Podcast Summary: The Peter McCormack Show

Episode #138 – Steve Baker – The Structural Failure of Government
Date: January 5, 2026
Guest: Steve Baker (Conservative MP, libertarian-leaning politician)
Host: Peter McCormack
Co-host: Connor

Overview

This episode delves into the deep structural flaws of modern government, focusing on the British system but exploring universal themes of state power, economic failure, fiat money, and the frustration of citizens and politicians alike. Steve Baker, appearing for the third time on the show, shares candid insights into government dysfunction, the nature of state incentives, and why political participation and constraint on power are crucial if change is possible. The conversation is frank, sometimes bleak, but ultimately looks for a path toward renewal—be it policy-driven, procedural, or, as Baker concludes, something deeper rooted in societal values.

Key Discussion Points and Insights

1. Managerialism and the End of an Era

• Historical Context: Post-WWII, both UK and US societies embraced "managerialism," believing life could be improved by centralized, expert management (03:00).
• Baker’s View: “After 50 years of currency debasement… society's not working, and the problem cannot possibly be because taxes are too low, because there's too little regulation...” (Steve Baker, 02:51)
• Crisis of Interventionist Socialism: We're witnessing the failure of “backdoor socialism”—government expanding via debt and regulation, not overt ideology (02:20–03:30).

2. Institutional Failure: Left, Right, and Consensus

• Both left-leaning and free-market-inclined voters “are all pointing at the same problem—we have an institutional failure.” (Peter, 04:25)
• There’s broad agreement on the diagnosis: stagnating living standards, unaffordable housing, economic injustice (04:25–05:14).
• Disagreement is over the remedies and mechanisms for change.

3. The Reality Inside Government

• Competence and Incentives: Baker describes government as designed to “cope with ministers who are disinterested and incompetent.” (Steve Baker, 07:50)
• True focus of politicians: “The one unifying goal… is to basically be elected and be reelected.” (Peter, 09:11)
• Perverse Incentives: Once elected, the system rewards pandering to special interests for votes, not public service or structural reform (10:55–11:30).

4. Participation vs. Apathy

• Baker shares how a handful of people can control a political party’s candidate selection: “I could have been removed that day by a handful of people…” (Steve Baker, 13:15)
• The danger: non-participation is itself a form of consent to the status quo.
• Quote: “If you don't vote, you still get governed… so how do you get a decent government?” (Steve Baker, 21:58)

5. Parliamentary Sovereignty, Broken Promises, and Recall

• Elected governments routinely break promises, leading to frustration and disengagement.
• Baker advocates for “full unrestricted recall of MPs… if 10% of the electorate said Steve Baker is recalled… you'd face a by-election.” (Steve Baker, 15:37)
• Currently, recall is so restricted as to be meaningless.

6. Constraints on Power, Money, and the State

• Modern democracies lack real constraints—especially fiscal ones.
• Historical Reflection: American Founding—debate between Federalists (strong government) and Anti-Federalists (liberty, constraints).
• “If you constitutionally could not create money… you are restricted.” (Peter, 26:11)
• Fiat money and money creation are the root of many problems: “Elastic money is a folly… it's a crime.” (Steve Baker, 26:27)

7. Fractional Reserve, Free Markets, and State Overreach

• Even monetary scholars disagree, but Baker advocates “separation of money and state” and openness to alternatives like bitcoin and gold (27:29–28:32).
• Politicians follow, rather than lead, public opinion—making deep reform elusive.

8. Factions, Preference Groups, and Polarization

• When governments allocate money and rights based on interest groups, factionalism and polarization are inevitable.
• “What you do is create the factionalism problem that Madison warned about…” (Peter, 29:29)
• These swings—from right and left—may eventually lead to violence if left unchecked (31:12–31:52).

9. Dangers of Polarization and Breakdown

• Paul Dolan’s work on overcoming hate cited as a way to reduce destructive polarization (31:52–33:08).
• “History has shown us that civilization is in fact much more fragile than is generally thought.” (Steve Baker, 34:34)
• Real societal risks: youth unable to afford homes, rising discontent.

10. Constraints on Power—Practical or Illusion?

• Baker insists “we do not have enough liberty… we are not in a crisis of freedom, we're in a crisis of control by the state.” (Steve Baker, 41:10–41:12)
• Taxation and public spending are at historic highs; to rebalance, “we will have to cut spending in places which people will feel.” (Steve Baker, 41:44)
• Systemic change is inescapably painful, requiring public consensus, political leadership, or possibly a “reset.”

11. Revolutions, Resets, and The Limits of Protest

• Hostile to violent revolution, Baker is cautious about resets: “Once somebody starts doing that, then I find an old retired colonel's writing to me saying the police should be opening fire… whoa, whoa, whoa. Stop, stop, stop.” (Steve Baker, 45:51)
• The practical mechanism for change—peaceful, procedural, and participatory.

12. Equality, Preference, and The Social Fabric

• Baker and McCormack debate preference in welfare, legal, and political systems.
• “A policy of absolute non discrimination by the state would go a long way to constrain power…” (Steve Baker, 51:39)
• Equality of opportunity, not outcome, is the ideal; state preference via identity leads to backwardness and radicalization (53:13–54:30).

13. Economic Injustice and The Collapse of Social Mobility

• Personal anecdotes: today’s youth, earning more than previous generations, can’t achieve their parents’ standard of living (56:09–58:01).
• Baker blames monetary debasement: “A mortgage for half a million pounds for the ground floor… oh, you poor thing. A mortgage…” (Steve Baker, 56:54)
• State growth, through fiat expansion, crowds out ordinary aspiration.

14. Media, Narrative, and The Role of Ideas

• The media are complicit, focusing on trivialities instead of hard questions: “Why is it me, Pete from Bedford with a podcast, who's going, hold on, something's not working here…?” (Peter, 63:54)
• Baker’s “Fighting for a Free Future” project aims to reach opinion formers, especially journalists.

15. Strategy for Change: Cautious Optimism, Practical Participation

• Baker: “I've been through it. I've been there. Five general elections, 14 years… It is not a strategy of hope to be in the room to speak and to vote. That is how power is exercised and removed.” (Steve Baker, 79:33)
• Only widespread, meaningful participation will change party candidate selection and outcomes.

16. Deeper Solutions: Love, Dignity, and The Limits of Power

• Baker ends with a theological reflection: The Bible’s key message is “power does not work to set society right… Christ told us what that way is. It's love.” (Steve Baker, 80:46–82:59)
• He admits that while secular solutions may be insufficient, the idea of loving one’s neighbor—the “gospel”—is the only ultimate answer in a complex society.

Notable Quotes & Memorable Moments

• On managerialism’s failure:
  “[We’re] at the end of a kind of a century of managerialism… This is now a crisis of the interventionist form of socialism, backdoor socialism…”
  — Steve Baker (02:20–03:20)

• On what unites politicians:
  “It is to basically be elected and be reelected. So it’s the accumulation and the defence of power…”
  — Peter McCormack (09:11)

• On political participation:
  “The trouble with non-participation is… even if you do… Someone else is in the room trying to remove them, and if you're not there… they'll be removed.”
  — Steve Baker (13:18)

• On recall of MPs:
  “I always have been… in favour of unrestricted recall with an appropriately high threshold… all you’d have to do… contribute to recalling your MP… go along to the council office and put your name in the book…”
  — Steve Baker (16:48)

• On money and power:
  “If you constitutionally could not create money, just imagine that scenario…”
  — Peter McCormack (26:11)

• On polarization and violence:
  “These extremities, these swings to the extreme I think eventually will lead to violence. That is my big fear…”
  — Peter McCormack (31:48)

• On public opinion and politicians:
  “Politicians try to get re-elected by following public opinion. They're not really leaders, they're followers.”
  — Steve Baker (28:32)

• On monetary debasement and modern life:
  “Monetary debasement for me is cowardice. It's spineless. It's preference. It's a power games.”
  — Peter McCormack (58:24)

• On the solution:
  “The lesson is: power does not work to set society right… Christ told us what that way is. It's love… we've got to conduct politics on a secular basis, but for me as a Christian… this is just going to keep on rolling on until we give up on the idea that law and power will set society right.”
  — Steve Baker (80:46–82:59)

• On the importance of action:
  “It is not a strategy of hope to be in the room to speak and to vote. That is how power is exercised and removed.”
  — Steve Baker (79:33)

Timestamps for Key Segments

• Managerial Revolution & Crisis of State Power – 02:00–03:30
• Political Incentives & Insider Stories – 07:43–13:18
• Voter Participation and Selection Process – 13:18–15:14
• Parliamentary Recall and Broken Promises – 15:37–18:58
• Constraints on Money, Founding of America – 24:26–28:32
• Factionalism, Preference Groups – 29:29–31:52
• Polarization and Fragility of Civilization – 31:52–35:02
• On Economic Injustice – 56:09–58:01
• Strategy, Revolution, and Skepticism – 68:33–73:18
• Media’s Role and Need for Deep Questions – 63:54–64:53
• Conclusion (Biblical Reflection on Power and Love) – 80:41–83:11

Flow & Tone

The conversation is blunt, passionate, and laced with frustration, humor, and a sense of profound concern for the country’s trajectory. Both host and guest are unafraid to criticize the system and themselves. Steve Baker blends political realism (and some hope!) with libertarian skepticism and personal honesty, while Peter McCormack channels grassroots anger and a desire for meaningful agency. The tone stays accessible, with practical anecdotes and historical references woven into a narrative about the persistent failure of government structures—and the need for radical, peaceful rethinking.

Takeaways

• Government’s flaws are not just party- or policy-specific, but structural and deeply embedded.
• Money creation (fiat, debt expansion) is a central source of distortion and injustice.
• True change is only possible by constraining government power and incentivizing participation.
• Polarization and factionalism are real dangers—the solution must be both structural and cultural.
• Action is necessary: through participation, advocacy for constraints on power, and changing public opinion.
• At root, a society built on dignity, justice, and mutual respect is essential—perhaps even more than new laws.

End of Summary