The Conservative Reader
Issue II: Parasitic ideology, how to get growth, unbundling ESG and EDI, and the impoverishing effects of mass migration.
We think conservatives need to talk more and get better at sharing ideas. So we are starting this newsletter so we can share with you the best newspaper columns, policy reports and books that will stimulate thinking and promote new ways of doing things.
We will send an email out every Friday lunchtime, so please do look out for it. And expect plenty of content about the things we think make conservatism such a compelling body of thought: identity and belonging, community and commitment, market economics, national resilience and good government.
Best wishes, Nick and Will
Towering columns
Aris Roussinos on the parasitic effects of neoliberalism for Unherd:
Such is the British state after forty years of exposure to neoliberal ideology. After four decades of privatisation and outsourcing, it hesitates to close the borders to a lethal pandemic because feeding a few thousand travellers in airport hotels is beyond its capacity; it can’t produce a functioning track and trace system; when the pandemic began, it had no stock of PPE and wasted millions trying to procure essential supplies from private profiteers. Even supplying free school meals to quarantined children transpired to be beyond the capacity of the fifth-largest economy on earth, leaving the government hostage to the ineptitude of the profiteers to whom it outsourced the role, and humiliated by a Premier League footballer’s PR advisor. Even as the British state is brought to the edge of destruction, it cannot shake itself free of the ideological parasite of outsourcing, deregulation, and privatisation which controls its every action.
Roger Bootle on the growth-enhancing prospects of the Budget for the Telegraph:
The chancellor and prime minister will no doubt argue that the cuts in tax rates will also potentially have a favourable effect on economic growth. They may have a bit of a point with the abolition of the higher tax rate. This may encourage more high earners to stay, or locate themselves, here.
But the 1p cut in the basic rate of tax will have next to no effect in encouraging people to work harder or more people to join the workforce. This is not to say that a substantial cut in the tax taken from ordinary workers is not a worthy ambition. But to make a serious difference the cuts need to be on an altogether larger scale and they need to reflect genuine reductions in the tax burden, not a shifting about from A to B.
Getting the growth rate sustainably higher will require a big increase in business investment. Rescinding the planned increase in corporation tax will help but on its own it will surely not cut much ice. The Government will need to develop measures that give a greater incentive for business investment.
Adrian Wooldridge on the muddling effects of ESG and EDI for Bloomberg:
The business world is in thrall to six letters — or, more accurately, to two groups of three letters — ESG and DEI. These stand, respectively, for “environmental, social and governance” and “diversity, equity and inclusion.” Taken together, they constitute the ruling business ideology of our age…
…But do these letters really fit together logically? Or are they muddlings of buzzwords that are either ineffective or even counterproductive? The evidence increasingly suggests the latter. Both ESG and DEI bundle together different things that range from the admirable to the questionable. This bundling not only risks setting conflicting, fuzzy or even questionable goals for companies. It also distracts from the mission that initially set the buzzwords afloat — preventing the world from overheating in the first case and tapping a wider range of talent in the second.
Nick on the impoverishing effects of mass migration for the Telegraph:
Even on its own terms the Government’s policy makes no sense. The Growth Plan argues that immigration, including even low-skilled immigration, “plays an important role in economic growth, productivity and innovation.” It asserts that “significant net inflows from migration” helped to drive “the UK’s growth in the decade after 2008”.
Yet the Truss and Kwarteng argument is that economic growth has been too low through this period of historically high immigration. Far from contributing to “growth, productivity and innovation”, mass immigration has undermined all three. It has left the British economy addicted to a supply of low-skilled, low-paid migrant workers, with too little public and private investment in the skills and technology that improve productivity.
Britain is for example the only G7 economy with a robot density – the ratio of robots per employees – lower than the world average. We have a far lower degree of manufacturing automation than countries like Spain and Italy. In farming, a government automation report found “critical elements of the industry have a high dependency on seasonal migrant labour to harvest crops.”
Wonky thinking
The Resolution Foundation analysed the distributional impact of the UK Budget:
In the round, the effect of the 1p cut in basic rate of income tax (worth £377 to all higher-rate taxpayers), the abolition of the 45p additional rate of Income Tax, and the abolition of the planned Health and Social Care Levy leaves someone earning £200,000 a year £5,220 better off in 2023-24 than they would have been absent the Chancellor’s announcements, while those earning £20,000 a year will gain just £157. A person earning an exceptionally high £1 million a year will be £55,220 better-off, far more than the average household income.
Moreover, the benefits will not be evenly spread across regions of the UK… the average gain for households in the South East in 2023-24 will be £1,670, with £690 of this increase coming from the scrapping of the additional rate of income tax. In contrast, households in the North East are least likely to benefit from the upcoming tax changes, with the average household gain being £470. This is largely due to the higher concentration of higher-rate tax payers in the South.
Dani Rodrik published a Hamilton Society paper on "industrial policy for good jobs”:
In short, bad jobs lead to lagging communities with poor social outcomes (poor health, inferior education, high crime) and social and political strife (populist backlash, democratic malfunction). In the absence of incentives that prompt them to do so, private employers fail to take these costs into account. These negative externalities can be substantial—perhaps so great that they threaten the economic order underpinning our form of government. Good jobs, conversely, have enormous positive externalities. The external costs associated with the failure of the private sector to create good jobs provide a motive for industrial policies that is broadly similar to the traditional economic case for such policies.
Book of the week
This week’s Book of the Week is Quintin Hogg’s classic The Case for Conservatism. Published in 1947, it remains one of the best encapsulations of conservative principle. Hogg (who as Baron Hailsham later served as Lord Chancellor under Heath and Thatcher) defines conservatism in opposition to the utopianism of both 19th century liberalism and 20th century socialism:
By bitter experience Conservatives know that there are almost no limits to the misery and degradation to which bad government may sink and depress their victims. But while others extol the virtues of the particular brand of Utopia they propose to create, the Conservatives disbelieves them all, and, despite all temptations, offers in their place no Utopia at all but something modestly better than the present. He may, and should, have a programme. He certainly has, as will be shown, a policy. But of catchwords, slogans, visions, ideal states of society, classless societies, new orders, of all the tinsel and finery with which modern political charlatans charm their jewels from the modern political savage, the Conservative has nothing to offer. He would rather die than sell such trash.
Quick links
The Conservatives now trail Labour by 33 points (21% to 54%), according to YouGov.
Moody’s said that UK fiscal policy is “credit negative”, downgrading growth forecasts.
58 per cent of owners with a mortgage (a third of the market) are aged 35 to 54.
How margin calls nearly toppled several UK pension funds this week.
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