The hard centre

The Conservative party has to move beyond Brexit and leaders: what is it going to be about? I suggest it has to be about healing capitalism.

Capitalism is the only system that is capable of delivering mass prosperity, but it cannot be left on autopilot. Once every few decades it veers off track and requires active public policy. In the mid-19th century, the old Tory party was revolutionised by Disraeli’s ‘one nation’ agenda, correcting the social catastrophes of early industrialisation. In the 1930s, there was no Disraeli: indeed, no political party rose to the challenge of mass unemployment, which was addressed as an inadvertent by-product of rearmament.

During the 1980s, a tempting new economic doctrine emerged in America: markets were sacrosanct, and government regulation was impeding them. High–powered incentives, linked to monitored performance, would be the carrot inducing CEOs to get tough. A competitive product market, combined with a competitive financial market, would provide the stick, forcing firms to be efficient: only the most profitable ones would be able to attract capital, while badly performing firms would face the threat of takeover.