Five hundred years after Luther, we need our own economic Reformation

It’s 500 years since Martin Luther launched his protest against the corruption of the Church and little could he have imagined its staggering economic consequences. A vast transfer of wealth from the Church to the secular authorities followed, prompting a shift in the choices people made. Forward-thinking students at universities soon realised that a religious career (becoming a monk was once among the most popular options for graduates) would be far less lucrative, so switched en masse to more worldly – and arguably more useful – subjects. Who said incentives don’t work?

Five centuries later, we need another Reformation. Not, obviously, in any religious sense: to thrive following our own break with Rome, our iconoclasm must be economic. Once again, we need a massive transfer of wealth, but this time from the state to the people.

After the privatisations of the Eighties and Nineties, most assume that the government holds few assets beyond those necessary for delivering public services. Not so. The state has huge holdings in everything from farmland to garages, motorways to business parks. Much of it is held by local authorities: according to Lord Adonis, shockingly, Southwark council in London owned as much as 43 per cent of the borough as recently as 2015.

There have been moves to offload some of this, but a great deal of it remains disastrously misused. To take one minor example, in 2012, each central government worker had 16 per cent more office space on average than their private sector peers, and the figure has fallen only marginally since. On a global level, one estimate suggests that proper commercial management of state assets would see them yield an extra $2.7 trillion a year.

Obviously we’re not going to sell off all of Whitehall, but there is a huge prize to be had from shifting more of this wealth into the hands of those who can make better use of it. A construction renaissance, particularly of the administrative buildings that enabled Protestant nations to become effective, modern states, followed Luther’s Reformation. The benefits today would include substantially more house-building, enough cash to slash the national debt, and if we were brave enough to admit that state ownership of the road network has been a disaster – an easier case to make following this bank holiday – a more responsive transport system.

The most important opportunity, however, could be cultural. Unlike the sales of BT and British Gas – which transformed the efficiency of those firms, while empowering a new generation of small-scale capitalists

– I doubt selling off fields, roads, or buildings would be popular. Neither was much of the Reformation, initially.

Nevertheless, if any new wave of privatisation could avoid the problems that plagued the sale of the rail industry, taking power over swathes of Britain from distant authorities could help turn the anti-free market tide. Everyone is asking why people should be capitalists if they lack capital. They would be better able to do so if the state stopped hoarding so much of it.

Once again, we need a massive transfer of wealth, but this time from the state to the people