02/06/2017 07:23 BST | Updated 02/06/2017 07:23 BST

Has Toryism Really Come Out Of The Blue And Into The Red?

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Much has been made about how the Tory party election manifesto heralds a radical new era of Conservatism. Matthew D'Ancona thinks that it represents the most adventurous restatement of Conservatism since Margaret Thatcher. Larry Elliot interprets it as representing Theresa May's Clause IV moment. Its commitment to increased state intervention, in addition to May's pledge to be the "voice of ordinary working people once again", have even led some commentators to label her a 'Red Tory'.

Such judgements are based on states vs markets view of the world where less state equals more market and vice versa. Here, greater state-intervention is assumed to represent a more progressive form of politics than the supposed market fundamentalism of the Thatcher years.

The assumption that greater state intervention is somehow progressive is dangerously short-sighted. Under capitalism, all states intervene in the economy. In fact, as national economies become increasingly diversified and complex, there is a long term tendency for state spending to rise.

The degree of intervention and the amount of money spent by the state does not determine whether the state is progressive or not. What does is whether the intervention is designed to enhance the power of capital over labour, or to empower labour, in however small a way, vis-a-vis employers.

The balance of power between capital and labour can be assessed in various ways: by the laws that enable firms to hire and fire, versus those that protect workers' rights; by the division of wealth and income in society between capital and labour; by workers' degree of exposure to market forces versus their protection from such forces. Welfare has been one of the main ways in which states have protected workers' from the vagaries of the market.

Historically, states have invested directly in the economy, in collaboration with firms, and have facilitated private investment, in order to boost national economic competitiveness. Following the Second World War, for example, the Japanese economy was characterised by very high degrees of state ownership and direction of industry. Workers' organisations had been dismantled under American occupation, enabling the state and private firms to impose a very long and extremely intense working week upon labour, with very limited possibilities for workers to object to, still less to influence state policy.

When assessed according to these criteria the Tory party manifesto does not represent a progressive shift. In fact, throughout the Thatcher, Major and Cameron years, the British state had an active industrial policy. This is visible if we look at the management of the labour market, at national infrastructure planning and investment, at financial policy and at Welfare.

In terms of the labour market, the Conservatives sought to restructure it and to regulate very strictly workers' abilities to organise themselves collectively. From Thatcher onwards, numerous laws were introduced designed to limit workers' ability to strike, and to make it easier for firms to hire and fire. These laws, under the guise of increasing labour-market flexibility have contributed to a declining level of trade union membership, a rise of part-time and precarious work and falling wage rates. They have underwritten the falling share of national income to labour and a rising share to capital.

Since Thatcher's mass privatisation of British industrial infrastructure the political common sense is that private outclasses public. But privatisation has only worked because it has been underwritten by public subsidies. For example, in early 2017 the Northern Rail franchise was taken over by Arriva Rail North, itself owned by German state railways. It will receive £1.6 billion in government's subsidies during its 10 year contract. In 2014-15 the UK state invested around £3.5 billion into the privatised rail industry.

When we look at taxation policy, we see, a highly interventionist state, in favour of big business. In the financial year 2012-13, the government spent £58.2bn on corporate tax benefits, grants and subsidies. This corporate welfare regime consists of tax exemptions for research, direct government support and the lowest corporation tax rate of any G7 country.

The financial and banking sector has never been left to private hands. The UK State and the Bank of England responded to the 2007 global financial crisis by massive economic intervention. Between 2009 and 2012 these two institutions collaborated to create £375 billion of new money through quantitative easing: The Bank created vast amounts of electronic money to purchase government bonds and other assets.

Lastly, when we look at welfare provision we see a systematic attempt, since Thatcher, to reduce workers' access to free or cheap services. The latest phase, under the guise of austerity, looks set to continue for at least a decade.

What these examples of industrial policy have in common is their intention to boost firm profits. They are not designed to enhance worker's incomes, their bargaining power vis-à-vis employers, and certainly not their ability to influence either private or public economic policy. So is Toryism really coming out of blue and into the red? Well it still looks pretty blue to me.