Our cover this week looks at the bossy state. As citizens demand action on problems from social justice to the climate, governments are directing firms to make society safer and fairer. Instead of controlling their shares and boards or acting as impartial umpires, politicians are becoming backseat drivers. As our special report on business and the state sets out, President Joe Biden is pursuing an agenda of soft protectionism, industrial subsidies and righteous regulation, aimed at making the home of free markets safe for the middle classes. In China Xi Jinping’s “Common Prosperity” crackdown is designed to curb the excesses of the country’s freewheeling boom and to create a business scene that is more self-sufficient, tame and obedient. The European Union is drifting away from free markets to embrace industrial policy and “strategic autonomy”. This bossy business interventionism is well-intentioned, but, ultimately, it is a mistake. Its adherents hope for prosperity, fairness and security. They are more likely to end up with inefficiency, vested interests and insularity. 

Boris Johnson looked wobbly as more evidence emerged of Downing Street’s disregard for stringent restrictions introduced early in the pandemic. In an excruciating appearance before the House of Commons the British prime minister struggled to explain why he attended a bring-your-own-booze get-together in Number 10’s garden in May 2020, when people were allowed to meet only one other person outdoors. He described it as a “work-related” event. Some MPs in his Conservative Party called on him to resign.

America’s annual rate of inflation jumped to 7% in December, its highest level since June 1982. Several factors are sustaining rising prices, including a tighter labour market. The unemployment rate dropped to 3.9% at the end of 2021; average hourly wages rose by almost 5%. Jerome Powell, chairman of the Federal Reserve, this week described inflation as a “severe threat” to the economy, and reiterated his commitment that the Fed is ready to increase interest rates, and at a fast pace if need be. “It’s a long road to normal from where we are,” he said.