[This is the transcript of JP's speech delivered at the Conservative Renewal Conference in Windsor on 22 September 2012, hosted by Windsor Conservatives and supported by The Taxpayers’ Alliance and The Freedom Association]
When Philip [Lee MP] introduced me just now he left something out. He didn’t tell you, but I’m a libertarian Conservative. I’m one of those dangerous people who want to take over the government, and then leave you alone.
I am going to talk about cannibalism, about why you should not watch Downton Abbey, and about why organising the Olympics resulted in a net loss of jobs. But don’t worry, it all fits together.
Morality
I don’t know what political morality is. But I came across the best example of political immorality when somebody gave me this book. It’s “Mao the Unknown story” (Mao, The Unknown Story, by Jung Chang) – the biography of Mao Zedong who was the tyrant - sorry - self-styled Paramount Leader of China from 1949 until 1976. Now I’ve read many biographies about evil politicians; but Mao beats them all. Mao did not just kill people; he also starved them. When he collectivised agriculture and abolished all private property, people starved and there were instances of cannibalism. Do look it up – it is well documented. He also made his people into quasi-slaves. Peasants were forced to work in the fields with numbers sewn on the back of their jackets. To me, that is political immorality.
Political morality must be the opposite. It is to free people. To leave people free to pursue their dreams and their aspirations.
We don’t know what those dreams and aspirations are; as we are all individuals, it is something else for every single one. For one it is lighting a cigarette in public. For another it’s good health care. And for yet another it’s owning a Bentley.
As politicians don’t know what the aspirations are, they can’t provide them. But they can give them the means to purchase their dreams. They can make them financially independent. Money. It’s just a means to an end: you can buy the best cancer treatment in Houston. You can buy the best education.
The great divide
How can a politician provide that money? The way we go about this is the great divide between the left and the right.
Most on the left believe that the total wealth in society is zero sum; it’s is one big fixed pot of money. If you want to make a person financially independent you need to take from one, and redistribute to another. Robin Hood, stealing from Peter to pay Paul. Mr. Hood didn’t think it through, because if you take everything from the rich, where do you take next?
We on the right believe that you can make the pie grow; so that everybody benefits. You can increase the total wealth in society. Adam Smith told us how to do it in The Wealth of Nations in 1776 (The Condensed Wealth of Nations, by Eamonn Butler). You do it by using your scarce resources to increase productivity. Instead of staying in bed and watching Downton Abbey, you get out of bed and go to work. You create surpluses which you can sell, and that capital you can again re-invest. This creates an economic growth spiral, ever greater wealth. We applied Adam Smith’s theory for about 100 years; in this country. It is called the Industrial Revolution and it was the longest economic boom in history.
Morality and taxation
How do you incentivise people to become productive? By allowing them to keep as much of the fruits of their labours as possible. By keeping tax as low as possible. All countries which have seen spectacular growth cut their taxes beforehand. No country has ever taxed itself out of recession.
Adam Smith also perceived that there are two sectors in society. On the one hand, the productive sector, which takes scarce resources, increases productivity, and creates surpluses. The surpluses can be sold, and the capital can be re-invested. On the other hand, there is the unproductive sector. You take scarce resources, but instead of using them to produce surpluses, you consume your resources. You eat your capital. E.g. going to a restaurant. Or the state employing civil servants. They produce nothing. Most activities the government is involved in support the unproductive sector. It is paid for by taxes on the productive sector. If the state sector grows too large, you end up eating so much capital, that growth comes to a standstill, and the country becomes poorer. That is what is happening in Europe right now.
Shouldn’t the state produce wealth? In times of crisis individuals are too scared to invest. Shouldn’t the state build Crossrail, or build airports on estuaries? Wouldn’t that create growth? It is the remedy prescribed by our home-grown statist-in-chief Keynes; it is also very popular with BBC journalists. Let me tell you why not. It’s explained in a pamphlet written by the French (!) politician (!) Frédéric Bastiat called “What is seen and what is not seen”. What is seen is that the government creates 50,000 jobs by organising the Olympics. What is not seen is that it is paid for by taxes on the productive sector, which can therefore create fewer jobs. But it is not even like for like, as the state is less efficient in its spending than the private sector. The more jobs the state creates, the fewer there are all around.
So to conclude: if you are a politician and you want to do what is morally right, you need to allow people to pursue their dreams and aspirations. High taxes destroy prosperity, and are therefore immoral. In as far as possible, the state should stay out of our lives, and out of our pockets.
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