How to make the case for capitalism

Theresa May © Rex Features
May must woo the young with free markets

Last week, at the Bank of England, Theresa May “had a go”, says Philip Aldrick in The Times. This Monday, at the Tory party conference, it was Chancellor Philip Hammond’s turn. “The defenders of free-market capitalism are having to mass ranks, because, remarkably, an economic system that has delivered vast wealth across the West, doubling living standards in the UK over the past 40 years, is under attack.”

A poll by the Legatum Institute last week found that most Britons favour the renationalisation of railways and utilities and see capitalism as “greedy, selfish and corrupt”. Capitalism is no longer “celebrated” for raising all boats, but “denigrated” for the divisions it has created. Between 1979 and 2012 a tenth of income growth went to the bottom half of earners, while the top 10% “pocketed” 40%.

Twenty years ago house prices were, on average, 3.6 times annual earnings; today that figure is 7.6 times. Real wages are 3% lower than they were a decade ago, adds David Smith in The Sunday Times, while productivity has remained pretty much flat. When capitalism “fails to deliver what it is supposed to be good at”, it’s not surprising support for it is tested.

Yet the truth is that the under-40s that are abandoning the Tories in droves are still “on the whole, Thatcher’s children: aspirational and acquisitive”, says Stephen Bush in The New Statesman, The Tories’ problem with the young may not be “easy to solve”, but it “isn’t hard to diagnose”. If the Tories can create a new generation of house owners (for this is the issue that generates the most heat), the floor “might yet collapse” under Labour.

May’s difficulty, however, is that “almost any policy lever” that helps young people get on the housing ladder will “hit older Tory voters where it hurts” – house prices. However, in an attempt to “reconnect the Tories with young voters”, on Wednesday May announced a major council-house building initiative, says George Parker in the Financial Times. 

Of course, the root cause of house-price inflation is not market failure, says Jeremy Warner in The Daily Telegraph. It is – as almost all cases of so-called market failure are – government interference and regulation.

And we’re getting more of that, too: the “completely inappropriate use of taxpayers’ money to boost demand further through Help to Buy, which bunged another £10bn at the problem this week, and the pathetically inadequate creation of an Ombudsman for landlords”, both of which amount to “no more than a sticking plaster”.

Making the case for free markets “isn’t just about rhetoric. It’s about taking on vested interests and it’s about the uncompromising belief in the power of enterprise to create wealth and growth”. 

In terms of getting voters on side, the “eloquent Brexit agitator” Daniel Hannan has pointed to a solution, says Danny Kruger in the Financial Times. His speech at the recent launch of the Institute for Free Trade was “instructive for the way he framed the case for capitalism”.

Gone were the usual arguments about competition driving down costs, rewarding winners and eliminating losers; instead, he explained the emergence of capitalism as “the moment when ‘people stopped relying on themselves and started relying
on others’”.

This vision of “economic freedom as the practice of collaboration” bears repeating. Capitalism is a “fundamentally generous creed”. Its problem is that the benefits are “so widespread as to be almost imperceptible”, while its casualties are “the clear victims” of identifiable “men in suits”.

Shifting public perception requires a “guerrilla insurgency” against Corbynism. As Robert Halfon, a Tory MP, puts it, “We need to claim back language from the left – words like social justice, redistribution, compassion, and do them in Conservative ways.”

Tories circle their “zombie” PM

At the party conference this week Scottish Tory leader Ruth Davidson urged the Tories to get over their “nervous breakdown” following Theresa May’s disastrous election, says Owen Jones in The Guardian.

“But the crisis… is not being caused by an embarrassingly weak leadership” – though May’s “zombie premiership” isn’t helping – but a collapsing political consensus, as May herself has acknowledged. The squabbling and jostling for position “are just the morbid symptoms of a wider existential crisis within the movement”.

And as one Conservative aide warned, unless the Tories get their act together, Jeremy Corbyn will end up in Number 10, says Rachel Sylvester in The New Statesman. The problem is that, while Theresa May insists that she plans to “go on and on”, she has “lost all authority” and no Tory MP “seriously expects” her to lead her party into the next election.

No wonder the main actors on the Tory stage were “performing to the audience” at this week’s party conference. It’s “one big talent contest”. Even before the conference, less than a week before Theresa May’s Europe speech in Florence, “blond bombshell” Boris Johnson “stepped into the spotlight” with a 4,200-word soliloquy on Brexit in The Daily Telegraph, leading to endless headlines about party divisions.

Then there’s Amber Rudd, David Davis, Priti Patel and Jacob Rees-Mogg, adds Jane Merrick in The Daily Telegraph. Boris Johnson and Michael Gove may say that the cabinet is as united as a “nest of singing birds”, but it is “no secret that several members of the cabinet want to be Tory leader”.

In a veiled rebuke to Johnson for “sabotaging a conference” that was supposed to be about domestic policy, not Brexit, May closed the gathering in Manchester with a plea for colleagues to set aside their own ambitions and “do our duty by Britain”, says Francis Elliott in The Times.

But she didn’t manage to reassert her authority, says Spectator.co.uk. Instead, her speech, “interrupted by coughing fits and with part of the set falling apart behind her — served as an unfortunate metaphor for her premiership and party”.