if you want more…

– Reeves is closer to an IMF bailout than she thinks (Damian Pudner)

– What the World Cup tells us about free trade (Ben Ramanauskas)

– The £1,000 rule killing Britain’s cake sheds (James Hodgkinson)

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We’ll be back on Monday.

Meanwhile, with today’s IPO of SpaceX, Elon Musk is the world’s first trillionaire. As CapX readers will know, however well his company delivers for investors, that’s worth celebrating.

And in Iran, the standoff continues. Having pulled back from a further attack last night, Donald Trump is now furiously denying Iranian reports that he is ready to pay $300 billion as part of a peace deal. ‘Very dishonourable people to deal with,’ he posted on Truth Social. ‘The president is going to get us a good outcome, one way or the other,’ JD Vance told his followers on X. Let’s hope.

Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.

Marc Sidwell
Editor, CapX

Today’s Takes

Fresh thinking from CapX

SpaceX is capitalism’s greatest vindication

Reem Ibrahim

‘ SpaceX has embraced private capital and relentless experimentation. It has revolutionised the entire industry in ways that the state has not.’

Whether SpaceX can justify the extraordinary valuation behind its $75 billion IPO remains to be seen. What is already clear, however, is that activities once assumed to be the natural domain of government can often be done better, faster and more ambitiously through the dynamism of capitalism and the brilliance of entrepreneurs. Read More

Fake fags are killing Britain's high streets

Maxwell Marlow

‘Smokers are now switching en masse to black market cigarettes.’

Almost a third of cigarettes consumed in the UK are now bought on the black market, and our high streets are suffering as a result. If legal businesses are ordered to sell cigarettes at the regular retail price of around £15 (not including overheads and other regulatory costs), how are they supposed to compete with less scrupulous outfits who go as low as £5? Read More

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Keir Starmer will fight on

Patrick Maguire, The Times 🔒

‘The f***ing strategy is to tell his challengers to f*** off.’

How can the Prime Minister argue he has made the right calls on foreign affairs, national security and investment in public services after his Defence Secretary’s resignation letter? Yet he will try. Keir Starmer does not want to resign. He does not think he needs to resign. He will not be made to resign. Those in the Labour Party who disagree have a fight on their hands. Read More

Zack Polanski’s war on carrots

Viggo Terling, The Critic

‘If Polanski wants more people to be able to afford the competitively priced groceries in this country, let’s make it easier for them to find jobs, not attach unaffordable, inflation-beating salaries to their employment.’

It’s hard to keep up with Zack Polanski. One day he argues for a wealth tax to help the poorest in our society, the next he is critiquing their ability to purchase cheap, abundant produce. Polanski’s latest complaint is that cheap supermarket vegetables mean ‘something is not right’. But there’s nothing wrong with competitive markets bringing down the cost of living. Read More

The end of pretence

Fraser Nelson

The Capitalist

Keir Starmer is giving tech companies three months to activate on-device content scanning and age verification across all smartphones and tablets sold in Britain in the name of child safety. The proposal has drawn fierce criticism from privacy advocates. The messaging app Signal has already said it will not comply – will others follow?

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And if you want more...

– David Hockney’s defiant pleasure (UnHerd)

– How Britain became as poor as Mississippi (The Atlantic)

– Wegovy pills are coming to your local chemist (The Telegraph)

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As if to drive home the urgency, President Trump may send US troops in to seize control of Iran’s Kharg Island and its oil infrastructure as early as tonight. With the World Cup also getting underway in America, this is the first time a host nation has been at war with one of the participants. But maybe peace will break out before the end of the group stage.

Meanwhile, Andy Burnham, Starmer’s likely challenger for the Labour leadership, has been busy backtracking on his ill-advised support for the WASPI women’s compensation claims. A spokesman has clarified that Burnham’s backing doesn’t extend to a multi-billion pound payout as the campaigners want. If nothing else, Burnham promises to deliver U-turns faster than the current Government.

Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.

Marc Sidwell
Editor, CapX

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Today’s Takes

Fresh thinking from CapX

Rachel Reeves is closer to an IMF bailout than she thinks

Damian Pudner

‘ A country cannot keep piling up debt faster than it is growing the income needed to support it.’

Britain has a better than 50:50 chance of a major debt crisis before 2030. That’s not the view of an excitable commentator, but Kenneth Rogoff, the IMF’s former chief economist. With the national debt on course to hit £3 trillion this year, and the Government unwilling to rein in spending, Rachel Reeves needs to change course before disaster hits. Read More

What the World Cup tells us about free trade

Ben Ramanauskas

‘NAFTA actually created more jobs for Americans than it destroyed.’

The last time the US hosted the World Cup also marked the year the North American Free Trade Agreement came into force. There won’t be an anniversary celebration. Donald Trump’s promise to scrap NAFTA is arguably one of the reasons he became President in 2016. Yet the data shows that the trade deal was, in reality, a huge win for America. Read More

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Healey's resignation is devastating for Keir Starmer

Tim Shipman, The Spectator

‘This is the most consequential issue on which anyone has resigned for years; far more so than when Michael Heseltine quit Margaret Thatcher’s cabinet over the Westland affair.’

The Defence Secretary has resigned. His letter to the Prime Minister says: ‘you have been unable, and the Treasury has been unwilling, to commit the resources that the nation needs to defend the country at this time of rising threats’. Starmer was praised for his handling of foreign affairs in his first year. Now he looks like he has failed in the first task of any government. Read More

Britain doesn't need a tax war on billionaires

Gerard Lyons, The Telegraph 🔒

‘Britain should not become hostile to success.’

In the UK, the debate about taxing the ultra-wealthy is likely to be given a renewed boost if Andy Burnham is elected to Parliament and makes a tilt at No 10. But it is important to approach any debate on billionaires rationally, or bad policy will follow. The debate is not really about them. It is about the kind of capitalism we want. Read More

How to get towers built in Canada

Works in Progress, Anya Martin

The Works in Progress Newsletter

How the Squamish built Senakw

This is the third of three articles from Issue 24 of Works in Progress, which has been arriving with subscribers this week. Subscribe in the next few weeks to receive it, and future issues, straight to your door, workplace, or institution…

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10 days ago · 28 likes · 4 comments · Works in Progress and Anya Martin

The Capitalist

Keir Starmer is giving tech companies three months to activate on-device content scanning and age verification across all smartphones and tablets sold in Britain in the name of child safety. The proposal has drawn fierce criticism from privacy advocates. The messaging app Signal has already said it will not comply – will others follow?

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And if you want more...

– How smartphones broke British politics (Politico)

– Dear Chancellor: Here’s how to pay for Britain’s defence (CapX archive)

– How Europe lost the future (Europe 2031)

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Finally, my very best wishes to Joseph Dinnage, who moves on from CapX to join the Prosperity Institute today – you can read his last column for us as deputy editor below. And don't worry, Joe will continue to write for us regularly in his new role.

Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.

Marc Sidwell
Editor, CapX

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Today’s Takes

Fresh thinking from CapX

What next for Britain's economy?

Joseph Dinnage

‘Rachel Reeves has been a friend to business in the way Brutus was a mate of Caesar's.’

After two and a half years, CapX’s deputy editor is leaving. How far has Britain come in that time? The Conservatives have been replaced by Labour, and Reform UK and the Greens are threatening the political duopoly. But on the really important matters – economic growth, taxation, business and public spending – politicians are responding to the same old rotten incentives. Read More

The £1,000 rule killing Britain's cake sheds

James Hodgkinson

‘Home bakers are being told that they must purchase a street trading licence or shut up shop.’

In recent months, a baked-goods revolution has swept the nation. Stalls have been set up, and home bakers have thrown open their garden gates to commerce. Given Britain’s dire economic outlook, many would find this ingenuity laudable. Unfortunately, regulation-obsessed local authorities seem to disagree. Read More

The Capitalist

Keir Starmer is giving tech companies three months to activate on-device content scanning and age verification across all smartphones and tablets sold in Britain – or face fines and potentially criminal liability. Framed as a child safety measure, the proposal has drawn fierce criticism from privacy advocates, civil liberties groups and free speech lawyers who warn it amounts to building a mass surveillance infrastructure under the pretext of safety. The messaging app Signal has already said it will not comply – will others follow?

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In Belfast, history and mass migration are a toxic mix

Ian Acheson, The Daily Telegraph 🔒

‘In tightly packed, low-income neighbourhoods where people already feel squeezed, even relatively small changes can be politically explosive.’

The atrocious knife attack in north Belfast, in which police say the suspect is Sudanese, brings together three uncomfortable facts about modern Northern Ireland. First, the place is still hard-wired for sectarian politics. Second, it is now experiencing migration and demographic change that its institutions were never designed to handle. Finally, there is almost no honest public language for discussing the overlap between the two. Read More

Why is Peter Kyle trying to pick winners?

Matthew Bowles, City AM

‘Instead of creating a better environment for all businesses, ministers appear convinced that growth can be engineered through targeted support to a select few firms deemed worthy of special treatment.’

If Britain is to ever produce a trillion-dollar company, it will not be a result of the schemes announced by Peter Kyle and Rachel Reeves this week. It will be a result of creating an economic environment in which ambitious businesses can start, scale, invest and recruit without needing special handouts or assistance from the state. Read More

How long until AI doesn’t need humans?

Asterisk Magazine

Asterisk Magazine

How long until AI doesn’t need humans?

This article originally appeared in Issue 14: Risk. Subscribe to the print magazine by June 30th to receive our next issue, Work…

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12 days ago · 2 likes

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And if you want more...

– Kemi Badenoch is laying a trap for Nigel Farage (UnHerd)

– The first human trial of a reverse-aging drug begins (Business Insider)

– Why welfare reform is a growth strategy (Jeremy Hunt)

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I think the important thing to remember is that almost every single UK politician I’ve ever heard discuss these matters is a slack-jawed moron when it comes to technology policy.

Keir Starmer is giving tech companies three months to activate on-device content scanning and age verification across all smartphones and tablets sold in Britain – or face fines and potentially criminal liability. Framed as a child safety measure, the proposal has drawn fierce criticism from privacy advocates, civil liberties groups and free speech lawyers who warn it amounts to building a mass surveillance infrastructure under the pretext of safety. The messaging app Signal has already said it will not comply – will others follow?

In this week’s episode of the Capitalist podcast, Preston Byrne, free speech lawyer and counsel to some of the internet’s most controversial platforms, joins me to discuss what this proposal could mean for Britain’s tech sector.

Below, you’ll find a short excerpt from our conversation.

Marc Sidwell
Editor, CapX

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Preston Byrne on UK tech policy

I think the important thing to remember when it comes to internet policy is that everybody in Parliament, almost every single UK politician I’ve ever heard discuss these matters, is a slack-jawed moron when it comes to technology policy.

And this is not an exaggeration. These people have no idea how the internet works. They have no idea how computers work.

The policies that they’re proposing are sufficiently over-broad and described in such general terms that it doesn’t really provide a whole lot of guidance to tech companies as to how they could comply with them, except by doing what we’ve seen Ofcom do over the last year, which is that they kind of make it up as they go and political pressure is applied on the agency or on Parliament to do more.

…

There are plenty of applications that if a parent wants to do this, they can lock down their kid’s phone so that a kid can’t get messages.

These tools already exist, right? And they’re optional.

All of the tools that Apple has: you can make sure that your kid can’t download apps that are unauthorised. You can lock down a kid’s phone plenty.

What the UK is proposing to do here in this case – and it remains to be seen what exactly they will do. We’ll have to wait and see what statutory instrument the DSIT secretary decides to publish for approval. But in this case, everybody’s best guess is that what will happen with the age verification on devices is that the UK will compel the manufacturers to require an age verification solution, which will be provided by an age verification company.

And you won’t be able to access the internet as in anybody in the UK – adult, child or otherwise – without first getting your identity verified, which is an intrusion on privacy.

But if you’re just talking about child protection as the objective, the tooling already exists. The issue is that nobody uses it because what happens?

They lock down the phone. You know, the kid goes and uses the phone. There’s some feature that needs to be unlocked. The parent gives up and they say, okay, well, we’ll turn off the feature because we want the kid to go use the phone.

So this is something where if you want to, as a parent, protect your child from the internet, you already have the tooling available to do that on a voluntary basis without the government intruding in American companies’ supply chains and encryption to do it.

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It seems Keir Starmer is planning to steal a different plank from Badenoch’s policy platform – her call for a social media ban aimed at under-16s. The White House – which sees this as an attack on the US tech sector – is so unimpressed it has actually made its own submission to the ongoing consultation. For more on the strains in the special relationship, see Glyn Morgan’s piece for CapX below.

Meanwhile Reform UK have declared themselves the new ‘party for workers’, and invited trade unions to attend its annual conference and to sign up as affiliate members. Polling does show Nigel Farage is now the most popular party leader among union members, but the heads of the big unions have predictably rebuffed his offer – at least for now.

Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.

Marc Sidwell
Editor, CapX

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Today’s Takes

Fresh thinking from CapX

Say goodbye to 'American Europe'

Glyn Morgan

‘Europeans, whether pro-market Atlanticists or EU federalists, will have to come to terms with life within “Civilisational America”.’

European leaders must reckon with the fact that ‘American Europe’ has given way to ‘Civilisational America’. The former, which lasted between 1945-2025, saw Europe sacrifice economic independence for US-backed security. The latter, however, is defined by a predatory American mercantilism, rooted in the Trump administration’s belief that it must extract more rent from its allies to combat the rise of China. Read More

Britain's benefits system has spiralled out of control

Shimeon Lee

‘Some PIP claimants receive as much as £33,000 a year in benefits.’

After the Government’s timid attempt to slow the growth of welfare spending collapsed under pressure from its own backbenchers and disability activists, ministers needed a way out. Their answer was the Timms Review of Personal Independence Payments. Unsurprisingly, it was a complete damp squib. Real terms spending on disability benefits has more than tripled since 2008, and it’s time for politicians to act. Read More

What happens when liberalism loses?

Mani Basharzad

‘Liberalism loses when it attaches itself only to economics.’

When asked to choose between freedom and security, 93% of Chinese respondents opted for security. This is because they are living under the world’s most effective modern dictatorship, which has understood the art of combining economic growth with an oppressive political system. If liberalism is to survive as a credible alternative and win the battle of ideas, it cannot define itself solely in economic terms. Read More

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Labour's state capitalism is heading for disaster

Ben Marlow, The Daily Telegraph 🔒

‘The Government’s plans to reboot the economy are becoming increasingly desperate and wayward.’

London Tech Week is upon us and Peter Kyle has announced plans to ‘aggressively’ acquire large stakes in fast-growing private-sector firms. There’s so much that is wrong with this idea that it’s difficult to know where to start, but what is blindingly obvious to anyone with half a business brain is that it will end badly. Read More

Starmer's sinister social media restrictions

Matthew Lesh, City AM

‘Nobody wants to see children threatened. But technically speaking, and for our basic civil liberties, this policy is extremely problematic.’

To protect children from nude images online, the Government is demanding that Apple install on-device AI nudity-detection software at the operating system level for iOS, and that Google do the same for Android. This would involve constantly scanning the camera viewfinder, screen output, livestream, and stored files, and blocking or blurring nudity in real time. While well-intentioned, this amounts to surveillance technology on every device in the country. Read More

How to finance a space elevator

James Pethokoukis

Faster, Please!

🛗 How to finance a space elevator

My fellow pro-growth/progress/abundance Up Wingers in America and around the world…

Read more

12 days ago · 6 likes · James Pethokoukis

The Capitalist

In this week’s episode of the CapX podcast, economists Soumaya Keynes and Chad Bown join Marc Sidwell to discuss the new world of economic conflict, why tariffs are like a party drug – and how trade wars can still spiral out of control.

The CapX Briefing

The Capitalist Podcast: How to win a trade war

With Donald Trump back in the White House, tariffs have become front-page news, and advocates for free trade find themselves on the back foot. Is this a passing phase, or a permanent shift…

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18 days ago · CapX and Marc Sidwell

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And if you want more...

– What Hayek can teach us about literature (Marginal Revolution)

– Join the waiting list for a robotaxi ride (Shortlist)

– The world’s first AI-designed vaccine (The Conversation)

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Each week we bring you Despatch – an example of the best writing from CapX, read aloud. For hosted conversations, listen to The Capitalist, every Wednesday.

Elsewhere, the tariffs brought in as part of Labour’s effort to prop up domestic steelmaking already look set to make it even more difficult to hit the party’s promised targets on housebuilding, by raising the cost of a key construction material.

But not to worry, there are still ways in which Britain leads the world. Our national debt is growing faster than any country in the world – except Botswana. Maybe under Andy Burnham we can make a bid to claim the top spot.

Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.

Marc Sidwell
Editor, CapX

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Today’s Takes

Fresh thinking from CapX

Is Andy Burnham a Nimby?

James Ball

‘He does seem to have three very different housing policies, which in places are diametrically opposed to one another.’

For this week’s ‘Nimby Watch’, we’re off to Winstanley, in the historical county of Lancashire, where Andy Burnham is contesting the Makerfield by-election. It seems the Mayor of Greater Manchester has pulled quite the U-turn when it comes to housing policy. Despite having successfully overseen the building of lots of ‘luxury’ flats in the Cottonopolis, he now seems to have changed his tune. Read More

The Left has lied to you about Sweden

Nima Sanandaji

‘Thanks to free markets, Sweden even rebounded rapidly from the Great Depression.’

The Left would have you believe that Sweden is a socialist utopia. This couldn’t be further from the truth. Home to the world’s first central bank and the first company with shares, the lesson to be drawn from Sweden’s experience is that sound institutions, limited taxation and free markets create progress. Read More

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Let's celebrate profit, not apologise for it

Luke Johnson, The Daily Telegraph 🔒

‘Humans respond to incentives, and the profit motive is a powerful one.’

The Confederation of British Industry has accused Labour of ‘turning profit into a dirty word’. But profit isn’t a dirty word. In fact it is an absolutely essential element of what makes society function. Without profit, there would be no industry, no investment, no growth, no innovation and no progress. Read More

When the state gets in the way, it's us who pays

Oliver Dean, ConservativeHome

‘It does not matter what “pro-business” platitudes they peddle, nor what shade of red they may wear – if Labour can tax it, they will.’

‘This Government isn’t going to sit aside from the businesses we are backing,’ Business Secretary Peter Kyle told The Times this week. Greater state intervention in the economy is neither what the British public want nor what they need. Since Labour came into office, business and enterprise have been strangled at every opportunity, and unemployment has crept upwards. When will this Government learn? Read More

What on Earth is Thomas Piketty talking about?

Noah Smith, Noahpinion

Noahpinion

Roundup #83: I told you so!

Howdy, folks! Today’s roundup is mostly a bunch of follow-ups to posts I wrote before. It’s very hard to decide when to post about a particular topic, and it often happens that some relevant news story or piece of data comes out a little bit later. These roundups are a good way of cleaning up those loose ends…

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13 days ago · 230 likes · 18 comments · Noah Smith

The Capitalist

In this week’s episode of the CapX podcast, economists Soumaya Keynes and Chad Bown join Marc Sidwell to discuss the new world of economic conflict, why tariffs are like a party drug – and how trade wars can still spiral out of control.

The CapX Briefing

The Capitalist Podcast: How to win a trade war

With Donald Trump back in the White House, tariffs have become front-page news, and advocates for free trade find themselves on the back foot. Is this a passing phase, or a permanent shift…

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18 days ago · CapX and Marc Sidwell

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And if you want more...

– The West isn’t ready for modern war (Lowy Institute)

– The hidden histories behind everyday abundance (Virginia Postrel🎙️)

– The race to save the world’s rarest tree (Phys.org)

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We'll be back on Sunday with the Weekly Briefing.

Later in the week, John Penrose wrote his column on Burnham’s comments on the unfairness of Britain’s tax system. Burnham’s right – our tax code does need an overhaul – but he’s right for all the wrong reasons.

And now for something completely different. Speaking at London’s SXSW festival earlier this week, former First Lady Michelle Obama told young people to toughen up and accept the fact they might not enjoy their first job. I agree, and in my column I argued that by basing its employment rights legislation on the demands of teenagers, the Government has discouraged businesses from hiring them.

CapX also covered a number of other stories this week. Free speech campaigner Freddie Attenborough argued against the Government’s decision to ban US left-wing commentators Cenk Uyghur and Hasan Piker from the UK; Matthew Bowles wrote about Labour’s cowardly approach to planning reform; and Anne Strickland discussed the financial questions that need to be asked about the Government’s counter-terrorism programme, Prevent.

My favourite piece of the week was by Erik Lidström, who wrote about the evolutionary reasons behind the Left’s antipathy to free markets. You can read it in full below.

It is also with a heavy heart that I announce that this will be my final Weekly Briefing, as I am leaving CapX next week. It’s been a pleasure, and whatever you do, be sure to keep reading Westminster’s finest opinion site.

You’ll also find some of our other favourite pieces from the week.

Joseph Dinnage
Deputy Editor, CapX

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Why the Left can’t stand free markets

Erik Lidström

At its heart, the reason is a fundamental mismatch between our hunter-gatherer brain and the market economy. Up until a relative blink of an eye, humans lived as hunter-gatherers for close to 2 million years, some 70,000–80,000 generations, successions of mothers and fathers, sons and daughters. For at least 150,000 years, our ancestors were exactly like us and lived in groups of 20–70, within tribes, whole countries, of about 500.

There was a strict division of labour, where men hunted, while women mainly gathered, looked after children and cooked. Big-game hunting and gathering not only provided different sources of food, but they were also subject to two different rules for sharing. Big-game hunting is hit and miss in the most literal sense. Big games are large, high-variability resources, and in all hunter-gatherer tribes, they are shared equally, according to strict rules. Woe betides the successful hunter who keeps more than his predetermined share. He faces ostracism or worse. Gathered food is not subject to such variability, and no one, except certain kin, has any right to what a woman gathers.

In countries of some 500 people, there existed two kinds of social coordination. First, the intuitive ones between people who know each other. Secondly, in smaller and larger groups, we can also deliberately organise ourselves, using bureaucratic rules. Both modes of organisation, and particularly the first one, constitute our human micro-cosmos.

We no longer live as hunter-gatherers, and our societies now consist of tens of millions in a world with over 8 billion inhabitants. Within a market economy, there is a third kind of coordination, based on three rules that David Hume pointed out: secure property rights, that we may freely buy and sell products and services and that contracts are respected. With these three rules in place, we may interact with people whom we have never met, or even know exist, on the other side of the planet.

These three rules hold sway in our macro-cosmos and create what Adam Smith called a Great Society. Friedrich Hayek gave the self-organisation of the market and beyond the name the extended order.

The CapX Briefing

The Capitalist Podcast: How to win a trade war

With Donald Trump back in the White House, tariffs have become front-page news, and advocates for free trade find themselves on the back foot. Is this a passing phase, or a permanent shift…

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17 days ago · 1 like · CapX and Marc Sidwell

The market is an example of a Complex Adaptive System (CAS), a complex system that can learn and adapt. Other examples of CASs are flocks of birds, schools of fish and anthills. There are no ant CEOs, ant managers or ant accountants. Nor is there an ant ‘hive mind’. There are just ants, walking about doing ‘ant things’, and the result is the ant hill.

This is where the hunter-gatherer brain and the workings of a free society collide. First, the Great Society ‘does not compute’ to the hunter-gatherer brain. Second, we have this innate rule that external high-variability resources should be shared equally. For such resources, as for big-game hunting, there is no causal link that can be identified between effort and reward. You may work 80 hours per week for years to start a business and fail, or you may work equally hard and have a runaway success. Or you may not work that hard, but even so, ‘strike oil’ and make it big, because you had some idea or noticed some opportunity. No one can determine ‘the merit’ of anyone in the Great Society.

Through cultural learning, we may learn and accept the appropriate behaviour in the market, and the way the economic game is played and acknowledge that the outcomes are based on a combination of skill and luck. Experience, as well as insight from authors such as Adam Smith, will also tell us that if we leave this chaotic thing, which is the market economy, to its own devices, incredible prosperity will be generated for society as a whole, but without anyone being able to predict individual outcomes. We may, therefore, mainly through culture, move away from our innate hunter-gatherer gut feelings towards that bourgeois culture that created our flourishing societies.

Others, such as students, journalists, politicians and academics, who are not participants in the market economy and who, as a result, lack the appropriate culture and insights, will instead obsess about Gini coefficients, high salaries, bonuses, windfall profits and the like, just like a group of hunter-gatherers obsesses about the equal sharing of a newly felled gnu.

And if you want more…

– Why Thatcher still matters today (Robert Colvile)

– Britain needs to build better (John Myers)

– The trillion-dollar opportunity in outer space (Rainer Zitelmann)

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With even the would-be replacements for Keir Starmer lacking new ideas, our editor-in-chief Robert Colvile has entered ‘hot essay summer’, republishing his piece from last year arguing that fixing Britain means rebuilding a responsible society on Thatcherite lines – see more below.

Meanwhile, the EU is looking for overseas sites where it can deport failed asylum seekers, with contenders in Central Asia or North Africa. Just a few years ago, German officials were critical of Britain’s attempts to do the same. But the mood is changing, and now even the body that supervises the ECHR seems to be offering grudging support. Just don’t mention Rwanda.

Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.

Marc Sidwell
Editor, CapX

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Today’s Takes

Fresh thinking from CapX

What Thatcher can still teach us

Robert Colvile

‘Our core problem today is the same one Thatcher diagnosed, namely that the state has grown large and the people have grown too small.’

It’s over 100 years since Margaret Thatcher’s birth, so why do we still care? It would have seemed strange, in Thatcher’s day, to write a diagnosis of the country’s problems, or even the Conservative Party’s, based on the life and thought of Stanley Baldwin. Yet Thatcher resonates now more than ever. Read More

To fix the housing crisis, we need to build better

John Myers

‘We can craft housing policies where existing renters and owners also stand to benefit from new development.’

The scale of the housing crisis is sobering. Britain has the worst housing shortage of any major developed nation. Anyone with half a brain knows that correcting this requires major planning reform to make it easier to build new homes. But what if we’ve been thinking about these reforms in the wrong way? We need to deliver a future where more homes are built with communities, not against them. Read More

Britain needs a brand new tax system

John Penrose

‘Could Burnham’s idea contain a tiny, glowing ember of good sense buried under Labour’s jealousy-driven, benefits-loving, profit-distrusting instincts?’

Andy Burnham has recently been commenting on the unfairness of our tax system, arguing for greater simplification. He’s right, but for all the wrong reasons. While his version of simplifying the tax code would amount to a tax raid on savings, pensions and investors, another version could generate untold economic growth. Read More

Stat of the Day

The CapX Reading List

The best of the web today

True neoliberalism has never been tried

Michael Simmons, The Spectator 🔒

‘The denunciation of “trickledown economics” as a neoliberal failure gets things precisely the wrong way round.’

Is ‘40 years of neoliberalism’ really to blame for the problems faced by workers in Makerfield, and indeed beyond? The banking crisis, low growth, youth unemployment, decaying high streets: the trope goes that it was neoliberalism wot dunnit. This is completely wrong. The real culprit is a political culture that has brought about the replacement of aspiration with dependency. Read More

The Government is failing the young

Matthew Elliott, ConservativeHome

‘Since the last King’s Speech, the number of young people not in education, employment or training has risen to more than one million.’

The Prime Minister declared last month that the King’s Speech was ‘a King’s Speech for the young people whose gifts lie in their hands, and who work hard.’ But the young people graduating from university or leaving school this summer could be forgiven for concluding that it was nothing of the sort. From welfare to job creation, the King’s Speech was silent on the issues that would actually help. Read More

Make Britain prosperous again

Albie Amankona, Fighting for a Freer Future

Voices for a Free Future with Steve Baker

Make Britain Prosperous Again

Britain is one of the few countries in the world actively trying to make itself poorer…

Read more

15 days ago · 11 likes · 1 comment · Albie Amankona

The Capitalist

In this week’s episode of the CapX podcast, economists Soumaya Keynes and Chad Bown join Marc Sidwell to discuss the new world of economic conflict, why tariffs are like a party drug – and how trade wars can still spiral out of control.

The CapX Briefing

The Capitalist Podcast: How to win a trade war

With Donald Trump back in the White House, tariffs have become front-page news, and advocates for free trade find themselves on the back foot. Is this a passing phase, or a permanent shift…

Listen now

17 days ago · CapX and Marc Sidwell

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And if you want more...

– How to fight back against Gen-Z socialism (The Economist 🔒)

– When three-foot scorpions ruled Britain (Phys.org)

– Britain swapped freedom for vetocracy (City AM)

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We'll be back on Sunday with the Weekly Briefing.

It’s been a lucrative first quarter of the year for Reform UK, as they received more than £9 million in donations, £7 million of which came from two British crypto billionaires based overseas. The Tories were the party with the second-biggest haul from donors, with just over £6m in total.

Elon Musk’s SpaceX made all such numbers seem small by announcing it is seeking to raise up to $86 billion – dwarfing the previous largest-ever IPO – on a valuation for the company of $1.78 trillion. Musk himself, though, was rebuked by Keir Starmer for interfering in British politics over the Henry Nowak case.

Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.

Marc Sidwell
Editor, CapX

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Today’s Takes

Fresh thinking from CapX

We need to talk about Prevent

Anne Strickland

‘Prevent has now drifted dramatically from its counter-terrorism purpose.’

The Government has taken an anti-transparency approach to its counter-terrorism programme, Prevent. Rather than allowing researchers to scrutinise how much money is being spent on Prevent and where, officials are withholding important information. This is not the appropriate way for such an operation to be run, and most importantly, it doesn’t make Britons safer. Read More

The real reason people resist free markets

Erik Lidström

‘There is a fundamental mismatch between our hunter-gatherer brain and the market economy.’

Humans lived as hunter-gatherers for close to 2 million years, some 70,000–80,000 generations. The division of labour was rigid, and there were strict rules about the need to share what was hunted. You might think that as society has developed, we no longer think in such a way, but these instincts are still in play, and they run contrary to the market economy. If we want prosperity, we must collectively put them to one side. Read More

Are you ready for the future of crime fighting?

James Price

‘For the victims of crime, new technologies may prove literally the difference between life and death.’

Flotillas of drones, fleets of Tesla Cybertrucks and ultra-modern tech are being used by the Las Vegas Police Department in a bid to make Sin City the safest place in America. This has also made Vegas the test bed for a suite of technologies that are transforming both policing – and the debate around it. This technology is immensely exciting, but also carries serious ethical implications. Read More

Stat of the Day

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Labour's anti-business profiteering

Ryan Bourne, The Times 🔒

‘A market price is not a moral confession.’

The Competition and Markets Authority will soon get rapid powers to investigate ‘unjustified price hikes’ by companies ‘taking advantage of crises’. Regulators may scrutinise margins, publicly name offenders and impose interventions. This is not 1970s crude price control, but legal intimidation that ignores the discipline of competition and consumers’ right to walk away. Read More

Police policies must be reformed

David Spencer, The Critic

‘Police recruits are taught, explicitly and implicitly, that allegations of racism are uniquely charged.’

The circumstances of Henry Nowak’s tragic death in police custody is an outworking of the conclusions reached nearly thirty years ago by William Macpherson’s inquiry into the death of Stephen Lawrence. The Lawrence case set the platform for the last three decades in policing; the Nowak case should now do the same. Read More

What to do about AI and jobs

Anton Leicht and Dean W. Ball, Threading the Needle

Threading the Needle

Betting on Humans

Today’s piece is co-authored with Dean W. Ball…

Read more

17 days ago · Anton Leicht and Dean W. Ball

The Capitalist

With Donald Trump back in the White House, tariffs have become front-page news, and advocates for free trade find themselves on the back foot. Is this a passing phase, or a permanent shift?

Soumaya Keynes and Chad Bown argue that with great powers now using trade as a weapon, there can be no simple return to the settled order of rules-based global trade that dominated the late 20th century. Their new book, ‘How to Win a Trade War’, provides a tour through the toolkit of the trade warrior.

In this week’s episode of the CapX podcast they join Marc Sidwell to discuss the new world of economic conflict, why tariffs are like a party drug – and how trade wars can still spiral out of control.

The CapX Briefing

The Capitalist Podcast: How to win a trade war

With Donald Trump back in the White House, tariffs have become front-page news, and advocates for free trade find themselves on the back foot. Is this a passing phase, or a permanent shift…

Listen now

18 days ago · CapX and Marc Sidwell

Subscribe now

And if you want more...

– How Chicken Cottage conquered Kashmir (Vittles)

– Milei’s Argentina is about to let AI own a company (Financial Times 🔒)

– Britain needs prosperity, not equality (ConservativeHome)

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We'll be back tomorrow.

Rather more promising was the release of plans for the expansion of Cambridge. (Though why not go further still?) But in a revelation that’s a little too on-the-nose, the Labour Growth Group announced it will be winding down – just as the Government needs fresh ideas. Perhaps Reeves should take a factfinding summer break to Denmark, where the new centre-left coalition government has promised to cut corporation tax and eliminate the highest bands of income tax.

In other news, the Bank of England wants to hear from you: are you more of an Atlantic puffin, or a European hedgehog?

Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.

Marc Sidwell
Editor, CapX

Subscribe now

Today’s Takes

Fresh thinking from CapX

Enjoying your job is not a human right

Joseph Dinnage

‘It’s one thing for my fellow young people to shout and stomp about what they believe an employer should provide for them, but it’s quite another when the state starts to listen.’

Michelle Obama clearly doesn’t suffer fools gladly, and this was on full display at this week’s SXSW festival in London. Among other topics, she discussed the tendency among young people to expect immediate career satisfaction, and argued that this is ill-advised, as workplace hardship early on can build character. She’s right, but our Government doesn’t recognise that, and has based its employment rights legislation on the demands of teenagers and unions over those of our business leaders. Read More

Should we have banned Cenk Uygur from the UK?

Freddie Attenborough

‘This appears to be the first high-profile instance in which the system has prevented a speaker from appearing before a university debating society.’

The Government has cancelled the Electronic Travel Authorisation of controversial left-wing US political commentator Cenk Uygur, meaning that he will not be able to address the Oxford Union. While his positions on the war in Gaza and Israel more generally would offend many, surely that should be up to the debating society, and not the state? Read More

Andy Burnham's prescription will make Britain sicker

Roger Partridge

‘If populism really were a revolt against inequality, Jean-Luc Mélenchon would be in the Élysée, Die Linke would be running Germany and Jeremy Corbyn would have led Labour to a thumping majority.’

Andy Burnham has one prescription, and he means to fill it, whatever the patient walks in with. The man with the broken arm, the woman with chest pains, the child with a fever: each leaves the surgery with the same pad of repeat scripts, which call for higher taxes on the rich, more generous benefits and the nationalisation of something. But Burnham has failed to recognise what is really wrong with Britain. Read More

The Capitalist

With Donald Trump back in the White House, tariffs have become front-page news, and advocates for free trade find themselves on the back foot. Is this a passing phase, or a permanent shift?

Soumaya Keynes and Chad Bown argue that with great powers now using trade as a weapon, there can be no simple return to the settled order of rules-based global trade that dominated the late 20th century. Their new book, ‘How to Win a Trade War’, provides a tour through the toolkit of the trade warrior.

In this week’s episode of the CapX podcast they join Marc Sidwell to discuss the new world of economic conflict, why tariffs are like a party drug – and how trade wars can still spiral out of control.

The CapX Briefing

The Capitalist Podcast: How to win a trade war

With Donald Trump back in the White House, tariffs have become front-page news, and advocates for free trade find themselves on the back foot. Is this a passing phase, or a permanent shift…

Listen now

18 days ago · CapX and Marc Sidwell

Subscribe now

The CapX Reading List

The best of the web today

Net Zero killed British industry, not Thatcherism

Kallum Pickering, The Daily Telegraph 🔒

‘Thatcherism, grounded in sound economics, represented the moment when policymakers decided to stop fighting the tide.’

Andy Burnham, like many on the Left, argues that Britain’s economic and social malaise started with deindustrialisation brought about by so-called ‘neo-liberal’ reforms undertaken by Margaret Thatcher’s Conservatives in the 1980s. While memories of miners’ strikes, union reforms and the privatisation of failing nationalised industries reinforce this popular narrative, the facts tell a different story. Read More

Why did Henry Nowak's last words count for so little?

Ian Acheson, The Spectator

‘Police recruits are taught, explicitly and implicitly, that allegations of racism are uniquely charged.’

The chilling banality of the officers’ responses to Henry Nowak’s last words is utterly disturbing. ‘I’ve been stabbed.’ ‘I can’t breathe.’ He said this to them repeatedly before he lost consciousness. These were not vague or confusing claims. Yet they were met with flat procedural detachment: stock instructions, routine control, an obvious reluctance to let what Henry was saying disturb the version of events already taking shape in the officers’ minds. Read More

Against accelerationism

Kristian Niemietz, IEA Insider

Institute of Economic Affairs | Insider

Against accelerationism

About 12 years ago, after a long period of doing zero physical exercise, I decided to drag myself back to the gym. My weight had just passed the symbolic 90kg threshold for the first time, and I realised that something had to change…

Read more

18 days ago · 36 likes · Kristian Niemietz and Institute of Economic Affairs

Stat of the Day

And if you want more...

– What do Conservatives believe? (ConservativeHome)

– Iran’s new grand strategy (Foreign Affairs)

– Bad policies are picking the pockets of consumers (The Critic)

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