Centre for Policy Studies
, Economic policy
, John McDonnell MP
, Margaret Thatcher
, Paul Goodman
, Press Releases
, Public Service Reform
, Public Services
, Sir Keith Joseph
, Trade Unions
Robert Colvile is Director of the Centre for Policy Studies. His new report ‘Popular Capitalism’ is published today and available at cps.org.uk.
“Like most of the rest of the Left, much of Labour seeks to delegitimise the Conservatives altogether – in other words, rob them of their right to be heard by suggesting that they are beyond the ethical pale.”
I was struck when I read those words by Paul Goodman on ConservativeHome this week – because they were almost identical to ones I had just written:
“Many on the Left appear to believe – and are eager to tell the world – that they have a monopoly not just on compassion, but basic humanity. To be a conservative, in their view, is simultaneously illegitimate and inhumane. It is to hate the poor and love the rich, to put profits above people, to be wrong not just on the facts, but in your heart. And the same is true of being a capitalist.”
That section comes from the introduction to a new essay, published today by the Centre for Policy Studies, called Popular Capitalism. It is my attempt to explain why support for the free market is not just pragmatic, on the grounds that it is the best tool we have yet found to create and share prosperity, but deeply moral – because it trusts people enough to give them more control of their own lives.
Thinking about this, it struck me that arguably the best path to convincing people of the merits of capitalism is to extent Vote Leave’s famous slogan – “Take Back Control” – to the domestic agenda. For politicians to make it clear that their priority is to promote ownership and opportunity, enterprise and aspiration.
The essay, of course, suggests concrete ways of doing this, based on our policy programme at the Centre for Policy Studies. We suggest raising the National Insurance threshold so that everyone gets the first £1,000 a month they earn tax-free; addressing public concerns over the fairness of the welfare system by ensuring that it treats you more kindly if you have proved worthy of trust; addressing the ownership crisis that scars our society by incentivising landlords to sell to tenants, and providing those tenants with the core of a deposit; and freeing small businesses from the burden of tax and administration by offering them the chance of paying a simple levy on turnover.
All of these policies are fully developed, fully tested and – according to our research – extremely popular. But they also say something very profound: that the politicians adopting them really are concerned about the many rather than the few.
One of the most alarming things about the current Labour leadership – aside from its attempt to elevate “Never kissed a Tory” into a principle of moral supremacy – is how adroitly it has stolen its enemies’ clothes. Popular capitalism, in its original form, was a brilliant Thatcher-era coinage, reflecting both the desire to widen participation in the economy (by giving people homes to own and shares to buy), and to make capitalism popular by proving that people could benefit from it.
Today, Labour talk relentlessly about ownership. But where Thatcher told people (rightly) that militant trade unions were preventing them from having the freedom to live good lives, John McDonnell tells people (wrongly) that “the Tories” and “the bosses” are doing the same.
Labour is selling its renationalisation plans, for example, as being about taking from “the shareholders” and giving to the people. To the many, from the few.
Of course, the devil is very firmly in the detail. Labour’s plans for employee ownership of companies, for example, turn out to involve a massive tax grab by the state – and a blocking vote for trade unions on corporate boards.
Or take the nationalised industries. These, Labour argue, should be run by a harmonious alliance of customers, workers (represented via their union leaders), the community (represented via council placemen or Left-wing activists), and the wise hand of government.
But what happens when these interests collide? What happens when the unions want a pay rise that is against the interests of the customers?
And what happens when the customer is dissatisfied? Under a nationalised system, they cannot take their money elsewhere. They have lost control in a fundamental way.
The moral of this story is that competition – in both public and private services – is not just good, but essential. Example after example shows that the key to driving up performance is to put power in the hands of customers and consumers. Because no matter how much you venerate doctors and nurses and teachers, the brutal fact is that any organisation run by human beings will – without a corrective mechanism – come to be run for the convenience of those self-same human beings.
In the two years since I took over the Centre for Policy Studies – the think tank founded by Keith Joseph and Margaret Thatcher – I keep coming back to those original speeches and pamphlets that set the Thatcherite agenda. And one of the most striking things is the moral streak that runs through them – especially through the speeches of Thatcher herself.
So often, she grounds her remarks in a point of moral principle, proceeding outwards to apply that principle to the political environment.
It is a style of rhetoric that sounds utterly alien to modern ears. But one of its main effects was that people very certainly knew who and what she was for. As she told her first party conference as leader: ““Policies and programmes should not be just a list of unrelated items. They are part of a total vision of the kind of life we want for our country.”
It is impossible to overstate the difficulties faced by Thatcher and those around her as they wrested the British economy on to a better course in the 1980s. The fact that Britain has a private sector that basically works, that it has millions more people in employment, that inflation has been tamed, that our lives are not disrupted by strike after strike, that we can afford to pay for our public services – all of these are ultimately down to the reforms she pioneered.
Yet in retrospect, it is clear that the reformers of those days had one under- appreciated advantage. If they wanted to show why they were right, they could simply say: “Look around you.” Their radical diagnosis of Britain’s problems could only be implemented because voters had lost all patience with the alternative.
Today, a free-marketeer invoking that phrase might seem, to harsher critics, more like Ozymandias, inviting those admiring his statue to survey what amounts to ruins. Or, to put it more prosaically, if people today see our society as capitalist, then they see the problems with it as the product of capitalism.
This is why defenders of capitalism cannot be satisfied with the status quo. They need to show how they can make people’s lives better – to accept that their problems are real, rather than telling them that they may not own a home, but at least they have an iPhone.
Arthur Brooks, the outgoing president of the American Enterprise Institute, has a beautiful way of challenging his fellow conservatives on this issue. Why, he asks, do you get up in the morning? Is it to entrench the power and wealth of those who already have power and wealth? Or is it to expand the power and wealth of those who do not have them?
If it is the former, he says, you are doing evil. If it is the latter, you are doing good.
All conservatives, in other words, need to dedicate themselves to giving people opportunity. To giving them ownership. To giving them control.
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