For 30 years politicians have dodged hard questions about our economy. Now the Tories are promising to use magic to fix the problems
Boris Johnson’s latest attempt is classic political economy. Faced with the chaos of petrol shortages, empty supermarket shelves and soaring gas prices, Johnson this week offered a cheeky answer: it was all part of a plan. Britain, he explained, was simply moving from a broken economic “model” based on low pay and high immigration to a new one based on high productivity and high-paying jobs.
His conference speech was immediately criticised by the right on the grounds that by praising the tightening of the labour market he seems to be actively inviting inflation. But on a basic intuitive level, which Johnson is only talking about, he seems to have got away with it. He has announced that the most unpleasant conundrum of British economic policy in recent decades – sluggish productivity growth – will simply be solved as if by magic.
Whether or not we agree with the Adam Smith Institute that his speech was “economically illiterate”, Johnson’s newfound interest in economic “models” tells us something about how this strange new party of Conservatives operates. Just as importantly, Keir Starmer – unlike his two predecessors – has shied away from discussing the state of British capitalism. The terms of the political debate seem to have changed.
To some extent Johnson has ploughed the usual Conservative furrow. The insistence that apparent economic failures, by contrast, are only a symptom that the cure is starting to work is strongly reminiscent of the turbulent early years of Margaret Thatcher’s rule. In 1981, Thatcher was famously criticised by 364 far more prominent economists than the Adam Smith Institute in a letter to the Times condemning her attempts to fight inflation with punishingly high interest rates.
Thatcher portrayed herself as a stern nurse, painfully weaning a patient from his addiction to inflation. Johnson, by contrast, believes that Britain now needs to shed its dependence on foreign labour. Regardless of the obvious damage the Conservative Party does to business or GDP, there is something about its status in British public life that gives its leaders the right to talk about the essence and direction of capitalism against all economic logic and indicators.
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