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Mon, 19 October 2020

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By Hft

Government intervention is not the solution to our economic problems

Government intervention is not the solution to our economic problems

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3 min read

To build a lasting recovery, government should cut regulations and break down the barriers to private entrepreneurship.

As we emerge from this crisis, we must always remember society is co-operation; it is community in action. It is understandable that some think unprecedented times require an unprecedented form of Conservatism. We find ourselves in an economic situation unheard of in the modern era. This does not require an unheard of response, however. We need to look back. In the past, the Conservative party has rested on the great ideas of thinkers like Hayek and Friedman. It is to their ideas we need to return. While the age of Covid may be unprecedented, we see similar trends in previous times – rising unemployment, high government debt, and a feeling among many that greater state intervention is required.

There are only two paths before us as we look to the future of our economy in the age of Covid – state intervention or a free society. There is no middle path. Any attempt by the state to create one will only prolong our quest for long-term economic recovery and prosperity. Any gains in between will only be an illusion that cannot be sustained and will lead to further economic problems in the future.

Correspondingly there are only two categories of management, only two ways to operate – the government’s way (state intervention) or the private citizen’s way (a free society). We can operate either through bureaucracy or profit management. We must remember that profit is a measure of value we have created for others, and entrepreneurship is an individual’s search to help other people. We cannot allow these things to be demonised as they often are; we must recognise they are key to our flourishing.

Government must not give into the temptation to start planning people’s lives

Conservatism in the age of Covid must reignite the idea that government intervention and interference with the natural co-operation of individuals, families and businesses cannot be the solution to our economic problems. Restrictive measures restrict output.

Instead, the government must break down the barriers to private entrepreneurship. It should cut regulations and reduce barriers to entry, wherever possible. Many businesses and individuals will have to adapt to operate, not only during the coronavirus outbreak, but afterwards as well. They can only do this if they are provided with the flexibility to operate.

This is not an argument for a free-for-all. The government should work to encourage private entrepreneurship, to prevent crony capitalism and to unleash the power of free individuals, families and civil society. Skills retraining and upgrading, apprenticeships and business adaptability advice can act as government support for freely operating individuals and businesses.

After coronavirus, individuals are going to be scared. They are going to look to the government for leadership. The government must not give into the temptation to take this search for leadership as a sign that they should start planning people’s lives. Indeed, Conservatism in the age of coronavirus must unleash the power of free people because it is a free people who have been crushed by the disease.

 

Steve Baker is the Conservative MP for Wycombe.

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