Wednesday , June 19 2024

This is what real Conservatism looks like

Liz Truss is attempting to rescue both Britain and the Conservative Party by a supply side revolution involving massive tax cuts. Suddenly after years of Tory centrism and wet mush we have got Friedman and Hayek back as the philosophy behind Kwasi Kwarteng’s thinking. It is not so much quasi-Conservatism as the real thing.

This ought to work. If you believe in free markets, indeed if you believe in capitalism then it is really basic stuff that lowering taxes and shrinking the state will lead to growth. The problem is time.

We have about two years to turn things around. At that point there is going to be a General Election with a task only half done. The voters will have to have faith in Friedman and Hayek even though they have never heard of them. Most probably voters are going to have to feel just a little bit better than they do now and have a sense that we are going in the right direction.

The Left including Scottish nationalism is going to throw everything they have at Truss, because hers is a revolution that if given the chance will change everything.

There was no going back to the 1970s after Thatcher and the Berlin Wall came down. Instead of the Heath Wilson socialist double act we ended up with Blair and Cameron two sides of the social democratic coin. That consensus continued until yesterday. Now ideology is back and the difference between Truss and the Left becomes obvious and massive.

The point of lowering the size of the state is that socialism doesn’t work. Governments spend money less efficiently than the people who earn it.

Where I work the department has a budget. If you spend less than your budget you get less next year, so as the deadline approaches you buy anything, not caring if it is useful. You are spending someone else’s money anyway, not your own.

People are motivated to study and work because they want to earn money that they can then spend on themselves and their families. No one works to pay for the NHS even if they like the NHS. No one works to pay taxes.

If you lower taxes people will work harder and the money they earn will be spent more efficiently than if the Government spends it.

This works except for one thing. Jealousy.

In your work if your colleague gets a pay rise and you don’t what do you feel? Be honest. Most people feel jealousy. Your income stays the same. You haven’t lost anything, but you resent that your colleague now gets more.

This is the heart of why people oppose free markets and capitalism. Some people work harder, some people are more talented or cleverer or can kick a ball better than others. It is not fair.

In ancient times I might work harder to make clay pots than my neighbour, but he might be more talented and people want to buy his pots rather than mine. I earn less than he does. I resent him. I invent a system where he pays more tax than me so we end up earning the same. This is called socialism.

But if a talented maker of clay pots earns the same as a mediocre maker, why be talented? Why work hard if the result is the same? It is for this reason that Left-wing thinking depresses economic growth and the Soviet Union could not compete economically with the West.

Inequality is the foundation of capitalism, without it there would be no incentive to work and work harder. But many of us are uncomfortable with this idea, not least because the Left argues not merely for equality of opportunity, but for equality of outcome.

But this is our problem. If we all live in ancient time and we are making pots, or tools, or growing grain, what happens if the Government decides to pay everyone a universal basic income. Perhaps I am not very good at making pots or growing grain, but now that the Government pays me to do nothing I needn’t bother. But then those who are growing the grain see me doing nothing and reflect why should I work hard every day while my neighbour is idle? But if the farmer chooses universal basic income too, who grows the grain?

Free market capitalism in its earliest form works because the poor know that if they don’t work, they don’t eat. This is the ultimate incentive to work and it applies still in most countries of the world. Even in Eastern Europe today where there is a minimal welfare state people without work do not starve, but rather do anything.

This is the part of the revolution that Truss still needs to push through. Growth is hindered by taxes that are too high, but it is also and equally hindered by welfare being too high.

No one questions that those who genuinely cannot work should be given enough to live especially if they are old or sick or disabled. But in Britain vast numbers of people choose to be idle even though they could work. If all of those people who could work did so we would be able to cut government spending on welfare and increase economic activity leading to economic growth.

The way to encourage people to work is to make benefits such that they do not discourage people from seeking work. But the Left just as it encourages ever higher taxes, also encourages ever higher benefits. The endpoint of this is that we pay 100% tax and all of us are on equal benefits called universal basic income. At this point we would have genuine starvation and call it our socialist paradise.

There is no starvation in Britain. I can go to Aldi and buy a bag of potatoes, a bag of lentils, plus whatever vegetables are on sale with a cheap cut of meat and make enough soup to feed a football team for a few pounds.  There may be children who are malnourished because their mothers feed them crisps and Irn Bru, but the issue here is not financial, but educational.

There is no more inefficient method of trying to help poor people than donating food to food banks. There are no foodbanks in Eastern Europe, no one starves there. No one starves here.

Foodbanks merely encourage welfare dependency by making living on benefits more pleasant. People who might have looked for a job if they only had benefits get the equivalent of benefits in kind that encourage them to do nothing. Giving to food banks doesn’t help these people. It hurts them.

The best way to help poor people is to get them to work. The level of benefits ought to be such that people want to cease receiving them and instead receive a pay check.

We have forgotten the basics of capitalism in Britain. We have come to expect the Government to solve all our problems and pay all our bills. But this will make all of us poorer in the end, especially the poorest.  Social democracy leads merely to decline, laziness and inefficiency. Public services and welfare depend on growth.

The Left will resist Truss with everything they have, because if it can just be proved that lowering taxes and getting people off welfare makes all of us wealthier then who will listen to Starmer or Sturgeon? Give real Conservatism a chance and we will destroy the Left.

This article was first published here.

About Effie Deans

Effie Deans is a pro UK blogger. She spent many years living in Russia and the Soviet Union, but came home to Scotland so as to enjoy living in a multi-party democracy! When not occupied with Scottish politics she writes fiction and thinks about theology, philosophy and Russian literature.

Check Also

The War on the Moon

There was a time when the HG Wells story ‘War of the Worlds’, made into …