Among Britain\’s three main political parties, there is near unanimity about how the economy should be run: markets should generally be free so that individuals have the right incentives to generate wealth. If the state intervenes, its touch should be light.
There is plenty of argument in Parliament, but little debate of ideas. That is because, in macroeconomic terms, the prevailing ideology has served Britain well.
Those are, of course, microeconomic matters, not macro. And the basic points are all Thatcher\’s. As Owen Barder put it, in one of his more perspicacious moments:
Thatcher and Lawson should be commended for persuading the chattering classes that increasing trend economic growth is primarily challenge for microeconomic policy (ie improving the supply side), whereas controlling inflation is primarily a challenge for macroeconomic policy. This seems obvious today but it was a total reversal of the then prevailing wisdom which saw macroeconomic policy targeting growth (demand management) and microeconomic policy controlling inflation (price controls, wage freezes, hire purchase controls etc).