Economic Theory

George Osborne does not have a clue what a ‘free market’ is


George Osborne was Chancellor of the Exchequer from 2010 until July 2016. Now he is, among other things, editor of the Evening Standard. In last night’s editorial he gave his view on how the sluggish economic growth of the UK could be improved. It gave me an idea about why the current generation of senior Conservative MPs have stopped promoting the free market economy. They don’t know what it is.

According to Mr Osborne, “What Britain needs is — to coin a phrase — a long-term economic plan.” My heart sank. But then I read on, and it started to float again. For Mr Osborne’s very next paragraph was:

“Pressure from Corbynistas to raise business taxes, increase union power and — in their leader’s extraordinary words — ‘abolish the gig economy’ needs to be contested with an alternative vision of an innovative, competitive free-market future.”

He had not meant “plan” in the Soviet sense where the state directs investment. He had meant it in the everyday sense. The plan is to have a free economy. The plan is to have no government plan but only private plans.

Alas, no. He went on immediately to explain this “free-market future”:

“The announcement that Britain wants to be a world leader in the move towards electric cars is welcome. Let’s now see the policy that will make sure those electric engines and batteries are manufactured here. The newly elected mayors in our cities need to come forward with their vision for local growth, and work with the government on concrete funding plans for big infrastructure – such as Crossrail 2 here in the capital, and its equivalent, Crossrail for the North, linking Liverpool through to Hull with a high-speed line across the Pennines.”

Mr Osborne favours free-markets. The only problem is, he doesn’t know what they are.

We here at the IEA publish “primers” – short books explaining economic ideas in plain language. They are aimed at students. But it looks like we need to add Chancellors of the Exchequer to the mailing list.

 

Former Director of Research

Jamie Whyte is the former Research Director at the Institute of Economic Affairs. Prior to joining the IEA, Jamie was the leader of ACT New Zealand as well as the Head of Research and Publishing at Oliver Wyman Financial Services. He has previously worked as a management consultant for the Boston Consulting Group, as a philosophy lecturer at Cambridge University and as a foreign currency trader.


2 thoughts on “George Osborne does not have a clue what a ‘free market’ is”

  1. Posted 27/07/2017 at 18:50 | Permalink

    Please do, and something about playing for the team, and loyalty, too please.

  2. Posted 29/07/2017 at 02:20 | Permalink

    What team? And who do youthink is on it?

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