CapX, London (2025)

03/07/2025

Zohran Mamdani, the person who defeated Cuomo in the primaries and is now seen as a mayoral contender for New York – the beating heart of capitalism – recently declared in an interview: ‘I don’t think we should have billionaires.’

Mamdani is not alone in this view. The visible edge of economic populism – the slogans, the soundbites – often conceals an intellectual iceberg beneath: ideas inherited from defunct economists, or sometimes living ones. One such idea with deep roots is limitarianism: the belief that there should be a cap on personal wealth.

Thomas Piketty defines it as ‘the idea that we should set a maximum on how much resources one individual can appropriate’. Its most articulate modern advocate is Ingrid Robeyns, whose recent book, ‘Limitarianism: The Case Against Extreme Wealth’, calls for a global wealth cap, which she suggests could be set around $10 million per person.

But limitarianism rests on an old intellectual error. An error common not only on the Left but even among some classical liberals too: the mistaken division between ‘production’ and ‘distribution’. The assumption is that production happens through economic forces and that distribution is purely political, so policymakers can reshape who gets what without damaging how much is created.

This assumption leads to the view of the economy as a fixed pie. If one person has a large slice, others must go hungry. As Percy Shelley put it in ‘Queen Mab’ (1813), ‘The rich have become rich by the toil of the poor… they increase in wealth by the misery of the workers.’ While that may describe life under socialism, it misunderstands how wealth is generated in a capitalist system.

In capitalism, you can grow rich by making the pie bigger: creating products, companies, jobs and innovations that benefit not only yourself, but millions of others. This insight was first observed by French sociologist Gabriel Tarde, and later expanded by economists like Ludwig von Mises and Friedrich Hayek. Tarde noted how luxuries eventually become necessities. His example was forks and spoons, once the preserve of the wealthy, now found in every home.

✍️Mani Basharzad

Zohran Mamdani, the person who defeated Cuomo in the primaries and is now seen as a mayoral contender for New York – the beating heart of capitalism – recently declared in an interview: ‘I don’t think we should have billionaires.’ Mamdani is not alone in this view. The visible edge of econ...

02/07/2025

This week will mark anniversaries for two Labour Prime Ministers. On Friday, Keir Starmer will have been in post for a year, and on Saturday, the Labour movement will celebrate 80 years since the election of Clement Attlee.

One will prove a happier occasion than the other. Not even the most centrist of dads could, in good faith, describe Starmer’s first year as Prime Minister as having gone well.

The recent fiasco over Labour’s flagship welfare bill has been unedifying in the extreme. Faced with a backbench rebellion, the Government was coerced into watering down its already poor legislation to a thin gruel. What was initially going to deliver £4.6 billion in annual savings is now projected to save us nothing at all by 2029-30. To plug this hole, tax rises will almost certainly be coming in the Autumn.

Starmer’s U-turns don’t stop at welfare reform – he is a veritable boomerang of a Prime Minister.

In an interview with Tom Baldwin, the Prime Minister not only doubled down on regretting having used the phrase ‘island of strangers’ to describe Britain, but also admitted that he had not read the speech properly before delivering it.

Then, of course, in an another about-turn which now feels like his early experimentation with administrative cowardice, Starmer reeled back the changes he promised to make to the Winter Fuel Allowance. This decision to hand pensioners their lunch money back will cost £1.25 billion and do nothing to appease the elderly voters they’ve managed to infuriate.

So what is it that links rudderless Starmer – besides a red rosette – to the WWI veteran who established the National Health Service? Our current Prime Minister, like Attlee, will go down in British history as an epoch-defining leader – albeit in two very different ways.

✍️Joseph Dinnage

Starmer is the final wheezing, disorientated torchbearer of the Blairite political settlement

02/07/2025

Political leaders have seized on the promise of new weight-loss drugs, hoping they might offer a ‘silver bullet’ (or ‘silver epi-pen’) solution to an overstretched welfare state – one that doesn’t require making politically painful decisions.

On some level, their enthusiasm is warranted. Obesity levels in the UK have surged: from 15% of adults in 1993 to 29% in 2022. Today, nearly two in three adults are overweight, and one in four children. The societal consequences are enormous. According to research by the Tony Blair Institute, the annual cost of obesity to the UK is £98 billion – including £19 billion in NHS spending and £15 billion in lost economic productivity. If a drug could reduce obesity even by a quarter, the impact on both the economy and public services could be transformative.

However, there are good reasons to be cautious.

✍️James Rose

New anti-obesity drugs are not a 'silver epi-pen' for overstretched entitlements

02/07/2025

While Labour’s goal of building 1.5 million new homes and improving Britain’s infrastructure is commendable, their proposed changes to inheritance tax on top of the recent rise in National Insurance could undermine the very businesses needed to achieve these objectives.

At the heart of this is Business Property Relief (BPR) – a longstanding policy that allows family-run businesses to pass on assets, such as machinery, yards or farmland, without triggering punitive inheritance tax bills.

It’s not about exploiting loopholes. It’s about recognising that many of these businesses are asset-rich but cash-poor. They don’t hold their wealth in bank accounts. It’s tied up in diggers, scaffolding, tractors and depots – the tools they need to operate.

In construction, this relief is essential. Most plant-hire businesses, which supply the machinery that keeps housing and infrastructure projects moving, are small, family-owned firms that reinvest heavily in their equipment and workforce.

These are not firms sitting on cash. They are firms that survive on tight margins while bearing the full cost of recruiting, training, insurance and maintenance.

Labour’s plan to cap BPR would change all that. By making these assets subject to inheritance tax, many family businesses would face an impossible choice: either sell key parts of the company to pay the tax bill or shut down entirely.

✍️Steve Mulholland

An urgent rethink is needed, before they decimate the UK's construction industry

01/07/2025

In May, Keir Starmer claimed that his Government’s latest deal with Brussels would ‘reset’ the UK’s relationship with the EU. The Prime Minister said that, among other gains, the Irish Sea border between Great Britain and Northern Ireland would soon soften, thanks to an impending Sanitary and Phytosanitary agreement on food and animal products.

Unfortunately, the truth is that the frontier is again about to become substantially harder. The latest tranche of Windsor Framework requirements come into force today, making it even more complicated for companies from the British mainland to send goods to Ulster. This is particularly worrying, because the existing arrangements have already created huge difficulties, causing many firms to withdraw completely from the Northern Irish market.

Indeed, just last week, the Federation of Small Businesses published a survey which demolished the idea that the sea border is an advantage to Northern Ireland’s economy. The report found that over a third of small companies that previously moved goods between Great Britain and Northern Ireland (in either direction) have stopped, ‘rather than contend with the Windsor Framework’. Similarly, 58% of respondents experienced moderate or significant difficulties due to the post-Brexit deal, with the proportion in Northern Ireland rising to 78%.

This dismal picture is likely to deteriorate further thanks to the latest regulations.

Under the Northern Ireland Retail Movement Scheme, which was part of the so-called ‘green lane’, many meat and dairy products already require ‘Not for EU’ labels to be sold in the province. From today, those regulations will apply to a much more extensive range of food and drink, as well as other products that Brussels claims pose a ‘high risk’ to its market.

✍️Owen Polley

Despite their inaction, the Conservatives at least seemed guilty about the sea border – this Government seems indifferent to Ulster’s problems

01/07/2025

The UK has a housing shortage. Decades of underbuilding have driven up the cost of homes, far-outstripping wages or inflation. This is especially the case in and around our most productive cities. London, for example, has failed to build more than 50,000 homes in a year since the 1930s despite having a housing target of 88,000. As a result, the capital has seen the average house price skyrocket from just £25,700 in 1980 (or £89,000 adjusting for inflation) to £530,000.

The size of the housing shortage and its effect on affordability are only getting worse. New Centre for Policy Studies research found that the UK is short 6.5 million homes compared to similar European countries. As of 2023, the latest year comprehensive numbers are available, there were 30.4 million homes in the UK to house 68.2 million people. That is 446 homes per 1,000 people, which is the second worst rate among other comparable European countries. Only Ireland has fewer homes per capita.

A weighted average of similar European countries results in 542 homes per 1,000. To get to that level of housing, the UK would need to build 6.5 million homes.

The housing shortage is worst in England, and specifically London. The capital has just 427 homes per 1,000 residents. Compared to the weighted average of European countries, London needs to build 1.1 million more homes. Yet even this is an underestimate because it does not include all the extra homes that would be needed given the pent-up demand that Britons have for living in London.

The elephant in the room for any housing discussion is immigration. Reform UK has argued that the real reason behind Britain’s housing crisis is mass immigration since 1997. While others, notably the Housing Secretary Angela Rayner, are uncomfortable reconciling the link between high levels of migration and its effect on the housing shortage.

In actuality, the UK’s housing shortage is primarily down to underbuilding, but immigration, especially the recent peaks, have worsened it. Over the past four decades, France has expanded its housing stock by 1.1% on average per year, while England has only managed 0.8% growth. Strikingly, there has never been a year that England has built as much as the French average or that France has built as few as the English.

✍️Ben Hopkinson

6.5 million missing homes should be a wake-up call to go further in enabling housebuilding in the UK – it's time to catch up with the French

30/06/2025

The Glastonbury Festival has just taken place. It is a capitalist success story – though a rather more exclusive one than Amazon. Tickets cost £387.50 plus a £5 booking fee. There is strict security to keep out the poor – even an internal prison for those caught breaking in, who are then detained as a punishment before being evicted or handed over to the police. If only all businessmen were so robust in defending their commercial interests.

In 2017, Jeremy Corbyn gave a speech to the affluent class warriors. He was Labour leader and it was a time of Peak Corbynism. ‘If you see that far,’ he said to the crowd, ‘look at the wall that surrounds this festival. There’s a message for President Donald Trump. You know what it says? Build bridges, not walls.’ The irony was lost on his adoring fans.

Michael Eavis – the founder of Glastonbury Festival – referred to Corbyn as the ‘hero of the hour’.

This year, the acts included punk duo Bob Vylan. The organisers apologised for his chants, which included, ‘death, death to the IDF’. There is ‘no place at Glastonbury for antisemitism, hate speech, or incitement to violence,’ said a spokesman. They ‘stood against terror’ – curious then that they should have also booked a band from Northern Ireland called Kneecap, whose apologism for terror is hardly a secret.

Eavis (now Sir Michael) is 89. Despite his professed admiration for Corbyn, his thoughts are turning, not to giving all his money to the state, but how to keep this family business going after he has gone. The founder has transferred ownership to his daughter to save her £80 million in inheritance tax.

✍️Harry Phibbs

Glastonbury Festival is a capitalist success story

30/06/2025

In politics, it’s not enough to have the right diagnosis – you need think strategically. By failing to consider the people affected by its proposed welfare reforms, the Government has boxed itself into yet another reset. I have no truck with the argument that Keir Starmer was ‘distracted’ – the Prime Minister would do well to remember he is after all First Lord of the Treasury, and being Prime Minister is all about seeing the big picture. But if Keir Starmer wants some inspiration about how to fix this, he ought to look back to around 20 years ago.

Whenever Gordon Brown was thinking about significant policy changes, he thought about them in terms of ink. In part, this was a counterbalance to officials and political apparatchiks presenting policy in PowerPoint, graphs and spreadsheets. He saw these approaches as fatal to understanding and effectively testing policy. He preferred an essay or speech as a far more effective way of testing the policy proposition.

Brown would bring his inner team in and write a speech – he was cognisant that if he did implement the policy, it could end up being an op-ed or a set piece political moment. Thinking in ink allowed him to diagnose problems, analyse solutions that have been tried and failed and then to provide an explanation for failure. The upside was that he could think through the case with rigorous analysis of what might work, how it would be delivered and how it would be consistent with their stated values – now ‘missions’.

Of course he made mistakes, but this element of thinking in ink is critical. It really interrogates policy from all angles by considering a range of stakeholders affected and evaluating the balance of rights and responsibilities between citizen and state – our social contract.

There is no doubt the social contract is fraying in the UK and in western democracies generally – populists are having a field day and are finding it easier to connect with the public.

Intergenerational inequality is the structural issue underpinning social cohesion.

However, there is a glimmer of light for all generations of voters. In Westminster and business circles, there is enthusiasm around the Government’s flagship Planning and Infrastructure Bill, and rightfully so. It is an important gateway piece of legislation that if enacted can be a catalyst for increased investment rates that get projects off the ground and improve people’s lives.

✍️Gerry McFall

The Prime Minister needs to restructure the national conversation about growth

27/06/2025

Last month, Friedrich Merz was sworn in at the head of a new government in Germany, promising a new era of lower taxes, higher growth and tougher migration policy. In many respects, this is standard fare for a centre-right leader cleaning up after left-wing drift. But buried in the 144-page coalition agreement was a quietly revolutionary approach to dealing with climate change – the use of international carbon credits. And many of our peers are looking to do the same thing – Switzerland made headlines last year by funding electric buses in Thailand.

Yet here in the UK, the Labour Government is giving credits a firm ‘nein’ – prioritising ideology over pragmatism and likely making decarbonising more expensive than it needs to be. For politicians seeking a new strategy on climate that dispenses with some of the previous green dogma, carbon credits are a good place to start.

Basic economics says that if two parties face differing opportunity costs for the same good, trading can lead to better outcomes for both – the foundational logic behind free trade and all of the wealth it has brought the world. But in the world of carbon, while we embrace this logic domestically via emissions trading between firms, we shun it internationally – for the sake of our carbon budgets and international obligations, only reductions here at home ‘count’.

International carbon credits have had a rocky history over the last 20 years.

The Kyoto Protocol, the forerunner to the Paris Agreement (which governs climate change at an international level), included mechanisms for countries to trade emissions reductions – and the first global carbon market was born. After all, emissions reductions tend to be cheaper in developing countries than in developed ones, and the planet couldn’t care less – a tonne of CO2 is a tonne of CO2, regardless of who emits it.

But while the market got off to a strong start in the 2000s, 2012 saw a dramatic crash in the value of the credits, while integrity issues began to rear their head. The EU eventually decided it had had enough, and disavowed the credits for future use in the ETS – which has continued in the UK post-Brexit. More recently the voluntary markets (where for example do-gooding corporates purchase credits to show how green they are) have been in the news for all the wrong reasons, with similar allegations of over-counting (hotly disputed, it should be said).

✍️Dillon Smith

The Friedrich Merz approach to climate change – it's time to give carbon credits a chance and decarbonise cheaply

27/06/2025

Eventually, all governments run out of steam. No leader, no matter how powerful, no matter their past achievements, can stave off the inevitable.

Political scientists in America refer to the natural development of political fatigue as the ‘six year itch‘. After six years in office, the public’s growing dissatisfaction with the president, their party and their agenda, coincides with a midterm election during which the president’s party typically experiences significant losses in congressional seats.

While unconstrained by term limits, British prime ministers are subject to the same effects; even the most effective among them begin their decay between 6-8 years. Only the truly extraordinary can last more than a decade, and even they do so bloodied. Age wearies them, and the years condemn.

Historically, this temporal rhythm is accurate – but in recent years, the cycle of political decay has accelerated significantly.

Despite having been in post for less than a year, and despite being delivered to power in an election with a massive majority, it appears Keir Starmer is already approaching the Kali Yuga of his government.

Setting out to tackle Britain’s almost exponentially increasing welfare bill, Starmer had laid out a package of cuts worth £4.6 billion. But just a few weeks after refusing to change course on a growing rebellion among backbench MPs on tightened eligibility for Personal Independence Payment (PIP) and health-related Universal Credit, he has caved to welfare rebels and agreed claimants will keep their benefits, with only new claimants receiving the lower amount. The Institute for Fiscal Studies predicts the Treasury will lose around £1.5bn of the original £4.6bn welfare cuts package. The climbdown – his third high-profile U-turn in a matter of weeks following reversals on cuts to winter fuel payments and finally accepting the need for a national inquiry into grooming gangs – only serves to confirm the growing sense that Starmer’s Government is vulnerable to pressure. Smell-o-vision may never have succeeded, but the rancid stench of death has begun to pervade his every media appearance.

✍️Tom Jones

Labour have run out of steam – the Government's welfare reforms have collided with a grim political reality

26/06/2025

Just as reports emerge that China may lift sanctions on British parliamentarians – framed as a gesture of goodwill amid ‘warming’ relations – new evidence should trigger alarm bells. This diplomatic softening comes on the heels of the UK Government’s renewed effort to attract Chinese investment. However, as I detail in my recent report for the Henry Jackson Society, this façade of cooperation conceals a far more troubling reality: China’s artificial intelligence strategy poses an existential threat to democracy, not just in Asia, but also in the UK and across the West.

The report, ‘China’s Use of AI and Its Negative Impact on the World’, lays out in detail how China is leveraging AI not merely to innovate, but to dominate. Under the direction of the Chinese Communist Party (CCP), AI is being weaponised to control narratives, surveil citizens, undermine sovereign economies and erode democratic institutions through digital manipulation.

A particularly concerning example is DeepSeek AI, a Chinese-developed system capable of manipulating public discourse at scale. It does this by adjusting search results, generating AI-authored propaganda. DeepSeek is not some fringe experiment; it is Beijing’s flagship tool for narrative warfare, designed to drown out dissent, erase inconvenient truths, and inject state-sponsored misinformation into both domestic and global conversations.

What makes this especially dangerous is the subtlety. This isn’t the old model of censorship, where content is blocked or removed. It’s a new era of engineered perception where truth is buried not by force, but by algorithm.

The West, particularly the UK, must not be lulled into complacency by superficial diplomatic gestures. The lifting of sanctions on a few MPs is not a sign of reform. It’s bait. And if they take it and allow financial interests to blind them to the geopolitical and moral realities of Chinese AI, they risk empowering the very forces that seek to undermine global freedoms.

✍️M. Dane Waters

Chinese artificial intelligence is wreaking chaos around the world

26/06/2025

British businesses are under siege. Not from rivals or regulators, but from American hedge funds and their proxies.

There is something profoundly flawed with the UK’s class action system: it allows hedge funds in Connecticut to quietly bankroll lawsuits against British companies, while lawyers take home millions in fees, claiming they’re fighting for justice. It has created a legal free-for-all that is costing British businesses dearly.

That may sound hyperbolic, but it’s the reality, according to the Civil Justice Council’s (CJC) latest investigation. Their report exposed a system that has grown increasingly divorced from the interests of both victims and justice.

It couldn’t have been more timely. The UK is currently hosting the country’s largest-ever class action: the Australian mining company BHP is facing a £36 billion lawsuit brought by specialists Pogust Goodhead, on behalf of the American hedge fund Gramercy.

Class actions are legal proceedings in which multiple claimants with claims that share common characteristics seek a remedy against the same defendant. When used correctly, there is an opportunity to highlight a corporation’s failings.

Legitimate suits, like those on behalf of sub postmasters wrongly prosecuted by the Post Office, seek retribution for genuine harm. Other claims, however, exploit the current system. Some even concern actions that occurred overseas, but are brought through the UK’s justice system due to the favourable landscape.

✍️Matthew Bowles

Instead of R&D and business development, class action reforms have incentivised UK firms to invest in the expansion of their legal teams

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