Britain unleashed: it's not money that matters This was not just high theory. It was literally to do with the price of bread. The Corn Laws, which were introduced at the end of the Napoleonic wars and finally abolished more than 30 years later, kept the price of wheat high. The supposed justification was that these controls produced agricultural stability. This served the landed interest that dominated Parliament. The modern versions of this privileged group are Greens, who complain about "our obsession with cheap food." The effect was that the poor could not afford bread. In one of those great debates of the 1840s, the Free Trade leader Richard Cobden stood up in the Commons and asked by what right it dared to decide what bread should cost: "Is this House a corn-market?" It was disgraceful, he said, that Parliament was seeking "to legislate for a class against the people." The Conservative Party, which supported the Corn Laws, was "composed of monopolists" of corn, tea, sugar, timber, coffee - and of the franchise. The Commons that night was surrounded by police because of the presence of a huge anti-Corn Law crowd. In those days, the people understood that, without free markets, one can (as actually happened in Ireland) starve. Cobden's mention of the franchise was crucially important. Free markets were part of wider emancipation, and were widely seen to be so. If every man was a merchant, in Adam Smith's sense, then he owned a stake in his country, and so should be allowed to choose the people who made that country's laws. Britain was moving towards votes for all. The repeal of the Corn Laws, once the Tories under Robert Peel had finally shown the sense to back it, worked. Far from blindly destroying all social bonds, free markets enabled people to engage more successfully in the essentially cooperative activity by which one person says, "I have got X to offer," another says, "I have got Y to offer," and both agree a price. As people got richer, they could achieve more. "It is not a potato-fed race," said Cobden, "that will ever lead the way in arts, arms, or commerce." Better-fed, freer, and with cheaper energy sources than the people of other countries, the British of the High Victorian era did not merely get rich. They produced political institutions, mutual societies, banks, architecture, social housing, newspapers, arts, trains, medicine, ships, clubs, trade unions, inventions, colleges, schools, organised sports. It helped that many of their greatest industrial and social pioneers were from the "non-conformist" churches - Methodists, Quakers, Unitarians. They believed in social order and moral duty but, being excluded from the Anglican Establishment, knew that the existing order was not necessarily the best. Far from being a god in itself, the market was an institution under God, like all others. It should be easy to understand why benefits resulted. What, after all, do you have if you don't have free markets and free enterprise? You have unfree markets and very little enterprise. With those, come economic stagnation and political oppression. If production is dictated by a command system, freedom decays. People are prevented from doing what they are good at. Someone else - politician, Whitehall official, eurocrat - knows best. Why Britain shifted away from the success it had so clearly achieved is a huge and complicated historical question. It is something to do with the fact that we were overtaken by nations - the United States, Germany - beating us at our own game. Once you have won your laurels, you tend to rest on them. When others start to win them, you affect to despise the prizes that you now find harder to attain. It also has much to do with the suffering and disillusionment inflicted by two world wars. But the 21st-century disillusionment is a bit different. In the 1980s, free enterprise triumphed and socialism was defeated. After this triumph, however, not enough people thought about what free enterprise meant. Everything came to seem too easy. A culture grew up, particularly in finance, in which making lots of money for yourself became the chief index of success. New Labour fostered this culture, confusing the virtue of business success with the vice of sucking up to big businessmen. Other cultures - that of the civil service and of charities and universities - lost confidence and started mimicking the language and style of business, thus compromising their doctrine of duty. Big business, forgetting risk because of a boom that lasted too long, became boastful, monopolistic, overpaid and skilled at manipulating government for its advantage (think of PFI). It also became less interested in the customer. If you watch The Apprentice, you note how contestants drone on about "personal goals" and swank that they are tougher than anyone else. None tries to show that he or she is good at working with others for the long term, or providing people with goods or services which they actually want. Rather as war films have become more and more violent as there are fewer and fewer people alive who have actually fought, so the world of business has become more egotistical and swaggering as the true rigours of the market have receded. And then there is the problem of size. Most business innovation starts very small - in a garage or, with more power to women, at the kitchen table. In Britain, this has got much harder. Taxes, unhelpful banks, employment laws, health and safety, forms, planning, and the terrifying fact that bureaucrats have all the time in the world whereas, for the small trader, time is money; all these raise the price of entry. They therefore crush innovation. They also alienate people. They make people feel that business is out of their reach, and therefore nothing to do with them. When people come to believe that, it is self-fulfilling. Markets really do cease to be free. Tomorrow: where will we find the next generation of entrepreneurs?