Capitalism is OK

Conference season is now over and clear divisions have emerged between the two main parties; cradle-to-grave statism versus free market economics and capitalism. I’m not going to deny it; Labour’s rise under Jeremy Corbyn has spooked the Conservative Party, every presumption that most of us share about the world; its rulebook and its ideological outlines are being challenged. Today’s voters have benefited from the fruits of globalisation, technological revolution, population mobility and automation but they also want a government that will speak to and act against these crashing forces in their lives.

            But does Labour have the answers? I really don’t think so. There will be an enormous bill for Mr Corbyn’s profligacy if he gains power. In fact his policies will actually wreck livelihoods, heap on debt and leave a long repair job for our children. Of course working Britons crave an end to wage stagnation but it should not come from extra borrowing or taxation. It must come from improved productivity. And how do you get that? Targeted training and investment, but that investment must be funded by growth. Capitalism is the ultimate growth engine and we, as a party, need to shout that from the rooftops. And if you don’t believe me look at the figures; capitalism has lifted a billion people out of poverty since 1990, and 500 million in China alone. Inequality has also fallen in Britain.

The crash was significant in that it pointed to the urgent problem of recapitalising the banks, tightening lending rules and rebalancing the public finances, and a lot of this has been done by my party but there is much more we can do, for example, shame those capitalists that have damaged the brand; managers in privatised monopolies such as utilities companies that have been overpaid, tech companies who operate globally but are taxpayers of nowhere, Corbyn is right here, for too long we have tolerated such behaviour. These problems are often global, as are the solutions.

I agree there is still much to be done to soften the effects of globalisation but producing fantasy economics for a standing ovation is not one of them.