Monday, April 28, 2008

What Economics can do for you

Being an economist from 1968 at the LSE, I KNOW that economics is actually the magic answer of " 42" - the answer to everything.
People think of economics in terms of money, but in reality, the medium of exchange can be lots of different things, only one of which is money.
So it was without surprise that I read today of a second FTSE 100 company decamping to Ireland.
The cost is tiny compared to the cost of staying and paying this government's taxes.
The Tories, when they get in, will have a big problem sorting this mess out, but they could start by making a flat rate tax - very appealing.
I've lived long enough to have seen three changes of power from Labour to Tory - and hope shortly to see a fourth.
After WW2, the whole country was so exhausted and bankrupt, that, to be fair, nothing would have worked. It was only after the Tories came back in in 1951 that things began, very slowly to pick up - and that because Keynes killed himself getting the Americans to help out.
The 60s had Wilson and his white heat of technology - only he cancelled TSR2 and Blue Streak and Tony Benn felt companies should be made to pay for their excessive profits - even though they were non-existent. Heath came in - regretfully he had little idea about economics, and Barber, his Chancellor, even less.
But in the 15 years from Wilson's first government to Callaghan's last in 1979, Labour dominated the economic thinking.
So by 1979 everyone was generally agreed that the UK was finished. Mrs.T saved us, and she and Major left such an excellent economic legacy that it has taken 11 years for this present Labour lot to squander it.
We will have the same effect again - Labour have ruined it, Tories will slowly sort it.
And all because Labour always try to dictate the market.
You can't.
The market will always win.
As I always say, London gets fed and watered every day.
And noone tells anyone how to do it. But economics makes it work.

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