I’ve read Kwasi Kwarteng’s surprisingly positive review of my book, Crack-Up Capitalism. Although it was unexpected to see someone from the libertarian corner being so enthusiastic about what is clearly a critical book, the experience was not new. After my previous book, Globalists: The End of Empire and the Birth of Neoliberalism, was published in 2018, I was startled to find Deirdre McCloskey, a leading classical liberal historian, praising the book as a manual for ‘keeping a liberalism which has made us rich and free.’ Globalists explained how neoliberals wanted to keep decision-making from democratic electorates. I took McCloskey’s praise as a validation of my core thesis.

If it’s bracing to see a neoliberal academic concede that democracy is not, in fact, particularly important to them, to have an elected politician say something similar is even more surprising. Kwarteng’s review provides what is effectively a summary of my book, more or less without judgment. It begins jarringly with the Dutch consultant Albert Winsemius’s advice to Lee Kuan Yew to ‘eliminate’ the communists after the founding of the independent Singaporean nation, and ends with Kwarteng asking whether, as ‘crack-brained’ as they seem, we can really dismiss the book’s anthology of libertarian schemes so quickly in a time of ‘anaemic growth’. ‘The road map to reaching utopia,’ he writes, ‘is quite complicated.’

A curious omission in Kwarteng’s précis of Crack-Up Capitalism was the role of his own party in pursuing the agenda of what I calls ‘perforation’ – the creation of different ‘zones’ to help economic development. The book’s second chapter is built around how Chicago School economist Milton Friedman inspired Margaret Thatcher’s first chancellor, and Kwarteng’s predecessor, Geoffrey Howe. In 1978, in the Waterman’s Arms pub on the Isle of Dogs, Howe explained to a group of gathered Tories that the isle could become a second Hong Kong, a city Friedman had lauded as ‘capitalism in action’. Howe argued that a Thatcher government should ruthlessly copy the model: ring-fencing patches of territory in Britain’s inner cities, selling off publicly owned land, eliminating rent controls, suspending planning oversight and cutting all but the most basic safety regulations. ‘We must restore the legitimacy of becoming rich,’ he said.

Howe’s vision was made reality in Thatcher’s first budget, which promised eleven ‘enterprise zones’ and two ‘free ports’. More were added through the 1980s, and expectations were high. The historian Paul Johnson called the enterprise zone a ‘dagger aimed at the heart of socialism.’ The outcome, though, was rather less swashbuckling. Experts concluded that rather than boosting growth or jobs, the miniature extraterritorial spaces simply shifted around investment. The only one that succeeded, Canary Wharf, did so through the old-fashioned transfer of state funds in the form of subsidies and tax breaks for private developers, alongside the generous provision of new infrastructure like the City Airport and the Jubilee Line.

The fact that was perhaps too depressing for Kwarteng to include in his review was that, in large part, it is the very same sites targeted by Howe, and the very same proposal for reinvigorating a moribund post-industrial British economy, that is all the Tories have to offer today. A policy idea that has been around for almost as long as we two Gen Xers have been alive now constitutes the meagre puddle of gasoline left in the tank of the Conservative imagination.

To find their way back from the political wilderness, the libertarian wing of the conservative party, including Kwarteng, will have to finally leave Hayek Island.

Rishi Sunak has been huffing on these fumes for years. He wrote about the benefits of freeports in a report for the Centre for Policy Studies, a think tank, in 2016, and made it a centrepiece of the recent budget – itself a humbler version of Kwarteng and Liz Truss’s own mini-budget from a few months earlier. Some people have been peddling the panacea of economic zones for nearly half a century. Eamonn Butler, co-founder of the Adam Smith Institute, helped promote the idea in the era of Thatcher and Howe. Four decades later he sat on Boris Johnson’s advisory board as the former prime minister tried to do the same thing. Butler felt that zones never went far enough. ‘Freeports will not work unless you treat them as foreign territory,’ he said in 2019. ‘Our freeports are only going to work if we think of them as being little offshore islands.’

Alongside the crown colony of Hong Kong, Kwarteng highlights the importance of Singapore in the imagination of those who hope that the zone strategy will help keep local government, planners, and organised labour at bay long enough to draw in foreign capital. As many have noticed, what is fascinating about Singapore is that it circulates in multiple forms. Adapting the saying that inside every man lives two wolves, one could say that inside every Tory lives two Singapores. What we could call Singapore One channels the moment of decolonisation, when Lee put his confidence in the resource and fitness of his people, and after crushing the communists, as Kwarteng notes, remained plugged into the patronage networks of the British and American military, and courted new investors to take advantage of an expanded industrial plant and low wage labour force.

But there is a second Singapore, the one better understood by the erstwhile adviser to Boris Johnson, Dominic Cummings, who devoted several pieces on his Substack to the recap of Lee’s memoir, From Third World to First. Cummings limned the virtues of what I’ll call Singapore Two. This version is less about faith and more about the role of the state – building a sovereign wealth fund, providing for citizens through publicly-owned housing and a Central Provident Fund, investing in R&D, enhancing military preparedness, all while drawing on a vast reservoir of surplus labour from the region brought in on basis of hire-and-fire-and-deport. Access to a disposable non-citizen labour force is a core part of the ‘crack-up capitalism’ described in my book.

One could argue that a more effective version of Conservative rhetoric would embrace a proactive role of the state. Johnson won in 2019 on a platform of ‘levelling up’. Jeremy Hunt’s new ‘investment zones’ are actually much more based on a Singaporean idea of supporting productive R&D than one might think at first. Thatcherite coelacanths may still think of free ports and zones as little offshore islands but they would be better thought of as engines of state capacity that hopefully have multiplier effects in growing, creating and discovering new market niches. They should draw in, not exclude, local communities and authorities.

To court Singapore Two, however, would be to bid farewell to the libertarian fantasies documented in Crack-Up Capitalism. It would be to realise the final fallowness of a doctrine premised on unrealistic ideas of individualistic action, and severed from reality. Perhaps nothing encapsulates the fantasy that I described in my book more than what was marketed by one libertarian entrepreneur during the pandemic as a ‘Hayek Island,’ effectively a steel pole stuck into the bed of the Caribbean Ocean topped by a steel womb-like enclosure (‘sea pod’) within which the hyper-wealthy would recline, presumably flipping through glossy lifestyle magazines on Herman Miller sofas lit by soft LED light. These are the fantasies that still circulate in the world that Kwarteng casts as a potential site of inspiration.

To find their way back from the political wilderness, the libertarian wing of the conservative party, including Kwarteng, will have to finally leave Hayek Island – and with it Winsemius’s fantasy of vaporising the leftist opposition – and find their way to the mainland with all its messiness and interdependence. For their sake, I hope that day comes soon, but I am not holding my breath. The lens flare of libertarianism might be too mesmerising for them to look away.