No. 10

Maybe they really were the good times. The last few years didn't feel like it, but at least the Government was subtle enough in its winner-picking that I would have to explain how its targeted measures were really supporting losers.

Now, our supposedly conservative and liberal government plans to pick its winners overtly and proudly.

Mr Cameron says that we need to target government support at “those industries where Britain enjoys competitive advantage”.

If they already enjoy competitive advantage, why should we tax industries with fewer advantages in order to support industries that don't need it?

The distinction between free markets and managed markets is, according to Dave, “a sterile debate between laissez-faire and hands-on government”.

What a pity Maggie wasted so much of her time on such a sterile issue.

“The question” he says “isn't 'Should government be involved?' - because it is involved. It taxes, it regulates, it invests. The real question is, 'What is the right kind of involvement?'”

i.e. “If I choose not to pick winners, I am effectively penalising them, so even non-intervention is intervention in my sophisticated, Oxbridge-addled, looking-glass world.”

Nick Monether of Greenfields Consulting has launched a petition on the No.10 website, to press the Prime Minister "to Adopt a Carbon Tax ratified and harmonised with the EU and the G20".

As the petition explains:

"The tax payer and/or energy consumer is currently paying to subsidise low carbon technology through a variety of levies and subsidies that share no common price for their efficacy in reducing carbon (or C equivalent) emissions. A well designed tax on carbon emissions, in concert with internationally agreed application methodology, would deliver huge cost and carbon savings to society, with parity and without excessive and costly bureaucracy. We the undersigned urge Government to press to replace costly local, regional and national policies with a global approach that reflects the unity achieved in the removal of CFC emitting products."

There are many details not covered in this petition, but that is the nature of an online petition. I understand that Nick wanted to add a detail that I suggested (to address many people's fears with regard to the impact on "fuel poverty"), but the system wouldn't let him.

Fundamentally, carbon tax is the best way to internalize carbon externalities, and showing support for the principle is important. If you would like to see our myriad nit-picking, micro-managing, counter-productive, bureaucratic, supposedly-green interventions replaced with one simple mechanism that applies equally to all carbon emissions regardless of source, then sign up to this petition now.

• £150m (almost half the total cost of the scheme) for the M80 PFI scheme in Scotland
• £500m as a starter for the M25 widening, with possibly more to come.

It is not clear how these projects meet the EIB's objectives, but very clear how they meet the Government's political objectives. How much money is being laundered through the EIB to bail out the Government's favourite projects and corporate friends?

It seems I am not the first to notice that the EIB is being used primarily to bail out projects favoured by its shareholder-governments, most of which have little relevance to the supposed objectives of the bank. See CounterBalance and CorporateWatch.

With a few exceptions contemporary commentators on economic problems are advocating economic intervention. This unanimity does not necessarily mean that they approve of interventionistic measures by government or other coercive powers. Authors of economics books, essays, articles, and political platforms demand interventionistic measures before they are taken, but once they have been imposed no one likes them. Then everyone - usually even the authorities responsible for them - call them insufficient and unsatisfactory. Generally the demand then arises for the replacement of unsatisfactory interventions by other, more suitable measures. And once the new demands have been met, the same scenario begins all over again. The universal desire for the interventionist system is matched by the rejection of all concrete measures of the interventionist policy.

So wrote Ludwig von Mises in his 1929 book, A Critique of Interventionism. He could have been writing of the state of our political and academic debate today.

The Sunday Telegraph reports that "Gordon Brown is drawing up plans to vary the minimum wage region by region across Britain". The original intervention - a standard minimum wage for the whole country - has been judged by academic economists to be too blunt an instrument. Although the call is for more flexibility, the proposals are not simply to remove or reduce the minimum wage. Instead, they propose that we should tell each region the level of pay below which jobs should not be offered. That's an interesting definition of increased flexibility.

What the academics intend is that the minimum wage should be reduced in those parts of the country where a national-average minimum wage exceeds the level at which people might be willing to work and able to sustain a reasonable quality of life (though this is made literally and figuratively academic by the punitive nature of the means-tested withdrawal of nationally-harmonised benefits on the effective marginal rate of taxation). The objective is to allow some jobs to be created or legitimised, which currently cannot be afforded in compliance with the law.

Gordon, however, cannot reduce the minimum wage in those parts of the country, because the unions will not wear it. So it is suggested that, instead, he will raise the minimum wage in London and possibly the South-East. Because, from a socialist perspective, this is not about allowing people to find jobs, this is about micro-managing the economy to ensure that no one is getting more or less than they deserve.

The result, if implemented, will not be an increase in flexibility and the creation of jobs in areas of the country where costs-of-living are lower, but a reduction of flexibility and the destruction of jobs in areas of the country where costs-of-living are higher. Genius.

The Tories and LibDems, of course, now support the minimum wage too. I wonder what new interventions they will be drawing up to offer their refinements on this "improvement", and what all three of them will propose when these changes also fail to deliver the artificial boost to the incomes of poorer members of society that they all hoped they could compel by legislation, in contravention of the most basic laws of economics. It's so much better fiddling with this sort of superficial, bureaucratic, managerialist, economically-illiterate tinkering than actually doing something about the structural problems, most of which the politicians themselves have created, isn't it?

There are many things in Gordon Brown's statement of constitutional issues to be developed by his Government, The Governance of Britain, that are more dangerous than the flying of the Union Flag. For instance, take the statement that one of the ideas "at the heart of British citizenship" is "that there is an appropriate balance to be drawn between the individual’s right to freedom and the collective good of all" (para 204, p.60). At first glance, it doesn't sound controversial. Of course we do not have complete freedom to do what we like, and must constrain our behaviour to avoid harm to others. As Justice William O. Douglas put it: "My freedom to move my fist must be limited by the proximity of your chin."

But this statement subtly extends that consideration in a way that has significant ramifications. It is not harm to another that is the constraint in Gordon's scheme, but "the collective good of all". This offers much more scope for governments to decide that freedoms may be limited for the "general good". In fact, one would find that all authoritarian and totalitarian governments would argue that their measures had been justified because they were in the interests of the "collective good".

There is a long tradition of debate on this issue, and it will no doubt continue for a good deal longer. But Gordon is objectively wrong on one aspect - this is not an idea "at the heart of British citizenship". At the most, the question of whether the rights of the individual supersede those of the collective remains unresolved in Britain. I would argue further than that - that Gordon's approach is an (admittedly, well-established) European cuckoo in the British nest; an attempt to shoehorn continental, Rousseauian and Napoleonic collectivism, into British Lockean, common-law, Enlightenment individualism.

We should not conceed this starting-point to Gordon. If we do, it is just a question of the degree of state intervention that is justified in the collective interest, a subjectivity that will always be abused by governments wanting to inflict their views on us. We must argue over the principle, not the detail. Or we end up in the position of the attractive girl propositioned by George Bernard Shaw to sleep with him for a million pounds, who, upon indicating that she might, was asked if she would sleep with him for five pounds. Offended, she objected "Sir, what kind of woman do you think I am?" Shaw replied, "Madam, we have already established what kind of woman you are. Now all we have to do is haggle over the price."

Britannia is not that kind of woman, I hope.

Gordon Brown has played the jingoistic card, by promising to review the regulations governing the flying of the Union Flag on public buildings. The Sun's George Pascoe-Watson, not surprisingly, over-reacted with delight, proclaiming that Gordon wanted to see the flag "flutter in Whitehall and around the country every day", and offering free flags to readers who sent in a stamped, addressed envelope, or Union-Flag "screensavers" (actually background images, but we shouldn't expect accuracy from The Sun) to download. The document on which Mr Pascoe-Watson's reporting was based (The Governance of Britain, published by No.10 yesterday) says very much less than he claims, promising only to "consult on altering the current guidance that prohibits the flying of the Union Flag from Government buildings for more than 18 set days in the year".

Perhaps Mr Pascoe-Watson is projecting, or perhaps he was briefed. Whichever, the inflation of this modest proposal has ignited debate, for instance on BBC Radio 5Live today, about the merits of flying our national flag. People seem to focus on whether it is British to display our national pride in such a vulgar way, and whether they are inclined to fly the Union Flag, or the flag of their respective regions (England, Scotland, and Wales - the issue is altogether more tricky in Northern Ireland, as the Government's document notes). This seems to me to miss the point.

I could care less how you choose to display your national pride - proudly with a Flag of the Union, St George, St Andrew, the Red Dragon or whatever outside your window, or quietly through deployment of the British characteristics of understatement, scepticism, humour, stoicism and so on. (Actually, that's not entirely true - I'd prefer the latter, but it really is up to you.)

But I do care about the conflation of the nation and the state. These are our national flags, not our governments' flags. The state (pace Rousseau) is not the embodiment of the nation, though one can see how Gordon might find much in common with that other Chancellor (of Gilbert and Sullivan's Iolanthe):

The law is the true embodiment
Of everything that's excellent
It has no kind of fault or flaw
And I, my Lords, embody the law.

Too close association of nation and state has always been a mark of despotic government. If flying the Union Flag becomes an important symbol of patriotism, and a Union Flag waving by the front entrance becomes a hallmark of all government buildings, it is not a long step for some people to make the association that disrespect for and resistance to what is done within those buildings is unpatriotic. At the least, it gives spurious legitimacy to those activities.

Most people, being sceptical Brits, will not be that simple. But let's not give the idiots the excuse. Wrapping the state in nationalist garb is not very British.

And by the way, what happened to Gordon's incredible promise to put an end to spin?

Who is Mr Blair trying to kid? Yesterday he unveiled a swath of policy initiatives covering compulsory uniforms for punishment in the community, greater private sector delivery of welfare, personal carbon budgets and a switch in funding from national Muslim groups to smaller local groups.

Just stop it! Your time is up; no-one is listening. Stop wasting time and money unveiling so called initiatives when all that is going to happen is Gordon Brown is going to succeed you, completely ignore what you have said and pursue other ways to spend our money. You may think that you are going out with all guns blazing and laying down your legacy, but the truth is you are smouldering out and you blew any chance of a decent legacy many years ago. If you must hang on to power and really want to make a difference in your dying months – do nothing. Absolutely nothing. It would be the most productive few months of your premiership and set a real legacy that Mr Brown would be wise to follow.