The two economists Hayek and Keynes agreed on one thing. They both believed that ideas and the climate of opinion determined how politicians behaved. Indeed, the Institute of Economic Affairs was set up as a result of advice from Hayek. He told Antony Fisher that a body was desperately needed that would change the climate of opinion in Britain to promote the benefits of economic freedom, markets and stable prices.
This advice is still pertinent. Both Labour and Conservative politicians seem trapped by the prevailing wisdom that dictates that there needs to be more regulation and increased government spending and control of the economy. Few politicians are putting forward policies that suggest they believe that freedom and free markets really matter for prosperity and the quality of life.
It appears that politicians, civil society leaders and teachers are trapped in what philosopher Stephen Pinker described as the “psychology of moralisation” whereby people pretend that things are much worse than they are because it makes them look morally virtuous. On the other hand, to trumpet how global capitalism has begun to transform the world for the better makes people look morally disengaged and apathetic about the problems that remain.
It is this outlook which helps dictates the climate of opinion and thus, in turn, determines how politicians behave. Those who believe in a free and prosperous society should make the case for economic freedom, but they face an uphill battle.
And what is this case? For many in the world, the extension of globalisation has literally been a matter of life and death. In 35 years, the proportion of the world’s population that is living in extreme poverty has fallen from 44% to 10%. The global middle class is growing rapidly.