This episode, however, does more that merely corroborate the old jibe that, in a financial crisis, everyone’s a left-winger. It makes us ask: what’s the point of stock market capitalism?
The Treasury’s move is a recognition of the fact that governments can provide more and cheaper finance than the private sector.
But if the stock market is bad at providing finance - in the US, it has for years been a way for companies to give cash to investors rather than vice versa - what can it do?
It's not obvious that stock market ownership is suitable for industries vulnerable by virtue of their political sensitivity to changes in taxes or regulation. For example, the threat of a windfall tax on private utilities might depress investment. In this sense, nationalization might be more efficient than private ownership.
Nor does the stock market impose a discipline upon companies via the threat of takeover. Recent research confirms that inefficient firms are no more likely to be taken over than efficient firms.
With this discipline lacking, quoted firms are frequently badly managed. The experience of retailers confirms this. Whilst employee-owned firms such as John Lewis and Waitrose thrive, the shares of several quoted retailers have been falling for years: DSG, Debenhams, HMV for example. Which suggests, again, that markets are sceptical of the merits of stock market capitalism.
Academic research corroborates this. It shows that employee share ownership can raise productivity - which suggests that, at least within a certain range, outside ownership reduces it.
Of course, there’s a huge objection to all this - state-owned firms are hideously inefficient. But the reply to this was made by John Stuart Mill:
Now, of course, I’m not arguing here for nationalizing everything. The point is that we should ask a question: what is the most efficient form of ownership and control? The answer to this will vary from business to business. But could it be that, in many cases, the answer will not include external shareholders?