Despite the 2017 Conservative manifesto, there is nothing ideological about the market economy — except in the sense that it is a form of freedom, an idea that most of us value. Including Margaret Thatcher, who would rightly always speak of freedom and the rule of law, a combination even more important than democracy itself. And of course the rule of law is vital to the free market.

The success of the free market is, in a sense, Darwinian: a matter of survival of the fittest, as rival systems have been tested to destruction. And the most fundamental reason why this is so is that the most basic fact of economic life, as indeed of all other dimensions of life, is that we are all fallible.

We all make mistakes, and always will. Markets make mistakes, and so do governments. Businessmen and bankers make mistakes, and so do politicians and bureaucrats. Thus any attempt to construct a system which will eliminate mistakes is doomed to failure. All we can sensibly do is put in place a system in which mistakes are soonest recognised and most rapidly corrected. That means, in practice, the liberal market economy.

By contrast, experience shows that, whatever the political system, it is governments that find it hardest to own up to mistakes, still less to correct them. And this is supported by another fact of life. We are all subject to self-interest, businessmen and bureaucrats alike. But whereas, as Adam Smith explained, the market economy is the means by which self-interest produces public benefit, this is less clear in the case of bureaucratic self-interest.

It would be remiss to close this section without referring to the searing experience of the banking meltdown of 2008, which has been held to discredit both the free market economic system in general and the deregulation agenda of the Thatcher government in particular. Both charges are false, and it is instructive to understand why. As I have explained, the great merit of the market economy is that it is the system in which mistakes, which we all make, are soonest corrected. They are corrected either because of the fear of failure, or by the fact of failure. But in banking, we have allowed there to be institutions that are considered to be too big, to complex, and too important to be allowed to fail. That is the root cause of the disaster, and it has not yet been removed.

It is not the market economy that is to blame, but the fact that the banks are not fully part of it. As I have argued elsewhere, a major structural reform is needed, one which has yet to take place.

As for the claim that the deregulation agenda of the Thatcher government was somehow responsible, that is even more absurd. In the first place, this was not a British event, although we were harder hit than many as a result of the unusual importance of the banking sector to the British economy, but a global financial crisis whose trigger was the sub-prime mortgage market in the United States. Britain does indeed enjoy a measure of global influence, but to suggest that we were responsible for that is ludicrous. In the second place the disaster occurred almost two decades after the Thatcher government had come to an end, during which time politics, policies and indeed banking had significantly changed.