August 8, 2022
Tories risk forgetting rich tradition of economic thinking

The author is a former senior advisor to UK Chancellor Philip Hammond and Sajid Javid, partner at Flint Global; He writes in a personal capacity

Boris Johnson’s government has basically been “non-conservative”. That’s the impression the Tory leadership has faced so far. Essentially, the most successful leader of the modern Conservative Party, Margaret Thatcher, has dominated the debate.

Everything we’ve heard is only a partial reflection of his philosophy: Tory Grandees lined up to remind contenders his opposition to cutting taxes when inflation is on the rise Is. Furthermore, the debate ignores the very rich history of conservative economic thinking.

Conservative economics has declined and flowed over the past two hundred years. The liberalization agenda of Robert Peel in the middle of the 19th century came under suspicion. laissez faire, With the rise of Labor the party shifted to defining itself as against socialism, but in the period after 1945 the Tories still made peace with the welfare state and presided over a mixed economy. It was only under Thatcher that rolling back the state became central.

However, this development should not be confused with a lack of principles. Throughout time, the four basic tenets of conservative economic thinking have persisted. First, conservative economics has been pragmatic, skeptical of ideology, and based on realism. Conservatism has rejected intellectual rigor, instead addressing the issues of the day.

Second, it has welcomed economic change, both for the progress it can provide and what is necessary to ensure political and social stability. The task is to manage change carefully with a proper appreciation of how people and communities should be protected.

The third key principle is the belief in the need for prosperity and the opportunity to be widely shared. This formula follows from Benjamin Disraeli’s recognition of the dangers of “two nations”, rich and poor. Harold Macmillan The acceptance of conservatism’s “obvious duty” to sections of society that are not participating in economic progress.

Finally, there is the role of the state. Yes, conservatives have always viewed ultra-powerful government with caution – but this should not be confused with small-state liberalism. The conservative approach has been to view the state as an enabler rather than a controller of economic activity.

These principles must now be applied to the challenges ahead. In the short term, this means managing the huge jump in inflation and the slowdown that follows. Furthermore, the next prime minister should keep his eyes on the long-term challenges. Given the recent anemic development, planning to maximize this should be an absolute priority. But a proper conservative is a realist and must acknowledge that even the most spectacular execution can still see the economy growing more slowly than before, held back by inevitable structural factors. An aging population, drastic shifts toward more services, and retreating globalization. Therefore, the pursuit of development cannot be used as cover to avoid difficult decisions elsewhere.

In particular, low growth means two more challenges already facing the UK are likely to intensify. Income levels and regional inequality in the UK are high by both historical and international standards. History tells us that less development tends to see more intense fights over distribution, which increases the urgency of the issue. Low growth also means that structural pressure on public finances cannot be ignored.

To address growth, inequality and the financial challenges ahead, today’s conservatism will have to adapt once again; But it should be based on long-standing orthodox principles, not hollow promises of partial imitation of Thatcherism.

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