Tony may love the capitalists, but thankfully Clare has kept cool

Those concerned for the Government's sanity should welcome Short's refusal to proselytise for business

ON SUNDAY evening I switched something on (it had been another hard day, and I can't remember whether it was the TV, the radio or, possibly even, the hairdryer) and heard the Kaa hiss of John Redwood urging that naughty old Clare Short be "disciplined" by the Government. Before I knew what was happening I was being plagued by unbidden mental images of a bare Clare, tied to a gym horse, being thrashed alternately by Alastair Campbell and Peter Mandelson, as Mr Redwood watched on, his thin lips set in (for him) a lascivious smile.

This may be, I agree, my problem; I cannot tell you why I associate John Redwood with sadomasochism, but I do. In this instance it could be because there was no good political or administrative reason why Clare Short should be ill treated, so I sort of assumed that the disciplining should be done for the pleasure of it.

Not that I cannot see what Mr Redwood was seeking to achieve. It is his main purpose to sunder the alliance forged before the election between business and New Labour - an alliance which threatens to keep the Conservatives in perpetual opposition. Redwood cannot woo business over Europe, because he is a Europhobe, and business swings mainly the other way. But everything else is grist to his mill, and he suspects that - for many Labourites - furthering the cause of free enterprise still feels uncomfortably like sympathy for the devil.

He has a point. I was 13 in 1968, and - for the next decade or so - I thought business sucked. We all did, us lefties. Our first objection was sort of political. I knew from Agitprop street theatre that businessmen were fat, dressed like pantomime villains, wore top hats with dollar signs on, watered the worker's beer and rubbed their hands. I wasn't aware at the time that, with the dollar exchanged for a Star of David, the same caricature had been made to do terrible service for a very different cause.

The main reason for our distaste for private enterprise, however, was social. It was uncool; no good characters in movies were businessmen. In The Graduate we lured daughters away from materialism, and in If we mowed down the establishment from the chapel roof. Flowers were what you took to San Francisco - not a franchise to sell hippy gonks at a discount. Alice's Restaurant was certainly a non-profit-making concern. Make Love not War, and definitely not Money. Our ambitions were to be rock stars, or failing that (less money, same nookie) - sociology lecturers. The kids who did aspire to join companies and become entrepreneurs were creepy, pale boys with glasses and repressive parents. Or, as PJ O'Rourke has pointed out, they were drug dealers.

For many years I was broadly in favour of anything that stopped business from happening at all. Strikes were great, pickets (especially flying ones) were romantic, works to rule a kind of poetic justice in which capitalism's own regulations were used against it. And while not everyone left of, say, Jeremy Thorpe necessarily bought the whole anti-business schtick, enough did to make Labour a tricky proposition for any self-respecting capitalist. Naturally, therefore, the Tories colonised private enterprise - their interests coinciding effortlessly.

And then we on the other side began to rediscover entrepreneurialism. The alternatives, never very promising, began to look worse. Sweden was as good as state socialism got - and even Sweden had Saab. And Ikea. Neil Kinnock met some millionaires and was charmed by their practicality and their success. These were, after all, people one could work with in order to provide full employment and a decent standard of living for all. If anything, as John Smith, Tony Blair and Gordon Brown found out, the other side of industry was a damn sight more flexible and dynamic than the trade union side. Pals became lovers.

The danger of new love affairs is always that infatuation will blur judgement. You try too hard to be the thing that the loved one desires - and at the same time, you gloss over his or her faults and blemishes. So a whole lot of wart-kissing goes on, and in the case of business this takes the form of forgetting a couple of important things: that business persons say they love competition, but would really prefer monopoly, and that seeing business as an end in itself, rather than as a means to an end, is a usually a disaster.

So those who had become concerned for the government's sanity because of its relationship with the Bernie Ecclestones and Rupert Murdochs of this world, have reason to feel very relieved by Clare Short's blunt refusal to proselytise on behalf of British business while on aid trips. It seems obvious that if aid is to be tied in any way to economic behaviour, then the sole goal of that pressure must be to assist development and the relief of poverty. What we "get out of it" (beside a warm glow) is not a contract here or there, but a world full of stronger, more prosperous trading partners. Short's strategic position - that aid should be conditional only on the appropriate policies in recipient countries - is immensely strengthened by her stand.

It is a paradox of the Tory view, as adumbrated by Messrs Redwood and Howard, that it supports the need for unfettered competition and free markets, while somehow believing that it is the Government's job to broker contracts abroad. This leads to the unpleasant spectacle of ministers creeping round the sheikhdoms in their socks, putting in a sly word for a small deal here, greasing a plump palm there - on the basis of "Britishness", not worth, or of insinuating to hard-up Africans that it might be nice if they could just see their way to favouring Dorking over Dijon. Is this not true "cronyism"?

Howard's law, as I heard it expressed yesterday, is that "they all do it." As with arms deals to unpleasant countries, if we stand aloof and refuse to back our boys, you can be sure that the French (in particular) will not be so scrupulous. Workers in Poitiers will laugh up their sleeves as factories in over-fastidious Albion close. The same reason (among several others) is given for refusing to extradite General Pinochet to Spain - we will lose Chilean trade. Sod the human rights, that's 20 jobs in the Midlands.

Strangely, this very pessimistic view of how world capitalism works reminds me very much of what I believed back in 1968, when I thought rich guys in black hats went around trampling on everyone's rights in pursuit of profit. But actually it derives from the narrowest possible definition of "interest". When President Calvin Coolidge opined that, "the business of America is business," as the country hurtled into depression, his mistake was to confuse means and ends. The business of Britain is making its current and future citizens happy. That purpose will not best be served by a deal here and a contract there, at the expense of human rights or a decent aid programme.