Capitalism

Party conferences are an opportunity for reflection. They provide a chance to lift our eyes beyond today’s latest parliamentary skirmish and survey the broader political landscape. There is a lot to take in.

Consider this week’s sobering report from the Legatum Institute. It shows that popular support for capitalism, especially amongst those aged under-40, is close to breaking point. When asked, only 8% of the public now believe that capitalism ‘delivers for most people’. Only 7% believe capitalism works ‘for the greater good’. These are astonishing statistics.

For those of us who count ourselves as One Nation Conservatives, believing passionately in the twin pillars of enterprise and social justice, how should we respond?

First, it’s about time we started making the arguments about the perils of the alternative. Simply mentioning the 1970s, as if it will elicit a collective shudder, just doesn’t wash any more. My generation and below have no memory of the three-day week. We haven’t experienced working by candlelight. We haven’t seen rubbish piled high in the streets.

So we need to spell out what hard socialism means for ordinary people. Because prices and wages are essentially set by naked political power and not economic realities countries can be brought to the brink of ruin. In the UK inflation reached 26.9% in 1975. We experienced a brain drain, as our best teachers, scientists and entrepreneurs fled Britain’s high tax rates. We were the sick man of Europe, believing we could borrow our way out of any problem. But we couldn’t of course, and instead suffered the ignominy of the Labour Government going cap in hand to the IMF for a bail-out.

And we see this today too. Socialist-led Venezuela, a country with vast untapped natural resources, is now so grindingly poor that its people go hungry. Inflation is over 1,000% and the economy is in free fall. That is not progressive. Nor is it social justice.

None of this means, however, we can simply go on as before. Our enterprise economy needs significant reform. I believe we need to embrace a Roosevelt-style New Deal for the next generation. That means more affordable housing in the right place. It means more action to address some of the most obscene pay differentials. It means better paid jobs. It means restoring the ability of workers to access justice in employment disputes instead of being shut out by sky-high court charges.

So dismantling our free enterprise economy would be a disaster. But if we refresh, renew and reform I am certain our best days can lie ahead.