#30 Fixing Britain's economy with Ewen Stewart

• Could Scotland have become Singapore-on-the-Clyde in 2014 had it voted for independence?
• Is Boris Johnson possibly Britain's worst ever Prime Minister?
• Does structural reform only happen in times of crisis and how deep is the economic rot that has set in?

The British economy is far more centralised and state-run than most people realise. I recently sat down with Ewen Stewart who is the Director of the Institute of International Monetary Research at the University of Buckingham. He sits on the UK Growth Commission and is also a director of the think tank, Global Britain. He believes we have one shot to turn around Britain's malaise and revive areas such as healthcare, defence, and manufacturing. 

As recently as the Falklands War, Britain was able to deploy 23 frigates and destroyers - roughly one third of its surface fleet. Today it is defenceless in the North Atlantic. Most European countries offer healthcare which is free at the point of need. Whereas Britain tops the quartile rankings in terms of health spending, it sits at the bottom in terms of service. 

With an immigration policy that Charles Ponzi would be proud of, well over 50% of GDP government spending and a brain drain is underway with more tax rises on the horizon.

We discuss what needs to be done to turn things around from a policy perspective to revive a sense of dynamism and energy.

You can find out more about the IIMR and the Growth Commission here:
https://mv-pt.org/
https://www.growth-commission.com/

This podcast was produced by  @Mattjcooper with music composed by  @lovermanxoxoxo .

Transcript

Welcome And Guest Background

Speaker 2 0:02

Hello and welcome to Meeting People with Me Amul Pandya. Meeting People is a podcast where I have long conversations with rebellious, adventurers, and sometimes connected. Ewen Stewert, welcome to the Meeting People Podcast. Thanks for joining us. So just to introduce you very quickly before we dive into the meat of it, you're the director of the International Institute of Monetary Research. Have I got it the wrong way around? The Institute of International Monetary Research. Correct. Got it. Yeah, that's the one. Yeah. University of Buckingham. And so we'd love to talk about that at some point. And then you're on the UK Growth Commission as well. Correct, that's right. Or the UK No Growth Commission, as we are right now. So how we get some UK growth back would be something we'd like to solve today, if possible. But before

Scotland Independence And Fiscal Reality

Speaker 2 0:50

we get into that, I thought it would be fun to start with a counterfactual which you can uh either laugh at or riff on, depending on your take on it. But I want to go back to the Scottish independence referendum, which was 2014. Yeah, 2014. So scenario A played out. Let's take scenario B, which is uh Scotland um rejects Project Fear and votes to be independent. There's some sort of you know international market reaction, there's uh there's probably a short-term hit on the Scottish economy because of uncertainty, and some pretty difficult choices have to be made by whatever Scottish government is in power, probably to sort out the finances, probably to create some sort of you know investment-friendly landscape to get the economy going again. Might be to drill some more oil, and maybe they'll sort of discover some of their roots in the Enlightenment and realise that they invented some or discovered something called classical liberalism. And all of a sudden you've got this northern neighbour to England, which is cutting taxes, cutting spending, cutting red tape, and then England is losing business and losing um losing its edge, and so has to follow suit, and you get this sort of competitive tension, and not necessarily Singapore or the Clyde, but you have this rediscovery of what kind of once upon a time made Britain a kind of great economy, which was kind of low taxes, low red tape, and kind of high growth. Could that have happened?

Speaker 1 2:31

In the long term, possibly, but very unlikely in the short term, actually. Um the referendum result was pretty close, but there was a decisive no in the end. But I think that the problem is that Scotland uh has inherited a position through its own making, actually, where the state is over half the economy, 54%. It's a it's a public sector, heavily regulated economy. On the assumption it had taken its share of the national debt, which I think it would have done, it would have inherited a very, very weak position. Yeah. Uh its fiscal deficit is way worse than England's. You know, um it England running a fiscal deficit of about 5% of GDP, Scotland's 12-13%. Wow. So that is an unsustainable position, actually. If you ask me, the SNP were exceptionally lucky not to win that because they'd have been in real trouble if they had. You know, you'd have been either had to either raise taxes, which would have been counterproductive, uh, there'd have been capital flight, or cut spending, in which case their support would have been very upset. So um I think they dodged the bullet. Now, it's interesting, could Scotland succeed? It could actually, uh, but only if it adopted a totally different policy set. And now you pointed to the historical roots in Crasco liberalism, and there is an argument that Scotland created the modern the modern world. I think that's an oversimplification to be honest. Yeah. But um we obviously think of Smith and Hume and uh Ferguson and and many other great philosophers, and indeed the Industrial Revolution, a large part of that, not all of it, was uh was formed in Scotland. Um what I find extraordinary about this the Scottish National Party and nationalists uh in Scotland in particular is that they haven't actually looked across the water to Ireland. Right. Now, the Republic of Ireland was a basket case, um I think it's fair to say 20 or 30, 40 years ago. It was it was poor, it was hemorrhaging people, uh uh and it may have been very cohesive, but uh, and in some senses moderately content, but um from an economic perspective it wasn't successful. But actually, Ireland um have adopted an exceptionally successful model, and they've taken Ireland from being uh let's just say a bottom quartile European country in terms of wealth to one of the richest countries notionally. Now, some of that is an illusion because of the way the taxes are collected, and but you know, Ireland has become a prosperous country in a way that it it simply wasn't. Scotland uh doesn't have the can't copy Ireland. That that would be not not wise. Um uh it hasn't got the power actually unless it was independent to copy Ireland in terms of and in any way that ship has sailed because there's to an extent a harmonisation of uh corporation taxes. That's uh uh uh but Scotland does have tools uh that it it could use, uh uh, and one of them is is income tax, actually, uh, or it could look at uh stamp duty. So um what is interesting, there's an election going on in Scotland at the moment, and um uh the opinion poll suggests the Scottish National Party will win again. Uh I think the reality is different from the headline, they will win the most seats almost certainly, but their vote share will probably fall from about 45% to about 30, 35. So it's a big drop in vote, but the way the opposition is split may mean they win a lot of seats. We'll have to wait and see. But they're doing the opposite of what the Republic of Ireland has done. They are ultra progressive, ultra high tax, ultra redistributionary, ultra regulatory, and they're driving business away. But for the first time, actually, and it's really quite interesting, uh, in Scotland there is there's a choice because under um Markham Wolford, who's the leader of of reform in Scotland, they've actually come up with um uh a costed proposal to cut taxes. Right. So um their initial proposal is that income tax is one percent less than the UK, it's currently more. Uh and as the economy starts to recover, they'll move to minus 3%.

Speaker 2 6:57

Uh and I think if Scotland's that creates that competitive tension again.

Speaker 1 7:00

Yeah, and I think that'd be good for England actually. Yeah. You know, I I I I support the union. I I want to see the UK um continue. But I don't think there's anything wrong with competitive tax competition uh uh i i i in the UK. Um will reform win the election in Scotland? I don't think they will this time. But Scotland is quite sick, you know, i i uh uh uh um economically, culturally uh sick, I think. And I think uh the cultural differences between the average Scottish voter and the average English voter is not as great as people consider there is uh there is still a classical liberal bent in a proportion of the population, actually. Yeah uh and I think people are beginning to see uh that Scotland is failing, it's you know significantly underperforming. So I think in the medium term there's a little bit of hope actually, reform won't win this time, but maybe ideas like that might win next time. But to your question of the SNP dodge ability, if Scotland has been independent, there would have been a death spiral, you know. And ultimately, post that death spiral, what would have happened, maybe there would have been a free market revolution, because I think that's the only way a country like Scotland can get out of it. And just the last point I would I would make on this is that there is a precedent of something going horribly wrong and quick recovery and quick redemption. And if we if we look to the Republic of Ireland in the global financial crisis, didn't have their own central bank, so they weren't able to print money uh and in the way that the UK government uh was. Uh Ireland uh had a massive property boom, the this Celtic tiger idea. And uh what then happened was the banking system seized up, the economy collapses, absolutely collapses, and the fiscal deficit absolutely mushrooms in Ireland, and they're heading towards an unsustainable public debt level. What is their response? It is to cut unemployment benefit by 20%, to cut teachers' pay by 20%, to cut nurses' pay by 20%. They designed a plan that everyone had to, they explained this was an emergency. Yeah. Uh the pain was shared across a lot of people, not just one or two, which I think is the right way if in a situation like that you can't be vindictive. Um and the result was a very quick recovery. Ireland's paid down its public debt, it's been growing at regularly north of 5% per annum. So we've done the opposite, not just in Scotland, but in Britain as a whole, we've taken short-term fixes. Uh we have regulated, we've taxed a bit more, we've controlled, uh, we have been very generous on welfare, and but actually all the time it's slightly undermining the edifice.

Speaker 2 9:59

Yeah. And does do these reforms only happen in crises?

Why Reform Usually Needs Crisis

Speaker 2 10:05

Is it possible to sort of course correct rather than be facing the cliffs before you can, you know, scramble for action?

Speaker 1 10:14

It's a good question. Uh and um I I suspect there has to be a crisis of some variety. I mean, i if you look um in the British example, 1976-77, you know, um the UK uh facing very high inflation, significant labour problems uh with the with the unions, and um a feeling of despair, and eventually actually uh an emergency loan from the IMF, which forced the Labour government to change TAC and actually uh adopt some cuts themselves. And that I think probably the Thatcherite Revolution would have been a lot harder without that event. Um certainly the example I gave in Ireland came out of an emergency. We're seeing similar things happen in Greece, actually.

Speaker 2 11:07

You know, there is a I mean Southern Europe is probably doing better than the wine-drinking countries are probably doing a bit better than the beer-drinking countries uh economically, if it's only cyclical, who knows?

Speaker 1 11:18

But I agree with that. I mean uh Britain, France, and Germany are all for subtly different reasons, actually, seriously struggling. Uh uh and um the two that are in most trouble out of those two are, in my view, are Britain and and France, actually. Because I think they've got unsustainable budget deficits, they've got very high public uh debt levels, and I think they've also got, certainly in the British case, an extraordinarily inefficient state. So Britain, in a way, has almost got the worst of all worlds, it's got increasingly high taxes, very high debt, and a state that is not actually delivering. You know, at least in France, there's a sort of slight feeling it's its health service is a bit better than ours, you know. Um I don't think it's a model we should follow, but um um uh but France has um got far too much debt as well, and it's got a political paralysis which is is quite threatening for it, I think.

Speaker 2 12:17

Yeah, the joke is that Britain is a hospital service with a broadcaster attached. And I like that. We kind of let's let's zoom back a bit.

Manufacturing Decline And Trade Deficits

Speaker 2 12:27

Um, back back when David Ricardo was writing, you know, he came up with, as you know better than anyone, the theory of comparative advantage where you you you don't focus on what you're good at making, you focus on what your opportunity cost is relative to what other people are making. And at the time, Britain had a kind of pretty strong comparative advantage on manufacturing textiles. Um and over time that kind of reversed, and we've transitioned away from being a country that kind of makes stuff to a country that provides services, whether it's financial or PR or whatever it might be. Do we need to go back to being a country that makes stuff to kind of be serious again?

Speaker 1 13:11

That's a good question. Uh I think we make dangerously little stuff. Yeah. Actually, we're running uh a very, and we have been for many years, a big trade deficit. The majority of that trade deficit is in manufactured goods, um, with services sometimes run a surplus, and the majority of that deficit is also with the continent of Europe, actually. We just about hold our own in terms of trade with with the rest of the world. Um I am quite Ricardian in my view. I think we should stick to our what what we're good at, but uh I think uh it's tragic that our industrial base has collapsed and that collapse is picking up actually. It's picking up for uh a number of reasons. One is our energy costs are absurdly high, uh, and we can go into that in some detail if you want. Uh um but power is still a base source of everything, even the service sector to an extent, actually, but particularly uh aspects of manufacturing. Um the minimum wage is an issue. Yeah, you know, it it's moved from being what five or six pounds an hour its inception to to quite a large number. Uh and and that means whole industries can't compete. So if you're gonna have a high minimum wage, you have to accept there's some things simply we can't compete with um uh India or something.

Speaker 2 14:32

I mean, I'll just give I'll give you a downstream example of that. Again, not in manufacturing, but in the restaurant business, a restaurant near uh near us where I live in Chelmsford, which is very good, does a good trade, does a very good quantity restaurant, pretty packed most of the time. And I asked the the owner, you know, how's it going? And she said, you know what, we just don't make any money. We we know we're full. Either I need to raise prices or something has to give on the on the kind of minimum wage side because I'm basically paying the potwash that's not much less than the assistant chef. That's correct. And I spend my whole time basically being paranoid about you know having staff standing around doing nothing. So I just send them home. Anytime there's a quiet period, I'll take the risk of sending them home in case they get, you know, I'll take the risk of it getting busy and having no one versus having them stank stand around. It's not good for the customer, it's good for not good for the employees, nor is it good for you know the business, because you've basically made it illegal for a low-skilled, young, less educated person to work for less than £9.80 an hour or whatever. You know, if it's a £9.79 an hour, no, you can't do it. But it's and that must affect the whole the whole economy, basically.

Speaker 1 15:44

It it it does. Hospitality has been hugely affected, actually, uh, as has retail. Um I mean a retail is facing a double whammy in in a way because it's been uh technology shift to online is affecting it. Uh it's uh got high energy costs and the cost of employing labour is high. So you know um the high street is in trouble. Hospitality is clearly in a lot of trouble. The thing is, uh I don't see uh this Labour government changing direction on that. I think they have it in their heads that we need to have a high cost economy, we need to have uh uh transfer payments uh and uh a flatter curve as they see it. Um it's now hitting the bone. I mean, you know, yeah uh uh you know I I eat out the same as you do, no doubt, and uh it's extremely expensive. And and and um uh that is affecting my desire to eat out actually, you know. So uh um I I completely agree with you. I don't think this government will change the direction, however.

Minimum Wage And The High-Cost Squeeze

Speaker 2 16:45

Yeah, sorry, going back to manufacturing, I'm sorry, I took you on a tangent, but going back to manufacturing, I mean the the you know, there's a big emphasis now on defence spending, for example. We need to kind of sp you know spend more. Is part of the cause of our malaise or funk the fact that we kind of we for 60, 70 years we were infantilized by not needing to protect ourselves because daddy across the pond said, Don't worry, we've got that for you. Or we had this sort of bargain with them. And I like to compare that to you know, the example of the of the Medway raids during the Anglo-Dutch wars in the kind of 17th century where these Dutch ships went all the way up the Medway and sort of, you know, all of a sudden the the British establishment was like, Oh god, we need to do something about this, we need to be able to build ships at the same pace that the Dutch are to protect ourselves. All of a sudden they copied the Dutch, they saw they had a central bank stocking, you know, we we ended up the City of London was born out of the need to finance our ability to defend ourselves, and that then you know, in some way caused some sort of manufacturing um boom as well. So, do you think we need to kind of be paranoid about our defence again to help rekindle some of that urgency?

Speaker 1 18:03

I think many of us have known that the UK's um defences were in structural decline. But I think um people have been quite shocked by what's happened in the last few weeks, actually. Yeah. You know, for the Royal Navy, which as recently as the Falkland Wars had about 60 frigates and destroyers to be unable to field one ship immediately, is quite extraordinary. And what's even more extraordinary about this is our defence budget is not small. Interesting. Yeah, yeah, you know, and I think uh uh um we spend of the order of sixty billion a year on defence. Okay. Uh now in terms of GDP, that's just over 2% or their outs. So that's in line with a lot of other European countries, so it's certainly less than we used to spend, but it's still a big number. Um I note that the French were able to put, was it, eight, ten ships out around Cyprus pretty quickly. We can't do that. So the question is why, with a country that has such an extraordinary history, military history and tradition in all three of our services, have they been hollowed out to the extent they have? And that hollowing out is operational efficiency, it is the kit they've got, uh, and it's actually the numbers. And uh, you know, if you were Prime Minister and you said, we're gonna do something about defence, uh, we're gonna double the size of the army, well good luck with that. Where are you gonna get the soldiers? You know, so you know, um uh and you have to say why are people not joining the forces? Um and I I I think there's a number of reasons uh uh for that. But I think one of them is that the country's culturally confused. So during the Falklands War, we knew what we stood for as as a country, and uh many people there was a surge in people applying to join the Army. They were joining a little late because the war had happened, but you know, they they they felt that that you know they were it was the it was a good thing to do.

Speaker 2 20:15

And the World World War II was still relatively fresh, right? So there was that sense of in the memory or in the DNA through stories from granddad or dad or whatever it was. That's right. Yeah. Now if you're a young if you're a twenty-two-year-old or something.

Speaker 1 20:30

But you know, we are being uh children are now being educated that our history is bad uh and uh this this country's wealth was ill-gotten through empire and uh uh and such factors. Of course, these are complex issues, but that is way too simplistic, uh, in my mind. Um so I think there are uh there have been all sorts of cultural changes which have made it less attractive and people not sure what they're fighting for. And I think also Tony Blair's and his weapons of mass destruction, which proved to be untrue, uh in my view at least. So people have sent their sons and daughters to fight, some have lost their lives, on what was effectively uh a far-off war, which was at best unsuccessful, and at worst fought on a on a false premise.

Speaker 2 21:20

So sorry, just getting back to manufacturing or building stuff. I mean, I asked Kristian Niemitz similar question how do we, you know, how does Britain gonna have its funk? And he says we need to kind of get back to building things again, whatever it is. And have you heard of the the acronym Banana? We're a banana republic. So banana stands for build absolutely nothing anywhere near anyone or anything or whatever it is.

Speaker 1 21:43

And yeah, we I mean I I've joked with people something similar, actually, that we've become the world's first non economy economy. What what what does that mean? It basically means that um almost half the economy is the state spending. But uh actually, even in the in the private sector, large parts of it are high. Controlled by the state. So the banking industry is regulated as you will know in financial services in the interest of your life. The power sector is highly regulated. You've got very highly agents for the actually part of the economy, I think, is is really quite small, actually. And um, but I think if we it's already wonderful, it's just a bit like saying we'll double the size of the army as we talked about a couple of minutes ago. We can sit in our office and say, Well, double the size of industry, let's just it doesn't work that way. No. Great companies uh come from an idea and confidence and uh come from economic geography and skill sets and all those sort of things. But the cost base is all wrong here, you know, unless it's very high-end, high-tech stuff. So you you've got to sort the base out. If you want to reindustrialize, we cannot do it overnight. You've got to sort the base out and you've got to create competitive advantage. You do that by having an energy sector that's fit for purpose. So not something based on on virtue signaling, something that is actually cost effective, you know. Um, and we are very fortunate that we have uh substantial assets in the North Sea. We've got um oil and gas, there's the potential to frack. I get your banana point that not in my own backyard. But um we could create, not immediately, but I would say within five to ten years. And and remember, America used to import its oil from the Middle East. It doesn't now, it's a net exporter. There's no reason we can't do the same. So you've got to get your base right. You've also got to accept that it isn't actually being kind, constantly putting the minimum wage up, because you're actually taking people out of employment. Yeah, yeah. So we've got to be realistic. It's also inflationary, by the way. So uh the the person earning 12 or 13 pounds an hour, in real terms, isn't earning that. It's just the whole curve has has shifted. And and I think our education system doesn't encourage people. I haven't I've only got one chum who's actually in industry, you know. Uh and I don't say that I might be smirking, but I'm not smirking. I think that's sad, actually. You know, uh but if you look at um schools and universities, it uh people are encouraged to do arts degrees, and uh nothing wrong with that, far from it. But um uh there's an element of people just don't consider industry. Um I wonder if that will change actually a little bit, because you can actually earn some pretty decent money, I mean, uh uh i i i in industry now. Uh um uh and uh I think it can be quite uh a rewarding career. Now we still have in some sectors some critical advantage, you know. Um but it's generally very high-end engineering, it's you know, it's F1, it's um um uh elements of defence, albeit, you know, just going back to what we talked about, the 60 billion, and where does that go? Uh you know, the thing is we've only got one tier one supplier of defence, BAE systems. So what is the right price? We don't know because we we we buy the kit from them and they set the price, and uh we meekly go along with that price.

Speaker 2 25:37

Yeah, one of my bugbears on this was the kind of ESG movement or the kind of that effectively made defence investing um um too expensive. So, you know, the the city of London or the you know international investors stopped investing in defence companies, which pushed the cost cap cost of capital up and then forced these defence companies to consolidate because therefore then you ended up with four big four primes or eight primes that then had way more pricing power rather than a decent diffusion of kind of competitive tension, um, which is a separate issue. So basically, to get to get Britain building again, we need to sort out minimum wage and sort of employment legislation, let's say, make it less risky to hire people, whether because whether it's something like the Equalities Act or things that just make it, you know, remove the power from HR departments somewhat uh to call the shots. And we need an energy policy that is um sort of yeah, not based on virtue signalling and then for importing North Sea oil from Norway at a higher price rather than actually drilling it yourself. That that mindset shift, that that points, if we were to do that, that would point to a completely different mindset shift, probably a bit of a MAGA type, you know, national spirit to want to do that again. Is that are there are you sensing in the country that the appetite for that or in Scotland, for example, you're saying that there is a sense in Scotland, for example, that you know that the sort of social democracy experiment is, you know, put on its last legs?

Speaker 1 27:17

I the

Defence Weakness And Rebuilding Capability

Speaker 1 27:18

country's deeply split, I would suggest. Uh I think there are a good number of people uh in different parts of the UK that would recognise the conversation we're having and uh think that there needs to be national renewal. Um there's an awful lot of people, though, that are quite comfortable with the ESG, let's just call it that, world. Uh and they um make a very good living from it, you know, to put it uh bluntly, the managerial state. I mean, this um the state is employing two million people more than it was at the time of COVID, um, all on pretty decent salaries, all on very attractive pensions, and there's the quasi-state, which isn't the direct state, which is around that, and you've got the university sector. Um, so you know uh there's a huge number of people who have a vested interest in keeping the status quo going. And I think you see this in opinion polls. So, you know, at one level UGAV has an opinion poll and it suggests reform are going to win 450 seats. I don't think that's gonna happen, you know. Yeah, um, you actually look at Labour won the last election on correct me if I'm wrong, but of the order of 35% of the vote of the country. Okay.

Speaker 2 28:37

Um he got fewer votes than Jeremy Corbyn, is that right?

Speaker 1 28:41

I believe that to be true, yeah. Yeah. No party at the moment, including reform, is anywhere near 35% in the polls. Okay.

Speaker 3 28:48

Right.

Speaker 1 28:49

But what I think is interesting is um the Progressive Alliance, if you and I would define that as Labour, the Greens, the Liberal Party, and the Scottish National Party are pulling high forties in the pools. In aggregate. In aggregate. The Conservative Alliance, reform, conservative, maybe restore, are maybe 51-52. That's so very, very close. So to your point, is there an appetite? There's an absolute appetite amongst some of the population who realize the country's uh going in totally the wrong direction and needs radical reform. But there's another group of people who uh have a vested interest in maintaining the status quo. Yeah. And uh that's why I think the next election is going to be one of the most consequential ever. And we could debate how much power political parties have, and that in itself is an easy subject. But um uh if the Progressive Alliance wins in 29, and on balance I don't think they will, but it's only on balance, and it's too soon to be sure, um it'll be very difficult to turn this country around because you will have then had a couple of generations of really quite heavily leftist government, and the vested interests associated with that get more and more entrenched. So I think we've got one shot at turning this round. I hope we can do it, uh, but I don't take it for granted.

Speaker 2 30:20

So you touched on this, the the I guess what people call the blob or the the deep state is what they call it in America. This sort of um Are you familiar with conquest laws? So Robert Conquest and he had three laws, but the second one was unless an organization is specifically right wing or conservative in its constitution, it will it will migrate to being a left-wing organization. And then the third law was um most mature institutions are controlled by a cabal of their enemies. So if you were to take of that what the institution stands for, its enemies. So the civil service is a kind of maybe the and there's lots of very good people that work in the civil service, but there's an argument to say the goal of the civil service is no longer to implement the democratic will of the people through as uh demonstrates as you know, in an election to a government, and then outputting policy, it's to keep itself and its own interests kind of entrenched. So this kind of blob ocracy where it doesn't matter what government is elected, they try and pull these levers and sort of, yes, Minister, we'd love to do that, Minister, but unfortunately there's you know legal ramifications. We'll cut back to you in six months with a proposal or whatever it might be. It kind of just it will never happen unless someone's willing to kind of machete the blob. Is that uh an analysis? I think Cummings that says that this is the kind of big problem, and there's no sufficient talent or appetite or will to kind of take that on. And I'll Ken, just to finish the thought experiment, you're probably familiar with Kahneman behavioural science, you know, the loss aversion, sort of a loss affects you twice as much as an equivalent gain. And so that's why he argues that reform to government is very hard because the people to lose who are losing out from that reform will fight twice as hard to stop that reform from the people trying to implement it. So there's always that mismatch of kind of you know, you don't want to lose what you've got.

Speaker 1 32:29

Yeah, you've made a uh a lot of points there. Uh I I don't think there's anything I disagree with, actually. Uh let's deal with um uh uh some of them. Um I think the first thing is uh I cannot think of a single institution in this country which is deeply conservative. The higher army uh echelons of the British Army are woke. Uh the RAF is certainly woke at the higher higher levels. Um uh we look at the police force and uh how policing is enacted here, I would suggest uh it's selective. Uh uh I th the educational establishment, the universities. Um a friend of mine was an emeritus professor at the London School of Economics, and he told me out of the 69 academic staff in his area, he believes only himself and one other voted for Brexit. Now, whether Brexit was a good thing or not a good thing isn't the point. But when you have an institution that is so one-directional, when the country as a whole was split pretty 50-50, is interesting. The BBC clearly is partial in its analysis, and and so the list goes on. So I think that contrast with the last crisis this country faced in 1977, 76, 77. Um at that point, many of the institutions were quite conservative, actually. Uh we now have had, I think, cultural capture. Uh on top of that, we've had um a legislative and uh and and legal state put in place that means that many decisions that ministers could have taken for granted can be challenged. And that the legal challenge can take years, you know, literally years. So beyond the life of a parliament. Um and then uh on on top of that, um we have uh many um elected politicians are not experts, you know. Um so uh they they come in with good intentions, but they can be run rings around. Right. So I if And they have to then pick their battles and they'll kind of yeah, yeah. Uh um so you're facing um uh you know, let's just say the Conservative lines reform and maybe the Conservative Party either reform on their own or maybe with the Conservative Party in coalition uh the next government. They are gonna face enormous challenges. They're gonna face a fiscal deficit that that is huge. They're gonna face expectations from their supporters that things can be fixed quite quickly. They can't be fixed quickly. You know. It's taken 30 years to wreck this country, and it's gonna we can change the delta quite quickly, but it's gonna take we can't change everything that's happened, you know, uh over overnight. Um you're gonna face hostility from the trade unions, uh, who are, by the way, already extremely well paid. I mean, public sector pay is well beyond the private sector. The ONS marks out public sector pay at about 10% higher than the private sector, but it's not that because public sector pensions are much higher. And um and of course, comparatives are are difficult. I'm not going to say they're not, but um uh on any measure our productivity problem, to my mind, comes from a hugely inefficient state. But that state has a vested interest. Now, I don't say this is a conspiracy, I'm not a conspiracy theorist at all, but I think the state has become like a machine. And uh, you know, Parkinson uh in uh uh set up Parkinson's law, I find it the uh the concept that the the bureaucracy grows at six or seven percent compound, and actually that has sort of happened, actually. Yeah. Um so once something is embedded, it's quite difficult to unembed it, you know. Um so I think it's like body fat. It's easy to put on but hard to hard to shift. Indeed. Yeah. Indeed. I think if we're gonna turn this round, serious hard work has to be done from vertical to vertical to vertical, with uh a counter-elite who holds broadly conservatively liberal traditional uh values uh uh to unwind what has been um I think uh uh uh a decadent uh and uh actually morally reprehensible um uh undermining of uh of the country in in the last 30 years or so.

Speaker 2 37:09

Has conservatism failed to keep up with the times or to to evolve, to to meet the challenges of a given day? And there's

The Managerial State And Vested Interests

Speaker 2 37:20

probably kind of I'll try and give a couple of examples in history to sort of to see where I'm going, to try and demonstrate where I'm going. You know, during the Irish famine, for example, there was a you know, there was a sense, this is from the interview I did with Andrew Phemister an expert in 19th century liberalism or radical liberalism and the Irish Land War, where too much of the British establishment was kind of like, well, there's a lack of supply for food, so we need to, we couldn't interfere in the market. We must let kind of let them, you know, if there's if there's people going hungry, the market will figure it out and the food will kind of be produced and sold to where where it's needed. And and that kind of didn't work in the short term. It was probably the one time sort of liberal economic principles probably met their edge case of usefulness and probably had to kind of give a bit to the other side. And you know, winding forwards to today, I would s you know, you said you're you know, you're you're you're broadly a foreigner of the follower of the Ricardian model, you know has sort of free market economics not you know, not done a good enough job, let's say, to deal with the lack of manufacturing or kind of the lack of jobs available for for for young people. And so it kind of needs to adapt to kind of rekindle, you know, you know, be relevant again.

Speaker 1 38:54

I I think it's the opposite, actually.

Speaker 2 38:56

Okay.

Speaker 1 38:57

Um I I I think uh we live in a highly managed and centralized and regulated and socialized economy. Uh and uh people seem to believe we live in a free market economy, but I think we don't. And I think if we actually uh move more in a market direction, more in a classical liberal direction, uh many of these good things would flow. I'll give you an example. I watched a video by uh Zack Polanski from a marketing perspective, it was genius. It was a picture of him running through um some pretty austere 1960s housing, uh, and he started walking slowly, and he said, Do you ever feel you can't catch up, you're working harder and harder, and all the money's going on rent, and um and he's right at one level. He has spotted a problem, but his solutions are entirely wrong. Why is uh housing unaffordable to many young people in this country? There are three or four or five reasons for for that. Um the first reason is for a long time under Mark Carney, interest rates were at zero. That puffed up asset prices. I don't think there's any any doubt about that. Uh the second reason is that the state controls planning. I'm not saying the state shouldn't have some control on planning. Uh so uh I'm not a complete, you know, building it. I think beauty, we were talking about beauty actually with one of the colleagues earlier. And I think aesthetics are a huge part of what's a good society. I'm quite Scrutonian in the case. This is what Roger Scruton tried to do with the planning commission. Yeah, I and I'm a massive fan of that. But yeah, we've reached a situation where uh frankly the planning system is completely bunged up. The second thing is, third thing is if you now if you import 12 million people, which we have done in the uh in the last 20 years into the country, and you don't build many new houses, don't be surprised if there's a housing shortage. And then the fourth thing is we've sold uh our young people pop where they've taken on enormous student loans uh for qu in some cases questionable. Well, I would say most most I'd say most cases. Well, I work at the University of Buckingham, so I've got to be careful what I say. Yes, but no, I agree with you. I completely agree with you, actually. Uh um so you know I wouldn't want I've got a son, and you know he's a bit younger at the moment, but it's a tough gig for people in their 20s and 30s. And why are they moving to the Green Party or they appear to be? Because they see that they have little hope. And they Zelen uh uh uh uh Zach Polensky is selling them snake oil, frankly. Uh but if you had a more of a free market in housing, actually house prices would wouldn't be where they are, they'd be more affordable, you know. So I would suggest it's the control that the state has in, it's not the failure of the capitalist system, it's actually the control the state's put on, and they've very cleverly branded it as a failure of uh of free market economics, it's not. No, the cap yeah, capitalism has failed so you know, so they say, but but I I think we've got a massive problem here because uh unfortunately our universities uh um are feeding, I mean, in economics where where uh where I teach, we're one of a handful of places that looks at uh monetary economics and um Austrian economics, as well as Keynesian uh uh ideas. Um that is really quite rare now, you know. Uh and um so people are being given a very partial education, I I would suggest. Uh and the the irony is I challenge you to find a single socialist country that has succeeded. A single example. I I really there are very few, if any, you know. Um on the contrary, I can show you any number of free market-based economies which have produced tremendous wealth and prosperity for people at all levels. Yeah. So um I think we've got an extremely perverse system where politicians and the blob and the state think they know best and they they centralize, and they're actually making it worse. I mean, I I can promise you one thing, if if Polanski ever became prime minister, he would wreck the housing market and he wouldn't help the people he's trying to help. It'd be quite the opposite. It wouldn't be just that industry he'd wreck. He would he he would take us um the economic consequences would be very, very you would get your crisis at that point, I promise you.

Speaker 2 43:46

Well he's very he's as you say, very slick, um, very very popular. But I think there's a probably a roof or ceiling to that popularity. There's there's at least so many people that can sign up to that. I hope so. Once you're paying tax or you're working and you're kind of you're not you're not, you know, sipping unlimited coffee in a student union somewhere with with idle, you know, doing six hours of lectures a week, you're probably you know, that that lends itself to kind of having quite communist communist tendencies. But at the moment you're kind of turning off to work every day and trying to, you know, fill up fill up the petrol tank or whatever it is. Um well, I'm glad you got on the subject of housing because as Matt knows, all roads on this podcast lead to Georgism. Um can I add a fifth factor I think you gave for? And I know you're kind of influential or have some influence in the policy making circles. Um that one thing that we can do to kind of try and normalize our tax system is to kind of you know re-underst re-educate people on the role of land. And you know, a tax that the one tax that kind of Milton Friedman, Adam Smith, Henry George, Winston Churchill, Leo Tolstoy, insert supported was a land value tax because it kind of removed you know, land, as you know, is fixed supply, so it's super inelastic. If you increase the tax on it, the supply doesn't go down, there's no dead weight loss as there is with taxing income or labour, income or um capital. I think you know a lot of the issues we have with high house prices is the fact that people just use property as an asset class. And it shouldn't be it's the store of most people's wealth, and it should that money should be redeployed into the stock market or the bond market, not sat, you know, wherever. And I think a kind of a small land value tax to replace, let's say, stamp duty and and transaction taxes, and then over time could be a probably quite unpopular, but could be something that you know even Paul Krugman is on board with uh it would bring it would bring the left and the right together in a way.

Speaker 1 45:59

I think um I'm a bit nervous of that, to be honest. Okay. Uh um I mean properties all I think we would probably agree that stamp duty is a very, very bad tax. One of the worst. Uh because uh and it's now become a significant number. When I bought my first house, stamp duty was zero per cent and one per cent. It's now from recollection zero, four, five, seven, and ten, I'm gonna say, or maybe twelve even at the top level. Uh you know that's a huge impediment to moving, you know. So uh and actually, if transactions are low, that affects kitchen retailers, decorators, dare I say estate agents, uh, you know, it has a very, very strong uh negative uh uh impact. If you're gonna reform um the way um uh property is is taxed, it's got to be done in a proportionate way and in a stable way. So it you know, one of the problems that we face in this country is no one knows where they stand. So, you know, tax the tax regime changes and complicates all the time. And actually, good government is about stability. So um um I I would say that property is already taxed quite heavily. Uh increasingly council tax is becoming used as a uh as a tool in that direction as well as uh um and I would turn the question around the other way around, actually. Can you find any aspect of life that isn't any taxed heavily in this country? Everything from insurance to flying to whatever you want to do is now taxed quite heavily. And I think we need to be very careful about introducing new taxes. To

Housing Shortages Planning And Student Debt

Speaker 1 47:44

my mind, the problem is that uh since Boris Johnson, possibly Britain's worst ever Prime Minister, in the sense that he did exactly the opposite on every single issue that he said he was going to do, yeah. Uh on every single issue virtually, um spent an extra 300 billion along with Rishi Sunak in real terms, uh since he came in power. 300 billion. Um That's just that's a big number.

Speaker 2 48:13

So can you just contextualize that? Well because the problem with it, all these billions fly around and people kind of lose.

Speaker 1 48:19

They do. Yeah. Yeah. So um uh this is an OBR number. So uh so um on the eve of COVID, the British State spent about 960 uh billion on public services. Okay. After accounting for inflation, uh the OBR estimate that somewhere between 250 and 300 billion of increased expenditure has occurred. Um that's in real terms, okay? So the state spends an extraordinary 44,000 pounds, 44, 45,000 pounds for every family in the country. That uh I mean and the question is And we've got great extra service for that spending, haven't we? I there's hardly a service. I mean, we talked about our military, nowhere to be seen. But you know, seeing I know this is a bit of a cliche, but in all seriousness, seeing a GP is not very easy. It used to be a lot easier, you know, and there's lots of other uh examples. So I think the question isn't so much taxation, it's spending. And uh we I think have services that are remarkably poor, remarkably poor. Um, so if you take health, okay. Uh um uh comparisons are difficult, I get that, but most international comparisons would suggest the UK has got a bottom quartile health service in a European context. Virtually all European countries offer health care free at the point of of need. They all have different ways of achieving that. Yeah. Um but um uh uh you know the UK is seeing the number of healthy years, the data was only out a couple of weeks ago, declining by one and a half years. I mean, this is unprecedented. You know, since penicillin or something here. Oh, I I I think longevity has uh increased virtually every year over the last two or three hundred years, and particularly since 1900, you know. Uh um and we're now starting to go the other way. You know, that that that that's pretty significant, I would suggest. And it's not down to funding, because of the £44,000 per family that's being spent on services, just about 10,000 of that is on the NHS. So the UK spending per head on health is actually I'm gonna say top quartile in a European context. And for that, we're getting third or fourth quartile health care. And when it comes to elective stuff as opposed to emergency stuff, it really is pretty poor. So, you know, um I think we've got to start a conversation as to what's wrong. Um, the NHS, and this is from my recollection, is employing about 20% more people, and the number of outcomes is declining. So, you know, it isn't money, it's it's structure, you know, and I think we need to have a grown-up conversation, you know, uh uh about that. And I think we need to have a grown-up conversation on why there are over nine million people of working age not working. If you've got the funds to fund yourself, that's fine. If you are seriously uh uh handicapped in some way, any civilized society is going to help you. Uh, but there are far too many people, I think, opting not to work, and we we need to have a serious conversation about redressing that because uh the the 350 billion that's being spent a year on welfare, and half of that's all those pension, by the way, so and the other half is not, uh, is too big a

Welfare Worklessness And Migration Pressures

Speaker 1 52:03

number. Yeah.

Speaker 2 52:03

And then you have this sort of Ponzi scheme where you have to kind of plug the gap with unskilled migration, basically, to kind of keep the keep, you know, because you've got nine million people not working and cost, you know, probably rightly or wrongly, there's a lot of jobs that, you know, the wages would have to go up to attract British people to do those jobs, and people from poorer countries are willing to do those jobs for a lower salary than you would would you ex accept that that that that the the the the thing that I guess no political party or no no one's you know the immigration thing is an issue, it's the big issue of our time, I would say, as you've probably pointed to, but it is connected to the fact it's it's not a standalone issue, it's connected to the fact that you've got a big welfare system, you've got free education, free health, and you've got a you know bureaucracy as well, um, and a high, highly regulated employment market. So all these things have to be addressed at once rather than just if you if you if you did nothing to all those other things and cut migration, we would have a big economic problem.

Speaker 1 53:08

I think um we've got a bad trade at the moment. We're we're hemorrhaging, about 250,000 people are choosing to leave this country each year. Uh many of those people are young 20-somethings, uh, who are university educated and don't think opportunity here is great. Okay. And a proportion of them are older people who have said, I'm just not prepared to pay this tax any longer for what are very poor services. Um so um we're losing really quite high-quality people, either very wealthy or affluent people, or bright young things that have uh and uh on the other side of the equation, we're importing a gross, it varies from year to year, six, eight hundred thousand people, many of whom are uh, as you point out, have pretty low skill levels, and they come from countries that are culturally very, very different to the UK. So it's not just a question of economics, it it is it is a question that has to be we don't want to live in uh uh a society which is balkanised, and there we we've we've seen uh some real issues, yeah. Uh in fact, an attack in North London just the other day on the Jewish community, for example, and what you are getting is is a Balkanisation, and that that's that's that's hopeless. You know, so I I think um Britain cannot um survive on a model of importing a vast number of people. And also not only that, there's uh Britain refuses to to cost that, but countries like Denmark have costed.

Speaker 2 54:51

Yeah, I've seen this. Can you can you this is a I guess would be a big shock to people. I think the general amongst the kind of let's say the affluent educated middle class who kind of read The Economist once a month or whatever it be would be that yes, there might be cultural impacts to immigration, but economically it's generally net positive. So that doesn't matter. I don't believe it is net positive. I mean yeah, yeah, yeah, yeah. So that's in aggregate.

Speaker 1 55:14

In aggregate. Okay. So of course, uh some people uh bring skill sets that are positive, and it would be quite ridiculous to suggest otherwise. But actually, the majority of migration, as I understand it, uh is pretty low-end uh in terms of employment. With it uh, you know, I believe I'd have to check this, that actually 85% of people that came to the UK last year either came on an educational visa or a dependency visa and did not enter the labour market. Now, uh I don't have the data in front of me, but uh Denmark has uh looked at uh migration by country and what it brings or subtracts. And some of the numbers are are startling actually. And if the state is spending £44,000 ahead, uh sorry, a family, you know, you've got to earn quite a lot of money to cover that. So, you know, i I don't think it should be um uh a surprise that um uh uh uh yes the uh employment might might fill a hole in the NHS in a in in an auxiliary role or something in the short term, but actually that is gonna cost society quite a lot economically. So I don't think many people are against migration, uh, but you need to very carefully select who is gonna add value and and and and and who's not, you know, and and and you're gonna get it wrong sometimes, of course you are, but uh um but we we s uh have got a model of pretty well open borders, and when you consider that our welfare system is amongst the most developed in the world, and countries like um uh Water and parts of Africa or or or Asia, um uh of course the the lifestyle here is attractive, so I don't blame people coming here, uh, but it it's not a sustainable economic model. It just isn't.

Speaker 2 57:13

Yeah. So you mentioned um that the the the the issue is not so much tax, obviously tax is an issue, but spending is is is the is is the coral of that. Is there any political appetite anywhere meaningfully to address spending?

Spending Cuts Before Any Tax Cuts

Speaker 1 57:35

I hope there is. Um uh I think um uh it's clearly not within the Labour Party. They don't get this.

Speaker 2 57:46

But to be fair to them, they talked again. I know they what they said and what they did was but you know, but in the first thing Rachel Reeses said, look, we found this black hole and we need to we've we we need to try you know, we've got to uh they raised taxes to address it, which obviously um but the the they there is a consensus that the public finances are out of out of whack.

Speaker 1 58:03

Yeah, yeah, they are.

Speaker 2 58:04

But the spending side is the issue.

Speaker 1 58:06

I mean, uh unfortunately the Conservative Party were in power for 14 years and they adopted socialist policies. The degree of spending increase, particularly since lockdown, uh is unprecedented in peacetime. Okay? Unfortunately, Rachel Reeves doubled down on that and has increased uh spending further, and outcomes are exceptionally poor. And and what this is is doing is well, since COVID, about one and a half million more people are in work, okay? Um all that is from the public sector, but the private sector hasn't grown its employment at all over that period. Uh so in my view, you can't really have tax cuts unless you're prepared to um uh tackle spending.

Speaker 2 59:01

So is that what undid Liz Truss?

Speaker 1 59:03

Well, that's a big debate, okay? Uh um uh I I think if you look at what had happened beforehand under Rishi Sunak, they had they had printed 400 million. Uh and uh they had funded Furlow and and and and and run up extraordinary deficits. Extraordinary deficits. Uh Liz Truss's proposals were quite modest actually. She was looking about 50 billion of tax cards. Uh and um uh I have misgivings about the way uh the central banks acted, actually. Let's leave it like that. Uh so but unfortunately the optics of that is that um set back the movement, let's say somewhat. Yeah, it has, but I think actually the analysis is wrong. Uh I think what whatever colour, whether it's light blue or dark blue, uh in uh assuming one of them or together they win, they need to be very careful to send a signal to markets that they are fiscally responsible. Now, if you look what Margaret Thatcher did in 1979, it's often forgotten. The first thing she did was raise taxes, actually. Uh I'm not suggesting we do that because we've had enormous tax increases you know in in in the last few years. Uh but um I don't think there should be any tax cuts before spending cuts have been delivered. Yeah. Uh and um I think the areas we we've got to address uh are um well you will know that um your uh your income tax thresholds have been for five or six years held. And with inflation where it is, that's actually a six substantial reduction in the value of those those thresholds. Um we need to to address the scale of the welfare budget. Um we need to look at the triple lock.

Speaker 2 1:01:15

Uh uh, something that maybe people on the right have made this kind of Faustian bargain with with the pensioners who support higher housing prices and don't want to build property because that would affect their property values, and also they have got big pensions, and so this is sort of a death handshake, maybe the Conservative Party.

Speaker 1 1:01:37

But I think this but I I go back to what the Republic of Ireland did. Yeah. They fessed up. I mean I think you know, I think we've lived in if there's an issue, it is the gross short-termism of our establishment, which effectively sees a problem, it throws money at it or whatever, and try and kicks it the can down the road.

Speaker 2 1:01:57

Like the um what was the thing Osborne did, the um to to to make it easier to get a a mortgage, the gave you a deposit guarantee scheme or something like that. It was something where you could the government contributed part of your deposit and that just pushed up prices.

Speaker 1 1:02:11

And obviously going to be counterproductive, you know. Uh but that's that's the mindset that Whitehall has, I think. We've got to get I think, you know, I i i the Conservative Party in Reform will and Restore will have their own agendas, so I can't speak for them, but they in my mind need to be explaining clearly the problem. I think a lot of people actually can see there's a problem. They instinctively know there's a uh an issue, uh, and we what we need to do is um uh plainly and simply explain what has happened. Maybe they think it's a good thing. Some people do think that, uh others do not, but at least it gives people the tools to make uh their mind up, and I would say that most rational people would say that short-term decision making and constantly throwing money at a problem has has not worked. So um there's no easy solution to to what has happened to my mind, you know. Um we're over trading, you know, uh uh and the pain is gonna have to be shared. But to use the Irish analogy, and actually what's happened in Eastern Europe as well, recovery can be very quick. This country has still got phenomenal strategic advantage in many areas. It's got a financial services industry that is extremely strong, it's got cultural assets, you know, um that it's got sport. I mean, you know, where else has got the Premier League, Wimbledon, Twickenham, Lords, you know, these are world-class assets. You might laugh and say, so what? But they're they're pretty big, actually. You know, um uh we've got our and and the and the universities and science, let's say.

Speaker 2 1:03:57

So I'll give you an example on that. Again,

Britain’s Innovation Gap And Commercial Hunger

Speaker 2 1:04:00

this let's go back to kind of the cultural mindset part of the problem rather than the policy part of the problem. I know we're kind of going back and forth between the two, but I think they're so interrelated you can't sort of just separate them out. Um example, kind of work work uh professionally with a biotech investment firm based in the US. Um one of the leading leading capital allocators to promising therapeutic science that's either developed um by universities or so they can find an interesting asset, drug asset, put a company around it, invest money into it. And um one of the one of the partners there kind of gave a talk at, I think it was Oxford, the science, sort of science group at Oxford. And he was part of a panel, he explained what they do, kind of funding, you know. And he said, you know, two observations says, look, a lot of backslapping from the panel and the audience about the quality of the science. And yeah, probably if I was to be fair and generous, the science is as good as it is in America, right? But just again, data point of one and all that. But normally, after these things in America, when I'm around in the drinks bit after, I have these people crawling all over me for funding, giving me their card, asking me, you know, how can we work together? Can you can you I've got this asset, it's really promising. I need some money to kind of finance the trial process. In in the UK, it was just there's none of that. There was no commercial, you know, it was either a bit too snooty or a bit too kind of like there's no kind of commercial hunger. And so the kind of that desire to kind of culturally go get them and build.

Speaker 1 1:05:41

It's I I think you've hit on something that's really important, actually. Um we've both work in the city, or have I used to work in in the city, and um the London stock market, when I started out, it was 10% of the global stock market. Yeah. Um It's about three percent of the global stock market um today. But the lead America has got on technology, AI, quantum, all these things is absolutely mind-boggling. China in second place. Europe and Britain way, way Britain's probably in a better position than much of Europe, but it's not other not of the races here. If you um I was out with a friend of mine recently who's a wealth manager, and he said to me, he put it very starkly, and he said that there's been something like five British stocks that have been a five-bagger in the last five years. Now, five-bagger means it's gone up five times. Uh he said there's over 500 American companies that have done that same thing, you know. Uh you look at the FTSE 100, the biggest companies are companies like Shell or Unilever or BP or Rio Tintu or whatever, you know, all great companies, no one's knocking them. But they're all old economy stocks. Contrast that with the the biggest 10 American stocks, which are about 10 times the size, by the way. Or China, yeah. Yeah, and and uh we invented the Industrial Revolution. We are being bypassed on the next revolution. Now, yes, there's technology transfer, it doesn't mean to say it's all over, but that's a massive issue. So our politicians are fiddling while Rome is burning, frankly. They're throwing a little bit of money at this vested interest group or that little vested interest group, but the big picture's moved on, you know? So Britain likes to think it's got influence, and I'd like to think we've got some influence as well, don't get me wrong. But this is the last generation that will have any influence if we continue acting in this very self-centered and short-term fashion, to my mind.

Speaker 2 1:07:47

And again, going back to the defence point, so Silicon Valley was born out of a defence. That's the origin of that kind of innovation was to kind of was to be at the forefront of uh so Lockheed Martin that sort of skunk works approach. And and they've having you know become pretty woke over the last 10-15 years, probably a consequence of zero interest rates and tech tech, you know, the tech the software innovation, um, they're kind of re refining their roots somewhat now. You know, companies like Palantir and Andrew, who are tech disruptors in the defence space. Palantir's actually in the UK has come out with something quite interesting. I don't know if you saw it, it literally in the news today or yesterday where the CEO of Palantir UK said to school kids, we'll do as we're doing a £60,000 a year internship program. You don't have to go to university, just show us your credentials. You skip all that debt crap, skip the six hours a week of lectures and kind of you know going out and getting whatever, and just come work for us if you're smart or you're hungry.

Speaker 1 1:08:48

And one or two of my friends have done something similar, actually. Their children uh are doing apprenticeships, one's doing an accountancy um uh apprenticeship. Uh and I think that is a genuine, genuine consideration. I'm not saying that's right for everybody, but um I think there's little doubt that many of the university degrees are not equipping people for the the workplace ahead, which is changing very, very rapidly in any case. Uh it's assuming everyone wants to go down an academic route. That's a fallacy to my mind. And I think, you know, frankly, if um Palantir came and knocking on my son's door, I'd say consider it very closely. Very closely.

Speaker 2 1:09:34

Um so we're starting, you know, you mentioned the kind of cultural assets and the kind of the foundation that Britain had has at the moment to build on. Let's start

A Path To Renewal Through Trust

Speaker 2 1:09:43

building a picture of hope. It's been a bit gloomy for the last uh part of the conversation. So kind of how do we know can it can it get worse? Probably. Yeah, probably and it probably will get worse before it gets better. But going back to that thing at the beginning about we need a proper crisis to be able to affect change. But uh what what gives you optimism, what gives you hope uh that this we're probably there's light at the end of the tunnel in some way?

Speaker 1 1:10:07

Look, this is still a blessed place to live. You know, we've got um there's a lot of smart people still here, you know. We've still got, as you point out, major strategic advantage at some of our top universities in in science and medicine. Um the cultural assets are enormously valuable, actually. Um whether it's rock music, classical music, the West End theatre, there's probably no place on the planet that is culturally creative. And that is um a fantastic thing and why a lot of people want to visit Britain actually. Uh the English language is uh an enormous strategic uh advantage. Um we have um a strategic advantage in financial services, which is in structural growth. I think that it's under threat by excessive regulation. Uh and let's get back to buyer beware, you know, take responsibility for yourself and your own decisions. Um uh we have um some great architecture, you know, and and uh uh great museums and uh all these sound ephemeral things, I get it. But I just look at um countries like Poland or the Czech Republic that were in real trouble uh when I was much younger, you know, uh uh at university at that point. And they were dominated by smokestack industries making stuff no one wanted, cars that were hopeless. Yeah. Um and Poland, on current trajectory per head, not uh will be richer than Britain in less than 10 years. So actually, you can recover. You know, look at the Republic of Ireland, we've got way stronger assets, and not to not the Republic of Ireland, it's got some it's a wonderful place. But um uh Britain has that strategic advantage, and it had what I think was the rule of law, and it had a um a quiet prediction. Almost every European country's had revolution. I fear we're now going through a revolution and one I don't much care for. But um uh uh but um there has been a stability here for for centuries, and I don't think we've gone over the cliff yet, you know. I I think we we can actually resolve this, but we can only resolve it by trusting the people, actually, and uh and giving people the opportunity to make the best that they they they can. Um so you know, I despair, I mean, just one small example. Uh this government put VAT on school fees, okay? No other country taxes education. Australia, do you know what they do? If you send your child to a private school, you get 50% off, you get a voucher because you're saving the state money. So let's do that in private education, let's do that in private health. Let's create uh a very strong state sector, take some of that capacity out so actually that people that don't want to go down that route get seen more quickly. It's a win-win scenario. We can turn this around really quite quickly if there's the will. But for that will to succeed, we've got to break this managerial defeatist culture that every problem is socialized and money is thrown at it, and uh we don't trust you, you know. Uh so we know better than you. That is the road to ruin.

Speaker 2 1:13:50

You touched on buyer beware. Yeah, you know, we don't trust you.

Speaker 1 1:13:53

I notice you smirked when I said that.

Speaker 2 1:13:55

I did. I mean, there's a but there's a sort of that paternalism of I mean, which maybe certain parts of the Tory establishment are as guilty of as you know, the left where kind of people can't be trusted, or like, you know, we there has to be a kind of elite that takes you know the decision making off the kind of the the ill-educated masses. Uh but you know the flips, I mean the kind of radical liberal tradition was very much of a kind of people are inherently good and need to be let let need to be unleashed.

Speaker 1 1:14:24

Um I trust the, as you put it, ill-educated masses. The their instincts are broadly right. I I think they're more right than the instincts of the paternalistic uh elite who profess that they know best. They don't know best, actually. Uh they're wrecking this country. Um it's quite interesting. A friend of mine became a councillor uh for the Conservative Party in uh in a part of Scotland. I won't uh be non-specific, so I don't want to embarrass them. Uh but the Conservatives held the council, and he was really looking forward to cutting in and making the council work well and uh cutting um uh uh uh the inefficiency as as he saw it. It transpired that there was only one other of his colleagues who saw things in the way he saw them. All the others thought they knew best, wanted to spend money, and he actually quipped that the Conservatives were more left-wing than either the the Liberals or the Scottish National Party in that area. They didn't actually, they they were semi-grandees that loved uh to sit there and judge others. And that's just the opposite of what should happen in a in a in a good system.

Speaker 2 1:15:37

So that can be I touched on it earlier that has has conservatism failed. Um you know, put it, let's put it culturally. I think people will say they're a socialist or a or a radical liberal or a liberal or a libertarian. If you're a if you kind of identify identify as conservative, you probably keep your mouth shut. You're probably proud of it.

Speaker 1 1:15:59

I know I I'm a I'm a scrutonian uh uh conservative, really, who believes in the classical liberal uh tradition.

Speaker 2 1:16:07

But uh and I think um the cultural cachet of being a conservative is pretty low. You kind of there's you it's it's very seen as low status to worry about things like crime or worry about, you know, um like you know the country or that the amongst the kind of this, you know.

Speaker 1 1:16:27

Yeah, you're right. My conservatism is a small C, it's not a large political party C for certain, because I think the Conservative Party has failed to defend Conservatism actually.

Speaker 2 1:16:38

And that's that's rooted in 1997? Is that where the Conservative Party kind of just kind of had to do its cap and go, look, the only way we're gonna be relevant is to ape and copy?

Speaker 1 1:16:53

That's a a really big question. Uh um what was clear is that uh and there's aspects of Thatcherism I think was fantastic, and aspects that, you know, so I'm not not a absolutist fanboy, uh, you know, uh uh but uh on uh over the piece I think it was uh a force for for good. But the heart of the Conservative Party was not that. Uh not not in the post-war period. The heart of it was uh much more wet and uh Patrician. Yeah, and and sort of paternalistic. And that's still that's still the debate that's going on in the Conservative Party today, actually, as far as I can see. That between those that don't think there's much wrong with the country uh and just a little bit of micromanaging will will sort it. And this is why I don't think Kemi Badnoch will succeed, you know, because I think too many of her party don't really buy her agenda, actually. Uh we could debate that. But uh but what was very clear is John Major comes, the rot started with John Major, but it in fairness didn't go for a cliff when uh uh uh um Major didn't really buy the the classical liberal tradition, which I think is a deeply conservative uh uh tradition, actually. Um uh and then of course um Labour wins, and the Conservative Party are in awe of Tony Blair. Uh and Theresa May says we are the nasty party. That is the most damaging comment you can make. I mean, there's two damaging comments that have been made. One is that, and the other is George Osborne's we need some austerity. We haven't had any austerity, by the way, in the public sector, but if if you yourself say there's been that, it's very difficult to counter that argument. And when you actually characterize yourself as nasty, well, don't be surprised if people think you are nasty. So the Conservative Party, in order to ruthlessly try and gain power, went along with um the Blairite agenda.

Speaker 2 1:19:02

Yeah.

Speaker 1 1:19:03

Uh that's become enmeshed and embedded in the last 25 years and is now going to be incredibly difficult to unwind. But if this place is to have any hope whatsoever, uh and the 250,000 who are leaving aren't to s reach a tipping point when it becomes even greater, uh we have to change direction. Uh now I just hope and pray that uh whoever wins the next election has given enough thought and time and understands the challenges they're facing and picks their targets very, very carefully and is you know, understands the legal framework. So they don't spend half the time in court, and they also need a little bit of luck as well, actually. Yeah uh um because stuff happens which throws you off course. When you're a fragile economy, you you're gonna be we've used our luck up because we've we've gone from being in a fiscally very strong position to a fiscally very weak position. Um but being optimistic, the government's in a weak position. Actually, individual uh and companies are got reasonable balance sheets by and large, not all of them, but um so you know it's not all bad news. This comes back to the fact is actually, I think if we had a government that articulated, they can't change everything overnight, but they set a new direction and they say, look, Britain is open for business, our direction of travel is to reduce taxation, to reduce regulation, uh use the strong clusters we've got, you'll get huge inward investment at that point. Huge inward because actually the comparatives are awful. Most of Europe's a basket case as well, by the way, and that gives me no pleasure to say that, but uh uh that that is the reality. Yeah, Germany especially um Oh it's serious, serious problems, you know. Um so I I think we can turn this around quite quickly. I'm not saying it's gonna be seamless, I'm not gonna say they're gonna be bumps on the road, um, but we need to articulate a message of hope. What our long-term aspiration is, where we want to get to. And actually, you know, when Tony Blair was Prime Minister, we had one-third state, two-thirds private sector. That is you'll have a you should have a pretty decent public sector if it's one-third, not the half roughly we've got at the moment. That is where I would see the the long-term uh aspiration. And I think that's a free society, but it's also one that's got a very strong safety net if you're in trouble, you know?

Speaker 2 1:21:29

So g again, as you've alluded to in terms of like nasty party austerity, perception is so important versus what is actually the reality. And going back to Thatcher, and I'm you know, when we first met, I was definitely that kind of fanboy, everything, you know, would love to get into arguments, find, find a socialist in Islington and kind of like, you know, yeah. Well, you're an Islington. Um you know, trying to be more measured or scientific or kind of you know, objective about it, it was a tremendous achievement for the problems that we had at the time, let's say. Uh that you know the the 70s that you you know reality that you mentioned you discussed earlier. One of the criticisms or limitations that are out there of the Thatcher period was the sort of um let's say then the naked uh greed or the the lack of the kind of nasty that kind of I get that.

Markets Morals And The Return Of Faith

Speaker 2 1:22:25

So so just can't this can I was in a debate years ago when I was in that phase where I was arguing for kind of free markets, and someone in me would have said something can can free market capitalism exist without Christianity? Without that generosity of giving from the people making the Quakers, the the tradition of and argue what people worry what where they don't maybe buy up buy into the free market idea today is that they worry that it's all about you know the lack of empathy. If you're poor, it's your own fault. You've got to pull yourself out by the bootstraps rather than that. Actually, the free market was all about charity and generosity from the people who created wealth to give it to the well um that's a great question.

Speaker 1 1:23:08

I think um I'll give you an example. Um in the 1980s, I was at a football match, and Tottenham Hotspur were playing Middlesbrough. Uh rich London team, culturally, uh less well off. Not culturally, I don't mean that, economically less well off. Northern team. Some of the Tottenham fans took out of their pockets, without exaggeration, £20 notes, which was a lot of money in the day, and just loads of money, loads of money, and it was to to to goad, and I think that was vile. You know, uh okay, I get football banter and all the rest of it, and uh part of it is is that. But um, so at one level it's funny, but another level it's a metaphor, you know. So I I think uh I've quite a unique understanding of this actually because my grandfather was um uh a minister of religion in a northern mining town uh in the north uh of England uh and um uh the the pit closed, okay. So um in in in the mid-80s, uh big employer employed about 4,000 people. Uh and um the town was devastated, you know. Uh and um uh the redundancy payments were quite big actually. Um now a proportion, I mean, uh and I get the culture, okay. So in this this town that was largely a mining town, there was a counterculture of going to chapel and uh uh and reading, and uh and and my grandfather was part of that culture and he helped uh build that culture, but there was there was also the the culture of going to the the club and drinking eight pints of beer and you know uh and um when the pit closed um unfortunately quite a lot of people spent their windfall and they didn't live long, you know. You know, but a proportion of people actually did um set up little firms and um uh and now now that town is um is different, um uh but it has recovered actually. Um so uh I I completely get the cultural revolution that was unleashed. Now the mining industry was collapsing anyway, actually, and as a matter of record, more jobs were lost in mining before Thatcher came to power. But the last bit really collapsed up there. There was the iconic strike, of course. Um and that left you know very bitter, bitter scars. And I I understand the same has happened in shipbuilding communities and you know other heavy engineering communities. I c and uh I I think one has to be extremely empathetic to that because if you've given your life to something and you're in your 50s or whatever, that's really really really tragic. But to your point though about uh Christianity, I absolutely think it's uh I think the major tragedy actually, and I think it transcends economics, is that uh we have given up on uh on faith. Um I'm not so naive to believe that everyone in the country was uh a Bible-believing uh Christian, but um uh really for a thousand years the culture has been overwhelmingly Christian. Uh uh not just here but in in in in Europe uh generally. Um and it it it um uh has been based uh uh you know strongly on on Christian values which I I think have uh uh played a huge role in in shaping uh Western civilization. Um that uh the state has become mil militantly secular, uh uh and and obviously so culturally actually. It's in their interest because they want to control Yeah, and uh I and I think that is uh the antithesis of what a good society is actually. Um I think though that there is a bit of a counter-revolution going on. Uh so um the established churches, be it the Church of Scotland or the Church of England are jokes, frankly, their leadership is uh uh dutifully two steps behind the cultural revolution. Yeah, so they're not they're not even c they're not even cool in the cutting effort revolution. So they're not even you know uh uh so why would you go along to hear is it Archbishop Sarah uh pontificate on I would? So just clarify why.

Speaker 2 1:28:04

Why is it a joke? What are they pontificating on that?

Speaker 1 1:28:08

They have adopted the state philosophy. The Church of Scotland's done it even more aggressively than the Church of England, actually. And the Church of Scotland is collapsing. It's hardly got any members under the age of 50. It's selling off buildings like Bilio for the first time since the Reformation. Not one person, I think, put themselves forward to be ordained two or three years ago. Extraordinary stats. I mean, it is functionally dead. Now it's not to say there aren't individual churches that are successful, there of course are. But it it is in catastrophic decline. The Church of England's decline is not as advanced as that, but is uh its leadership uh have abandoned Christian values. But I think there's a cut there's a counterculture uh that I don't want to over-emphasize, but is is is measurable. Tentative, but measurable. Yeah, yeah. Uh so um traditional Catholicism is rising very rapidly, uh and evangelical Christianity is seeing a substantial increase in numbers as well. So um, and often amongst quite educated middle class people. And I think it is a counterculture against uh uh woke ideology, uh uh and I think it's a counterculture against um materialism uh uh and and dare I say hedonism. Uh um uh now that is a culture that uh has been ignored and mocked by certainly the mainstream political parties, uh you know. Um uh it'd be interesting to see if that develops uh further. The BBC, and no fan of the BBC at all, but they had a rather good series uh a while back, and it was a history of faith. Uh and they pointed out that almost every civilization from the beginning of time had had faith of some sort, you know, whether it was a basic faith worshipping the sun or whatever it happened to be, or a deity, or deities, or whatever it happens to be. And um there was also an exhibition, I think, in the British Museum that accompanied this with um uh examples of um uh you know artifacts from these various numerous faiths across the world. But they also pointed out uh that uh Western Europe or uh and possibly America, but we could debate that, has become the first civilization to believe in nothing. I i our modern belief is we can be anything we want to be, even the opposite sex to what we are, you know, and uh so the end point of liberalism is is uh is um uh how shall I put it? I mean, is uh a belief in follow any anything you wish. Um the trouble is that doesn't create a unified society and uh doesn't appear to create much happiness because uh the degree of anxiety and uh uh and and health issues are increasing uh exponentially. So I think um God has been um replaced by a a very strange mixture of an economic uh control and a personal liberalism, uh uh which has broken historic norms, but there is a counterculture that is challenging that. Now, how far that will grow is too soon to say.

Speaker 2 1:31:44

And there's there's no religious behaviour has persisted. It's just it's manif it's following nothing rather than something ordained over 2,000 years. So, for example, the environment is no longer about or I I I s I think a good open goal for uh any non-socialist or conservative leaning movement would be to try and reclaim the environment in some way. As I look, it's important, we need to look after it, it's obviously we have a responsibility to but we can't take a pseudoscientific approach to it.

Speaker 1 1:32:19

Well, the uh the approach of uh um of the Millerband or uh um uh you know Al Gore. I mean, I see Al Gore is now saying we're gonna have an ice age, by the way. Have you seen he's changed his mind? He's not changed his mind about the environment, but he's changed his mind about the outcome.

Speaker 1:32:34

Right.

Speaker 1 1:32:35

Uh um I mean these this these guys are following a suit of religion. I care about the environment, and I believe you do as well, just as much as they do.

Speaker 2 1:32:44

Yeah.

Speaker 1 1:32:44

But I take a much more Scrutonian approach to that, which is a local stewardship. Uh um and um, you know, based on uh uh uh really on uh on common sense and uh and care uh for uh do the beach clean. Yeah, yeah.

Speaker 2 1:33:05

And then I think it was Lady Balfour who invented the organic movement back, you know, like about how to like look farm the land but looking after the.

Speaker 1 1:33:12

It's very obvious that if you eat um I'm gonna call it first principle food, but you know, food that's not heavily processed and has uh been well tended and cared for, you know, that is what we've done from the beginning of time. Uh and that to my mind is uh is a sane environmentalism, not uh the pseudo-environmentalism which uh actually is about delivering what I find extraordinary is why the left have adopted this, because the people that lose most are their own people who are less well off, because um if power costs are high, uh if you're on a modest income, you're spending a higher proportion of your income than someone that's wealthy. Yeah. It's crazy. Uh so I think man has always needed to believe in something, and unfortunately, we've ditched what worked and was true for something that is pseudo and um is is not true.

What is the Institute of International Monetary Research?

Speaker 2 1:34:15

We should touch upon your work uh at the University of Buckingham. What are you doing there? What's the what's the day-to-day thrust of what you're trying to achieve?

Speaker 1 1:34:22

Okay, well, the Institute of International Monetary Research uh was uh set up um, I'm gonna say 2014, that sort of period, uh, by Professor Tim Condon, who's uh uh globally renowned monetary economist. Um and the purpose is to remind policymakers, central banks in particular, that they have gone astray. So um they uh um they don't even look at, or at least the British Central Bank doesn't also, though I think they're now beginning to see that uh this has been a mistake, um they don't look at monetary measures. So they uh when they make their interest rate decisions the uh uh the MPC they're they're they're looking at uh output measures, they're they're they're they're they're looking at um uh growth, they're you know um uh and and and sort of traditional Keynesian you know comparatives. And matters came to a head uh after COVID. Uh central bank prints 400 million uh uh to effectively fund furlough and and the and the lockdown. And um there's a school of thought that uh in the left, and this is uh modern monetary theory, um, that you can effectively just print money. It doesn't matter. Yeah, and you can't, because what happened was the money supply increased dramatically uh and uh we had an inflationary shock. Now, the governor of the central bank is on record, and you can verify this, and uh as is the Fed and elsewhere, ECB I think too, of saying that post-COVID there would be deflation because the output gap was wide, you know, people were doing nothing. Uh and that, to our mind is a complete misreading of the situation. They missed a very rapid expansion in broad money, and that led to inflation. Now they've blamed the war in Ukraine and other stuff, but actually that's not really right because if you look, inflation was picking up well before the war in Ukraine. I'm not saying that there wasn't a little bit of an impact there, but uh uh uh um so we're getting a little serenading uh down the road from wonder if you can hear that. Uh but uh uh we've got an opera singer that lives in London, actually, so we do get serenaded from time to time. But uh the the bottom line is uh that um uh uh we think that the central bank should focus on controlling broad money. Right. And that is the purpose. Now Bucking's a really interesting university. Uh uh that uh we've got a very interesting set of academics um who uh focused really on uh let's just say older ideas which in the past had a lot of traction. Uh so I'm thinking of monetary economics as one example, some of the Austrian ideas, the classical liberal ideas, uh and um uh that has become rare. It's quite rare that it's taught in British universities. So we are still a bit of a bastion there. Uh there's a fascinating department um under Professor uh Eric Kaufman, uh Department of Uh Heterodox Studies. What does that mean? Heterodox is in a way heretical thought. So you know um, orthodox. So it it it is not saying we're just going to be bloody-minded and argue for something that you know uh you know, black as ever other people say white. That's not what it's about. But it's about chart challenging orthodoxy, you know. Uh and I think that is absolutely critical because it's only through competition for ideas do you actually widen the net. You know, yes. If you if we all believe in the same thing, we're probably wrong. You know, you know that from investment, you know, everyone puts a particular bet on. And it might work for a bit, but it doesn't work ultimately.

Speaker 2 1:38:54

Yeah, I think maybe it was Eric Calvin. It was about anti-fragility, or you know, this thing that Naseem Taleb goes on about, where if you don't if you if you have such cultural dominance of your ideas that and the you then and also shut down any debate around them, you then become sort of mentally obese and you don't test your ideas. They're not kind of stress-tested by reality. And so you therefore you're doing your own self like a disservice by not having that heterodox approach. And this is probably one of the issues of why this kind of centre-left social democratic consensus has failed, is because it hasn't stress-tested itself against opposing thought because it has been easier to kind of shut it down.

Speaker 1 1:39:38

I I I I I I if there's one thing that really concerns me uh about this country, even beyond economics and all the things we've discussed, it is the essential maintenance of free speech. Yeah. Uh if we lose free speech, and it's under jeopardy, let's make no bones about that, um, we're in a very dark place. Uh you have to have competition of ideas, you know. So uh but it there has to be uh the debate has to be done in a in a in a a civil fashion. And it's not being. So, you know, at the moment, if you take a wrong thought, there's an attempt to take you out as an individual, you know, yeah, you know, cancel you or whatever it might be. That is no way to treat anybody, actually. So, you know, short of the most uh ridiculous ideas, flat earth ideas, you know, uh I you know which I you know and we could debate a society is healthy through that a competition of ideas. And I think um uh the dominance of the BBC has been a real problem that's under threat now from but it's critical the likes of X and other platforms um continue to support uh plurality. Um and I think it's it's also um critical that um I think there's a real problem that our universities have become modern, uh particularly in the liberal arts, uh uh that there's a diversity of ideas. And actually, if you write a book uh uh for example, pointing out some positives from the British Empire, for example, yeah, you know, you are treated with respect for that. You know, these are complex areas and there's the balance sheets are mixed, you know. Um but we're entering a self-censorship world, actually, uh increasingly. And you see that in the professional domain as well. You know, one of the joys of uh you know doing one's own thing to an extent is you you do get a lot of academic, a lot of freedom, and uh at Buckingham we've got a good degree of freedom. Um but I don't think that's the case everywhere.

Speaker 2 1:42:01

Yeah, I mean I think um there was a there was a joke, I think probably apocryphal where John Maynard Keynes went to a went to a conference in Washington about Keynesianism, and he said he was the least Keynesian person in the room because they'd just taken his ideas to such an extreme.

Speaker 1 1:42:22

Well, the absolutely I mean And if he was to come back today, he'd be like, God, this is this this level of debt and and Well Keynes himself said if the i if the state became more than 35% of the economy, we ceased to be uh a free people. Uh so uh his ideas have been taken uh to an absolute extreme. Um Predicting the future is very difficult.

Speaker 2 1:42:44

Yes, so let's

The Long Bet

Speaker 2 1:42:45

get to the long bet, which is how I uh like to close these conversations, uh which is where you've got a 10-year time horizon to make a prediction of something you'd like to happen or something you think will happen, either or both.

Speaker 1 1:42:59

Um so over to you. Well, that's an extraordinary um question. I'm gonna answer it in uh probably a way that you may might not expect, actually. Um the the this country of my childhood, almost every norm has been overthrown. So uh I believe, yes, there was a vicious economic debate, and there has been in the in the post-war period, but politics was limited in its extent to a fairly narrow part of human society. We now have entered uh in the last 20 years or so world that politics dictates every aspect of uh our lives, uh, and it's gone well beyond economics into the the cultural and moral sphere. It's you know if you work as you do in financial services, you will know exactly what I mean by that in a regulatory sense. But um the politics of sex used to be about it's a private matter, to my mind. You know, uh uh and uh individual families should be able to bring their children up as they they see fit and not have an indoctrination or and and and whether and the same with climate policy. Some people uh might take the Polanski view as a family, others might not, but that these are private matters. So uh I suppose my uh plea is we go back to a kinder and gentler society which uh puts the individual and the family and the community in charge and says that it's okay to believe what you uh want to believe as long as it's done in a civil and civilised uh fashion, and it's not the state's role to dictate what you should believe, because the state people just shut up, they might uh go along with this nonsense, but they don't really believe it. And and and there's a warning to the state here. You know, the Communist Party in Russia thought they were all powerful until they weren't. And actually people didn't believe their lies. And there's a a real danger of a gap between what most families in this country believe and actually what the state is uh and what they're willing to tolerate. Yeah. So that if that gap gets too big, you know, uh there uh there will be trouble. So you uh uh um Yeah, sorry. Yeah, yeah. So my plea is that we go back to a much quieter and gentler society which puts the individual first. Now, I suspect you're expecting me to come up with some great technological uh AI or uh uh uh futuristic prediction, but it's a it's a humbler and more modest um uh prediction uh and hope that uh we peacefully get to a much gentler uh world where you're free to believe what you wish to believe uh in in a quiet and moderate way.

Speaker 2 1:46:05

So, yeah, I mean to to to that I I was very shocked when Professor Robert Tombs, a kind of one of the leading UK historians, uh British historians, predicted fusion technology as being cracked in the next 10 years, which was quite uh maybe um outside his warehouse, but it was you know fair enough to him.

Speaker 1 1:46:22

Uh well uh I mean what is true is we are living through a technological revolution like with AI. Yeah. I mean, some of the stuff that AI, and I'm I'm not an expert in this, far from it, but uh is extraordinary. Uh um I'm probably more some people believe it is gonna result in mass redundancies and all the rest of it, and I'm sure it will result in upheaval. Uh I'm a little bit more optimistic than that that actually new opportunities abound as well. Uh, it's not to say that some people I you know my son is 16 uh and who knows what he's gonna do with his life. Um it's unlikely he'll be doing the same thing for the next 40 years, and that would apply to anyone, actually. So there's got to be a degree of flexibility. That could be exciting, it doesn't have to be bad. You know, I mean we should be living in a land of milk and honey. This revolution that we're seeing, this cultural, this technological revolution, should be making people a lot richer. And I would say I think it's government that is stopping us achieve that. And it they need to trust us, not want to control us.

Speaker 2 1:47:31

So to to paraphrase, maybe the the radical instinct or the you know the radicalism movement has you know achieved a lot but probably been guilty of overreach, and there probably has to be a bit of retrenchment. I mean the example is I think there was a philosopher who I I think it was Yale University, I can't remember his name, he said the purpose of philosophy is no longer to ideate, but is to kind of is activism, is to force change. Everyone's an activist now. Yeah, whether you're a and that has to that has to kind of step back.

Speaker 1 1:48:02

I I and I I yes, absolutely, because actually that activism is imposing your will on someone else, and it's not your right to do that. It's not my right to do that, actually, either. So I I I you know, of course, I'm not an out-and-out libertarian. I think um uh a good society is one that has a strong cultural and respectful norms. So I'm you know, um that's why I'm very taken by Roger Scruton and people in in in that tradition, overlaid with uh a small state free market uh uh philosophy, which I think is a Christian philosophy.

unknown 1:48:38

Yeah.

Speaker 2 1:48:39

So where can people find you? Uh where do you kind of output your ideas beyond coming onto podcasts like this?

Speaker 1:48:44

Do you have a social media presence or I don't actually I don't have a social media presence at all. Well done. Keep it that way.

Speaker 1 1:48:52

And that's been a little deliberate, uh actually. Um I uh produce stuff at uh uh at uh the University of Buckingham. I uh quite active on the on the Growth Commission. I I I uh reasonably act to I might actually I'm thinking about putting together a lot of I mean you've just seen some of my essays, but they tend to be published by different people. I might do a substack in future, I haven't decided, but um that's what I the sort of direction I'm thinking. But um yeah, you can contact me at the University of Buckingham if if you wish.

Speaker 2 1:49:23

Brilliant. You and Stuart, this has been a phenomenal conversation. I feel like we could go for another two hours, but for the sake of our listeners' patience, let's uh let's give them a little break and maybe do it again uh when uh we can see if your long bet has transpired or not. That's great, and we'd be lucky today with the glorious weather. So let's hope that continues. Thanks for having us. Thanks for spending the time. Thank you, everyone. Uh see you soon. Thank you. This has been Meeting People. I've been your host, Amul Pandya. This is a podcast produced by Max Cooper with music composed by Loverman.