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How Boris Johnson Can "Make Britain Great Again"

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A future prime minister must have a clear understanding of his enemy, the socialist myth, why it fails, and why free markets succeed. 

Successful societies all have one thing in common: the freedom of individuals to cooperate socially in the pursuit of their needs and desires. Uniquely in the animal world, the human race deploys individual skills to produce what others want, and those others reward the individual on the basis of his or her ability to do so. Despite his inferior physical characteristics compared with other animals, it is through specialisation, the division of labour, that the human race has become dominant. The key to human success is the ultimate democracy inherent in the division of labour. It means the customer is king and all economic effort is expended toward his satisfaction. Individual success is rewarded by the improvement in living conditions for all. It defines human progress.

Truly, it is proof that free-market competition is more successful than any form of consensus.

The full economic potential of a free society is hardly ever realised. Island states, such as Hong Kong and Singapore have achieved it, but in the larger nations the development of true economic liberalism reached its zenith in Britain following the repeal of the Corn Laws and eventually all other tariffs. The improvement in living standards for the British people was truly remarkable, and the subsequent accumulation of productive wealth was unprecedented.

In twentieth-century Britain, the success of free markets bred a peculiar form of envy, based on the erroneous idea that the accumulation of wealth was at the expense of the labouring classes. It also played to intellectual and middle-class guilt. In defiance of all the evidence, it was popularised by the followers of Karl Marx. This was the basis upon which the Labour Party became a force in British politics.

Karl Marx held that all property should be ceded to the state and the state should direct the employment of individuals and allocate the distribution of all production. The Labour party was guided by these principles, sworn to nationalise all industry, and is now resuscitating these defunct ideals.

In all forms of socialism, the state becomes the master of its people, instead of the democratic state being the servant and guarantor of a free society. This role-reversal is at the heart of the conflict in the Brexit debate, exposing British society as already enmeshed in statist chains. As the party whose mission has always been to protect personal property, the Conservative Party itself has been exposed as socialistic in all but name.

Socialism fails because it lacks the basis of economic calculation. Only free markets provide the means of establishing prices. With a knowledge of what sells and for how much an entrepreneur single-mindedly invests his resources in the production of tomorrow’s products. None of this hard-won skill is available to the socialising state. It has to refer to foreign capitalistic markets for guidance, in a tacit admission of failure.

Socialism is incapable of fostering progress, because it cannot exercise commercial judgement unfettered by non-commercial considerations. It is a monopoly becoming less efficient by the day. The state is only able to assume that what happened in the past will happen in the future. There is no room for progress in the state’s static calculations. 

Progress is the defining feature of dynamic free markets. In socialism we observe the state removing productive resources from the individual by confiscating his property, and in free markets the individual in his own interests serves his fellow men to their greatest satisfaction. The baker bakes bread for the builder; the builder builds shelter for the tech entrepreneur; the tech entrepreneur provides the media for the baker and the builder to enjoy their leisure. The state simply cannot devise an economic role for itself by interposing in these transactions.

Public support for socialism is not based on reason, but emotion. It draws on Christian values and morality, in which a concern for the welfare of the common man is expressed. As a competitor to religion, socialism replaces the deity with the head of the state: this was Karl Marx’s creed, considering himself as the head of a unified world state and Engels as his enforcer. Christians were the useful idiots on the way to this godless nirvana.

By recruiting the masses with their Christian ethics, socialism abuses basic Christian decency, conflating religious morality with statist objectives. It plays on a comfort factor, offering an alternative to the perceived dangers of a free market jungle, while failing to mention that the alternative to rich variety is the waterless desert of socialism.

In combating socialism, a wise politician must understand the principles upon which it fails. Only then can he or she proceed with the potential for success. If we examine President Trump’s attempt to reverse the tide of socialism in America, the evidence suggests he has failed to grasp the fundamental qualities of free markets that must be preserved and enhanced. He appears to be guided more by his own beliefs and prejudices than he is by a rational understanding of free markets. He demonstrably fails to understand international trade and the importance of denying inflationary financing. He thinks that manipulating interest rates lower is an economic panacea. Trump is a statist.

If Boris Johnson is to succeed in “Making Britain Great Again” he must understand the fundamental differences between socialism and free markets. He must observe and learn from Trump’s errors to not fall into the traps Trump has set for himself. He must be guided by free market principles, despite the howls of outrage that will continue to be a feature of his premiership, just as they have been of Trump’s presidency.

A nation is only successful despite its government.

Excerpted from An Aide-memoire for Boris

Alasdair Macleod is the Head of Research at GoldMoney.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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