Each day seems to bring another request from another part of the economy for a Government bailout. Latest to emerge yesterday was Tata, the Indian conglomerate that owns Corus, part of which in turn used to be known as British Steel.

Executives in the steel industry are desperately trying to cut capacity in line with rapidly falling demand as the world economy slows. They want to cut production by 30% between now and Easter, which means temporarily shutting plants.

The company wants the Government to pay the bulk of the cost of their employees staying at home doing nothing during this period. If the Government does not pay, the implicit threat is that said workers will have to be made redundant - some of them anyway.

Explaining the request, Corus chief executive Philippe Varin was quoted as saying: "We are looking for the Government to take swift and decisive action to mitigate the effects of the financial crisis on manufacturing industry."

That comment seems to beg a rather bigger question. Why is it the task of Government to try to mitigate the effects of the economic slowdown on companies? Isn't the point of capitalism that the state keeps out of the way, and companies succeed or fail by their own efforts? Is not that how the process works, and how the efficient survive and the poorly managed fail?

Obviously, the temptation is to ask for money because so much has been pumped into the banks. But there is a clear dividing line between Government funds shoring up banks to stop a collapse in the economic system and Government funds shoring up companies to shield them from the effects of the business cycle.

The risk of systemic collapse is highly unusual, and intervention is justified because a banking meltdown threatens everyone in the economy, not just the guilty bankers. Economic recessions, on the other hand, are perfectly normal and part of the overall economic cycle that well-run companies learn to navigate.

A company that fails because of the recession causes great distress to its employees, customers, suppliers and shareholders, but it does not threaten the entire system.

Moreover, part of having an efficient economy lies in letting nature take its course so that in bad times the weak businesses fail and the better-run gain their market share and grow stronger.

Supporting the weak so they do not go to the wall means the well-run do not reap the benefit of their rivals going bust. They fail, therefore, to get a reward for being better-run. In this way, propping up the weak handicaps the strong and weakens the entire system.

There will be a huge number of potential failures clamouring for aid as the recession bites - cases in which a seductively small amount of money would appear to be all that is needed to prevent a major calamity.

However, past experience shows it does not work like that - and that Government aid quickly becomes a drug which needs to be delivered in ever-greater doses.

Trying to stave off hard times for everybody simply does not work - it just delays the inevitable.

However, you can't blame Corus boss Varin for trying, any more than you can blame the chief executive of Vauxhall, the UK end of General Motors, for lobbying for Government aid last week to help save jobs at his plants.

But the person who should be supported is Industry Minister Lord Mandelson when he says that there will be no "blank cheque" to rescue troubled companies.

He should, however, go further and say there will be no cheque at all - even one where the numbers at first appear comfortingly small.

Bank account of shrinking value

An interesting email is flying around that puts into all-too-horrible perspective the collapse in value of the banking sector.

A little more than a year ago, Royal Bank of Scotland completed its purchase of ABN Amro with a consortium of RBS, Santander of Spain and Belgium's Fortis paying $100 billion, four-fifths of it in cash.

For that amount today, the consortium could buy Citigroup for $22.5 billion, Morgan Stanley for $10.5 billion, Goldman Sachs for $21 billion, Merrill Lynch for $12.3 billion (had it not been snapped up by Bank of America), Deutsche Bank for $13 billion and Barclays for $12.7 billion. And it would still have $8 billion in change.

I have not checked the numbers but they are near enough for it not to affect the point being made.

Doesn't this make the former shareholders of ABN Amro, sold out at the top largely against their wishes, the luckiest group in the world?