The free market is the best means of advancing human opportunity for the largest number of people.
Correspondingly, British Prime Minister Theresa May, deserves credit for her speech Thursday, articulating why the free market is indispensable. The timing of May’s address was crucial, in that Britain’s opposition Labour Party is rising in the polls and pushing hard for a near-term election. And with Labour now led by an avowed socialist, Jeremy Corbyn, its electoral victory would mean Britain returning to the 1970s and embracing a socialist dystopia.
Fortunately, May hit all the key points.
May began by praising the independence of the Bank of England (Britain’s equivalent of the Federal Reserve), noting that its insulation from government pressure has kept inflation at sustainably historic lows. This was May’s first rebuke to Corbyn, who has pledged to use monetary policy as a piggy bank for his many big-ticket spending proposals.
Next, May defended the spending cuts that Conservative governments have pursued since the 2010 financial crisis. “The deficit,” May said, “has been reduced by more than two thirds, from a post-war high of 10 percent of GDP in 2009-10 to 2.3 percent of GDP in 2016-17.” Going forward, May will need to offer specifics on why long-term deficits are so catastrophic for the economy, but this was a good start.
But then came May’s best moment.
When countries make the transition from closed, restricted, centrally-planned economies to open, free market policies, the same things happen. Life expectancy increases, and infant mortality falls. Absolute poverty shrinks, and disposable income grows. Access to education is widened, and rates of illiteracy plummet. Participation in cultural life is extended, and more people have the chance to contribute. It is in open, free market economies that technological breakthroughs are made which transform, improve and save lives. It is in open, free market economies that personal freedoms and liberties find their surest protection. A free market economy, operating under the right rules and regulations, is the greatest agent of collective human progress ever created. It was the new combination which led societies out of darkness and stagnation and into the light of the modern age.
Well said. The legacy of history is clear: Capitalism serves human interests, and socialism buries them under the altar of corruption and authoritarianism.
But May also took the fight to Corbyn. She noted what his government would mean in terms of “ideologically extreme policies which have long-ago been shown to fail, and which are failing people today in places like Venezuela… Far from somehow protecting the poorest and most vulnerable in our society, that outcome would surely hurt them the most.” Again, May is right. As I’ve explained, the moral dichotomy between May’s capitalism and Corbyn’s socialism is encapsulated in the different living standards in Colombia and Venezuela.
May ended on a positive message.
Pushing back against fears that Brexit will destroy the British economy, May pointed out that: “The U.K. is one of the largest economies in the world and EU’s biggest export market. Businesses and jobs across the continent rely on our shared trade.” That mutual interest is why, whatever growing pains it may proffer, Brexit won’t be as bad as some analysts assume. Put simply, the EU has a major interest in ensuring Britain’s economy remains prosperous.
Nevertheless, this speech wasn’t simply important in what was said, it was important in the fact that it was May saying it. Until now, the prime minister has been reluctant to take a robust stand for capitalist morality, and has thus ceded political space to Corbyn’s socialist message. Fortunately, May seems now to have recognized that the facts and the moral argument are on her side.
She must double down on this track.
