It is natural that workers in the public sector seek to weaken the law of the jungle in their state-funded workplace as best they can, but it must be remembered that the jungle is still where wealth is created.

It cannot be allowed to open up a gulf in remuneration, security and work conditions which causes resentment in that part of the economy that must produce the wealth to keep things going. It is unimaginable that any private business should say to its workforce, ‘don’t bother attending the office for the seven weeks before, during and after the Olympics. Do it all from home!’ But that is what is proposed for no less than 400,000 civil servants working in Central London.

This kind of disconnect with reality speaks volumes. Not even communist Chinese economics came up with such a ludicrous suggestion at their own Olympics.

There are two worlds which exist within our country: one of them is the closeted world of the public sector and the other is the brutal world of the private sector .

The Victorians had two guiding principles: sound money and a small, non-intrusive state. They ran the civil service with 4,000 against today’s 500,000.

They ran India with 1,000, spent 2% of GDP on Armed Forces which controlled half the world and all its oceans. Such was their power that they imposed the Pax Britannica which lasted a hundred years. It was only the second universal peace since Rome’s famous Pax Roma. They were stunningly successful in almost all their endeavours – except for one: they did not care sufficiently for the poor and disadvantaged. But even here, they began to develop a conscience.

Prompted by the evangelicals and people like Dickens, they began to mend their ways and see that their Christian beliefs did not sit properly with the squalor to be seen on their streets. So little by little, welfare became an issue.

By 1945 it became the lodestar which governed all state thinking. Armies of bureaucrats came forward to administer the new system (armies of what, when I was doing national service, were known as malingerers) also came forward with their hard-luck stories.

So at the very time that wealth creation was being relegated, the welfare state was being elevated. In the end, the welfare state became insupportable.

If this recession has served no other purpose but finally to get us to see all this then it will not have been in vain.

Of course, we must continue to do our duty by the disadvantaged, but we face a hard task in winkling out the malingerers.

Almost all of the third world countries must go down the road we went in taking better care of their people – but if they are wise they will learn from our mistakes.

As it is, at the moment, they enjoy a huge advantage over us competitively in that they do not carry the huge expense of even a limited welfare state. That, together with much lower wages, makes it next to impossible for the West to compete.

But their peoples are already demanding – and getting – increased pay packets; they are also demanding better work conditions and welfare for the disadvantaged – all of which will cost money.

When we have eventually completed the much harder task of convincing all our able-bodied people who presently feel no conscience about not working to work, there will be a meeting point at which we will all be competing on a substantially more level playing field.

This scenario has already been played out in several former third world countries such as Japan, Taiwan, South Korea and Singapore. They were all once undercutting us wholesale, and it will be the same with China, India and Brazil.

There are penalties with being an innovator – the first in the field in any activity. Inevitably you make lots of mistakes; but those coming later can take advantage of what you got wrong as well as the much greater number of things you got right. Once of the reasons Germany created the as successful an industrial model as it did was because it was able to avoid making the same mistakes we did.

One of those was with its technical colleges and apprenticeships. They elevated distinction on the factory floor; doctors of engineering and the sciences were as highly regarded as doctors of medicine in Britain and the landed gentry. There was not the same prejudice against those who got their hands dirty as opposed to those who kept them clean, as there was in Britain. Your smart boy was as likely to head for the factory as he was for the professions.

It is easy to forget that as little as 10 years ago Germany was being talked about as the sick man of Europe, having taken our place pre-Thatcher. But then she set about freeing up her labour markets and keeping down costs, including labour. Result: Germany über alles. And we must do the same.

The newly released Beecroft Report must be acted on. If we want jobs, we must make it as easy as possible for firms to hire, and that has to include the right to fire. No employer gets rid of a worker who is an asset to their company, and workers must know that their best protection is to be so. Only the skiver needs to fear, and why shouldn’t he? He won’t turn around our fortunes.