I would hope that, as the recessionary dust settles, there’s no return to business as usual. Plenty of risks have indeed been taken in the recent past, and that is in some ways why we are where we are now in terms of credit, in terms of property speculation, stock-market speculation and so forth. That’s really why we, as taxpayers, have had to step into the breach. So, I do think the idea that the Brits have always been cowering in their burrows and not taking any risks is a little bit wide off the mark.

What future for business? What future for business risk-taking? What future for business supervision?

I’d start from the other side of the telescope and ask what is business? What do we mean by business? It seems self evident in a way. It’s the non-state, voluntary bit of the economy: Large corporations, small medium enterprises, partnerships, sole traders. Plus a few gray areas: law firms, schools, private- medical, dental and veterinary practices and so on. The latter do seem to straddle the boundary of the two sectors but, by and large, when we say business we know what we mean, don’t we?

I don’t think so. I’ve long rejected this conventional view, as has my co-author Larry Elliott. Before suggesting what sort of risk and innovation business ought to undertake in a post-recession environment, and what sort of scrutiny and regulations ought to be imposed, I’d like to distinguish what I see as two different types of business.

The vast majority of enterprises in this country have few or no employees. They either don’t enjoy limited liability or, if they do, it’s worthless because the banks and their trade creditors will insist on the dreaded PG, which has nothing to do with tea bags and everything to do with personal guarantee, that actually voids the protection of limited liability. Of this, a majority of businesses maybe half make either no real money or actually run at a small loss. Only about half are consistently profitable. That to my mind is the private sector. I’m happy with it, I rejoice in it, I support it, I think it has social and economic value but it is very, very different from what I call the public/private sector.

These are the business organisations that, as we’ve seen in the past 18 months to two years have been too big to fail. I don’t just mean banks. These organisations could never have reached a tenth of their present size without genuine gifts from the rest of us.

Limited liability for all big incorporated companies allows them to walk away from their debts. Fractional reserve banking, which applies mainly to the financial institutions, allows these companies to conjure money up out of thin air. It also allows them to turn to the taxpayer in bad times and insist that, as they are so vital to the financial system, and the economy, the risks they have taken must be underwritten by us.

These are absolutely enormous privileges. They’re not like copyright or contracts or laws against fraud; those all are a bit complicated but they have their roots in an everyday understanding of right and wrong. No, limited liability, and so on, are very specialised privileges which, although they may be necessary for large-scale undertakings, encourage such entities to take enormous risk and then allow them to come to us when it all goes wrong. I think this has been proved in the last two or three years to be quite wrong.

Imagine Bill Gates or any other tycoon in a world without limited liability. They might be hugely rich but their fortunes would always be at risk. I can’t see huge international entities like Starbucks or McDonalds in a world without limited liability. We might have rather more family-owned cafes as we used to have. It’s the difference between a merchant prince and a vast self-perpetuating economic organisation.

So I think, if we accept this distinction, it becomes clear that issues of risk and innovation ought not to be considered in relation to scrutiny and regulation. They are separate cases.

A real private sector ought to be able to do pretty much as it likes. No one unit is big enough to cause serious trouble. No one unit is too big to fail. I think regulation of the risks should only apply to their products. In other words, if someone is making jam yes food and hygiene regulations should apply to their jam. I don’t believe that they ought to be regulated as companies. They are small self sustaining businesses. But with the larger ones, I am in favour of quite strict regulation. I think we’ve all seen what went wrong when we didn’t regulate properly.

Dan Atkinson is economics editor of the Mail on Sunday. This is an edited transcript of a speech given at the spiked/CMP event, ‘What future for business’, held on 7 July.