by Paul Goodman
"So much for the narrow party politics of her words. But what about the content of the claim itself? Was May right to suggest that free markets, the small state, low taxes and light regulation – the Anglo-Saxon model of capitalism itself – doesn’t always work? I believe she was, for three main reasons.
The first can be found by looking at post-war history. The fastest period of western economic growth was during the 1950s and 1960s, when Keynesianism was the norm, rather than in the 1980s and 1990s, by which time monetarism had replaced it. This is not to say that the former – especially in the vulgar form to which it had degenerated by the 1970s – is better than the latter, but rather to make a wider point. Post-war capitalism produced a mass of good blue and white collar jobs. These were well-paid enough to fund a “family wage”. Many men were earning wages high enough for many women not to need to work in the labour market at all. Living standards rose across the board.
In short, what was most decisive was not just economics, but culture. New technology, innovation, products and invention were producing these jobs – in oil, cars, agriculture, consumer goods. Free market enthusiasts will claim that it was the market itself that produced the culture. But if true, this raises an uncomfortable follow-up question. Why are similar jobs not being created now in the West on the same scale, despite the fact that the Keynsian consensus was overthrown long ago? Here in Britain, nationalised industries are fewer, there are no prices and incomes policies, tripartite planning is no more, and so on."
Theresa May is absolutely right in contending smaller government is always best. There is a place for an interventionist state.