If the looming vote endorses the rejection of the EU, it will be Britain declaring, as it always has, that it is open to the world. More than that, it will be a statement of confidence, an affirmation of history and a declaration that it it is not scared nor has reason to be.
The current government is in a unique position to change Britain. While there seems to be a rise in socialist movements in both the UK and America, they are in no way mainstream. Despite Senator Bernie Sanders success in the Democratic primaries, an analysis of his supporters shows they are not the poorest, who have been voting for Mrs Clinton.[1]. Similarly in the UK, the movement that has recently taken control of theLabour opposition is an unholy alliance of unreformed hard-leftists and younger affluent voters attracted by the fresh smell of musty old ideas, the sport for whom its but a short step from social media to socialism. However the left is intellectually bankrupt, their ideas disproven by the history the right forgot to teach.
The old New Labour faction is reduced to clinging to the Big Government statists on the Continent while the new Old Labour group see the EU as corporate menace and wish to rewind the European clock to the 1970s. In the 2015 General Election the public revolted at the thought of a socialist-light party, never mind a socialist one. This is not to assume that the opposition is unelectable. There are political cycles, just as there are economic ones, and for all their faults Labour is still the alternative government. The Conservative Party made itself electable, but that is not to say it is particularly loved. A vote to leave would unquestionably be a vote for self-determination, and you cannot have political freedoms without economic ones. A radical move by the government could entrench lower tax rates for good, to paraphrase Milton Friedman “the important thing is to establish a political climate of opinion which will make it politically unprofitable for the wrong people to do the wrong thing.”
The reason the left can get any traction is due to the perceived failures of capitalism. One can make an argument for nationalised utilities or railways on the basis that no one is offering to build a new pipe into your home or introduce new tracks for mag-lev trains. The competition principle underpinning the free market gets no suction here. However this is to forget that nationalisation stymies innovation. It is an acceptance of the status quo. An acquiescence to the idea that this is as good as it gets. A surrender to managed decline.
The Answers
In recent times, putting one’s trust in the free market has been given a bad name. Whether it is for the 2008 crash or the behaviour leading up to it, capitalism has been under attack. Yet it was not the free market that crashed the world economy but government interventions. In both Britain and the US, the economic gains of the free market governments of Lady Thatcher and President Reagan were squandered by those that followed. While President Clinton governed as a centrist and was moderated by a Republican-controlled House, the Bush Administration that succeeded ended up spending in a most un-Republican way. The size of Mr Blair majorities effectively made him an elected dictator. After following the economic plans of Conservative Chancellor Kenneth Clarke in their first term, New Labour went on a very Old Labour spending spree in their subsequent ones. The results were to entrench crony capitalism in oligopolistic markets while government spending and regulations grew. By interfering in the markets they created bubbles. Addicted to high tax receipts, assured that all their regulators had everything in check and convinced they could manipulate the markets to solve domestic housing policy, they allowed firms to become too big to fail, then encouraged them to lend and spend like it was 1999 and we were all at the end of history. When the market tried to correct itself the systemic risk panicked policy makers into the biggest transfers of debt ever, yet seemed to absolve anyone of responsibility.