Boris Johnson’s latest wheeze is classical political economy. Faced with the chaos of petrol shortages, empty supermarket shelves and surging gas prices, Johnson offered an audacious response this week: this was all part of the plan. Britain, he explained, was merely transitioning out of a broken economic “model”, based around low pay and high immigration, and into a new one, based around high productivity and high-wage job creation.
His conference speech was immediately criticised by the right, on the basis that by celebrating tighter labour markets it appeared to be actively inviting inflation. But on the basic gut level, to which Johnson only ever speaks, he appears to have got away with it. Britain’s most exasperating economic policy riddle of recent decades – its sluggish productivity growth – was simply going to be magicked away, he announced.
Regardless of whether we agree with the Adam Smith Institute that his speech was “economically illiterate”, Johnson’s newfound interest in economic “models” tells us something about how this weird new Conservative party is operating. It is equally significant that Keir Starmer – in contrast to his two predecessors – shied well away from discussing the state of British capitalism. The terms of political debate appear to have flipped.
To some extent, Johnson was ploughing a familiar conservative furrow. The insistence that apparent economic failure is, on the contrary, merely a symptom of the medicine beginning to work has strong echoes of Margaret Thatcher’s turbulent first few years in office. In 1981, Thatcher was famously criticised by 364 far more distinguished economists than those of the Adam Smith Institute in a letter to the Times condemning her attempts to tackle inflation through punitively high interest rates.
Thatcher posed as the strict nurse, painfully weaning the patient off its addiction to inflation. Johnson, by contrast, is suggesting Britain now needs to kick its dependence on foreign labour. No matter what apparent damage the Conservative party does to business or GDP, there is something about its status in British public life that grants its leaders the right to speak about the essence and direction of capitalism, in defiance of all economic logic and indicators.
Thatcher, of course, was deadly serious and a living embodiment of the work ethic that she was advocating. Johnson is neither of those things. Thatcher nearly paid a hefty political price for her intransigence, whereas it’s hard to imagine Johnson risking his position for a mere ideology. For Johnson, it’s safe to say, this is more bluster that “works” to the extent that it allows him to spin a good yarn. Theories of capitalism now join ancient Greek myth and rugby metaphors – all simply ways that Johnson chooses to navigate an interview.
Starmer evidently views Johnson’s recklessness as an opportunity to position Labour as the party of business. “Good business and good government are partners,” he told Labour conference a week earlier. While his speech was understandably hostile to Conservative economic policies, which he blamed for low wages, it contained nothing as drastic…