Monday, 19 April 2010

Let's raze the whole edifice to the ground

Another excellent article from Critical Reaction, this one from Mark Littlewood, Director General of the Institute of Economic Affairs.
None of the three main parties have yet to properly address the elephant in the room. And it’s a £170 billion elephant. That’s the approximate size of this year’s budget deficit. On top of an overall debt that is set to accelerate beyond a jaw-dropping figure of £1 trillion.

Such horrific numbers require considerably more surgery in the public sector than is being countenanced by anyone likely to serve in the next British cabinet. Amongst politicians of all stripes there is a growing, albeit often begrudging, acknowledgement that the nation’s finances are in a sorry state, but there is no seizing of an opportunity to fundamentally change the way we do things.

It’s here that liberal free marketeers need to truly find their voice. Because although no party is running on a classical liberal platform in this election, the need to make the intellectual case for less government and more freedom is going to become increasingly important in the months and years to come.

Necessity may – to some extent – become the mother of invention. The prevailing social democratic consensus could soon reach breaking point because of a simple lack of funds. An ever-growing array of government programmes reliant on squeezing still more support from taxpayers - or funded by yet more borrowing - is simply becoming unsustainable.

But proponents of free markets need to show not merely that free markets are necessary, but that they are actually more desirable than the state-run alternatives. It is here – in public relations terms at least – that supporters of markets have sometimes allowed themselves to be boxed in. If arguments between social democrats and classical liberals are couched in terms of the former defending the interests of the poor – or even the ‘average’ family – and the latter defending the vested interests of the rich, then – whatever the merits of the liberal case, the social democrats are likely to prevail.

Free marketeers need to show that the welfare state and a growing public sector sphere are not in the long term interests of the overwhelmingly majority of British citizens.
He concludes:
Let’s not trim, or even slash, a list of specific government programmes. Let’s raze the whole edifice to the ground and start from scratch.

If we did so then it’s hard to imagine that we would countenance a public sector that consumed much more than 30% of GDP.

Tragically, instead of this approach, we face a choice of parties who essentially seem to disagree on whether the proportion of national income spent by the state should be 49%, 50% or 51%. That does not provide much ground for optimism - whichever shade of social democracy ultimately triumphs at the polling stations on May 6th

I thoroughly recommend the whole article.

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