Let capitalism devour itself

On the face of it, London mayor Ken Livingstone's trip to the World Economic Forum at Davos this week sets the seal on his ideological odyssey. Red Ken, the man who once argued that capitalism was directly responsible for more deaths than was Hitler, is off to pay homage to Coca-Cola, Google and the high priests of global finance. But back in London, Ken could be seen as playing an altogether different game: impeding globalisation and, with it, the future of socialism.

That might sound a bit cockeyed, so let me explain. The proposed take-over of the London Stock Exchange by the US-based Nasdaq is an open and shut case of self-devouring capitalism. Rightly, City minister Ed Balls has recognised it as such, and refused to intervene. To block the bid, he told an audience of bankers, "would have flown in the face of the traditions that have underpinned the City's success".

By contrast, Livingstone has opted for protectionism with his demands for inquiries and competition reports. Ken might do better to follow the teachings of his pre-Davos hero, the great communist connoisseur of free markets, Friedrich Engels.

As a Victorian mill owner and textile merchant, Engels was highly adept at following share prices and international markets. Based in Manchester through the 1850s and 60s, he was a regular at the Royal Exchange as the price of cotton rose and fell during the turbulent years of the American civil war. And while numerous textile concerns went to the wall, his own firm of Ermen & Engels remained remarkably solvent.