A recent Yougov poll found that most people think that people out of work should not be able to afford smartphones, takeaways, visits to the pub or pets. This is not just evidence of their mean-spiritedness, but also of their anti-capitalist attitudes.

I say so because of a basic economic idea - the circular flow of income. Out-of-work benefits are not so much payments to people as payments through them. They are payments to Greggs, Primark and Aldi and other places where recipients spend their money. Just as there's tax incidence, so too is there benefit incidence. The beneficiaries of benefits are those capitalists and employees who sell to the unemployed.

In this way, benefits serve several useful functions.

One is that they help to stabilize demand and cushion us from recessions. Monetary and fiscal policy cannot do this simply because, as Prakash Loungani has shown, recessions are unpredictable. The best such policies can do is hasten the recovery. To moderate the downturn we need automatic stabilizers of which out-of-work benefits are one. This matters, because stability tends to boost investment, as Nick Bloom has shown.

Secondly, such benefits subsidize and hence facilitate the creative destruction which is necessary for higher productivity. When benefits are mean we see more violent opposition to redundancy plans; less geographical mobility because people want to stay close to family and friends who could support them in hard times; and people being loath to move into potentially good but insecure jobs. In all these ways, out-of-work benefits help increase labour mobility.

To see a third benefit, imagine out-of-work benefits were increased. Recipients would probably not spend much of the extra on gas and electricity, but would do so on little treats - better food, a night out and suchlike. More spending on "luxuries" would therefore help increase the size of the competitive sector of the economy relative to the monopoly sector. It would support entrepreneurs against rentiers. That's good not only for allocational efficiency but also for dynamism and growth.

And for something else - the legitimacy of capitalism itself. An economy dominated by rentiers and monopolists is one that will struggle to justify its existence. One that can plausibly claim to give people what they want at reasonable prices has less difficulty.

In all these ways, intelligent capitalists favour reasonable out-of-work benefits. It's no accident that, in many countries, they were introduced not by leftist governments but by pro-capitalist ones.

Of course, against all these advantages must be weighed two potential drawbacks.

One is that when we are near full employment such benefits must be paid for by taxes or cuts in other parts of government spending, and those taxes would curb demand for the outputs of the competitive sector.

I'm not sure this is a grave problem though. If instead benefits were paid from a clampdown on procurement and subcontracting costs, the competitive sector would benefit relative to the extractive rentier sector. You might not like Tim Martin's politics, but a healthy economy has more Wetherspoons and less Capita.

A second possible drawback is that higher out-of-work benefits could reduce work incentives. This, however, is not a knock-down argument. For one thing, we could get people into work by making them fit to do so, for example by reducing NHS waiting lists. For another, work incentives are about the gap between out-of-work and in-work incomes. If both of these rise so that the latter remain well above the former, work incentives remain strong. And for another, a tight labour market should be a good thing as they encourage firms to economize on the use of labour by investing or improving working practices.

My point here is that you don't need to be a bleeding heart lefty to favour decent benefits for the unemployed. In fact, they are in the interests of capitalists (and people in work) themselves.

Which poses the question: why then, as that Yougov survey showed, is there such hostility to them?

One answer is overconfidence; people in work don't expect to lose their jobs, and so regard out-of-work benefits as payments to others rather than as insurance for themselves.

Another answer, I suspect, lies in reference group theory. We compare ourselves (pdf) to those around us, so many people on low incomes resent benefit claimants more than rich bosses - a resentment reinforced by our tendency to hate being thought of as mugs.

Whilst these might help explain popular antipathy to benefits it doesn't explain the Tories' hostility. Instead, this lies in a nasty fact, that there's something the right loves more than capitalism, and certainly more than free markets - hierarchy and inequality. As Corey Robin wrote:

The conservative defends particular orders - hierarchical, often private regimes of rule - on the assumption, in part, that hierarchy is order. (The Reactionary Mind, p24)

Decent welfare benefits undermine hierarchy. And for many on the right, defending inequality is more important than promoting well-functioning market capitalism.