USUALLY, the way to measure the strength of a government’s commitment to the market is that its opponents will be united in declaring that the government is the problem, while Conservatives will be united in declaring that the overeach of government itself is the problem.

And usually, when output has suffered a decline of 35 per cent, unemployment has risen to 10 per cent, and the public spending deficit is heading for 15 per cent (50 per cent higher than at the worst period following the financial crisis of 2008), no self-respecting advocate of markets would argue that the solution was more government.

After all, if there is anything we have learned from the last four decades, which have seen a general move away from the statist tendencies of the post-war period and a growth in markets and trade – and incidentally, a fall amongst those in absolute poverty from 44 per cent of the world’s population in 1980 to under 10 per cent now, according to the World Bank – it is that government is less good at creating growth than the market.

It might seem unusual, then, to read at the weekend that four of the leading free-market think tanks have backed plans for the Government to spend enormous amounts of public money and to ramp up debt to a level never previously seen in peacetime. What’s not a surprise is to see Corbynistas and other woke Lefties maintaining that this unprecedented spending is a vindication of the fact that more government and more spending is the answer to this crisis, since, although that prescription has failed on any and every occasion it has been tried anywhere, it is their answer to everything. (See also: “but that wasn’t real socialism”.)

But nothing about our current circumstances is usual, and it turns out that the economists at the Institute for Economic Affairs, the Centre for Policy Studies, The Adam Smith Institute and Policy Exchange haven’t in fact shifted their stance all that much. They may have accepted that the danger of impeding growth and recovery allows for a level of government borrowing and spending that, in normal times, would be regarded as imprudent. There is also the helpful coincidence that,

as it happens, the cost of borrowing is currently at a historical low.

Their general approach, however, remains that of classical liberal economics.

The most effective ways of promoting innovation, growth and prosperity are, as they always were, to lower taxation and regulation. It remains the case that individuals and private firms are better judges of their own priorities, and better at handling their own finances, than government departments.

It is still true that it’s better to live within your means, rather than borrowing and racking up debt. And there is still no real argument for using taxpayers’ money to prop up companies that would go bust if they were operating in the private sector.

But to argue that this crisis should not be used as an excuse to return to the idiocies of the 1970s, when you could only get a phone from the Post Office, the state-subsidised terrible companies like British Leyland and even owned a travel agency and a removal firm, is not to say that there is no role for government spending.

There are services, such as health, education and welfare spending, which provide public goods, even if you think they could often be run more efficiently. There are areas, such as public transport and construction projects, where investment can genuinely produce a spur to other economic activity and an increased quality of life even if, as I do, you regard particular examples, such as HS2, as a scandalous waste of public money.

Since the Government, before the outbreak of the coronavirus, had already been planning to do quite a lot of such spending in any case, it at least now has the justification that moving on from austerity is a necessity, rather than just being a way of bribing their new supporters in the north of England.

The part which marks a new departure for a Conservative government (since the 1980s), and to which it was assumed that supporters of the free market would be resistant, is that colossal amounts of taxpayers’ money are going to be spent on exactly the kind of subsidy to private businesses that classical liberals would normally characterise as “crony capitalism”, “rent-seeking” or “protectionism”.

But the current proposals are quite different from, say, propping up British Steel in the 1970s or bailing out inept and recklessly greedy bankers in 2008. Those were failing businesses that deserved to go under, and the governments of the time would have been much better advised to let them.

The situation now, though, is one where firms which were doing perfectly well have, through no fault of their own (and, actually, because of the measures imposed on them by central government) suddenly been shuttered. We may not have much sympathy for football players or billionaires like Sir Richard Branson, and I suspect and hope that companies that have shown themselves up by taking advantage of this period to profit, or ill-treat their employees, will not soon be forgiven by the public, but most of those who have seen their livelihoods destroyed deserve the kind of financial help from the public purse which would normally be undesirable.

Builders, plumbers, electricians, small shopkeepers, mechanics, hairdressers and window cleaners have not only had their businesses suspended through no fault of their own, but are going to be essential in driving our ability to recover from the recession which will almost certainly follow this outbreak. Some sectors, such as the hospitality industries, sports and creative fields such as theatre and music, are not only likely to be unable to function for some time yet, but are crucial contributors to the UK’s overall economy.

What all these groups will need, in the long run, is an atmosphere in which enterprise can flourish, because it will be the only way out of the economic black hole the coronavirus has created. And that in turn means that, while there will need to be tons of public money spent in the short term, the next step should not be a hike in taxes to pay for it, but tax cuts that will encourage growth.

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