SLOWLY but surely, the public is turning its back on the free market economy and reembracing an atavistic version of socialism which, if implemented, would end in tears. On some economic issues, the public is far more left-wing than the Tories realise or that Labour can believe. If you think I’m exaggerating, consider the findings of a fascinating new opinion poll from YouGov for the Centre for Labour and Social Studies.
The answers to two questions in particular made striking reading: “Do you think the government should have the power to control prices of the following things, or should prices be left to those selling the goods or service to decide?”; and “Do you think the following should be nationalised and run in the public sector, or privatised and run by private companies?”.
The results are terrifying: the UK increasingly believes that it is the state’s job to fix the “right” price, not realising that artificially low prices have always caused shortages and a far greater crisis whenever they have been tried. The great lesson of economics is that bucking markets with artificial price controls always fails; far better to address the root causes of the problem – high prices usually imply scarcity, or monopoly, or generalised inflation – or help those who are suffering directly.
No fewer than 45 per cent of the public believe that the state should have the power to control private rents, against 43 per cent who don’t; it was 74-18 for energy prices and 72-19 for public transport. Tory voters don’t support the first of these but back the other two.
Shockingly, 35 per cent of the electorate back such potential price controls on food and groceries, though 55 per cent don’t; perhaps the price-fixers need to acquaint themselves with the (horrible, product-less, queue-based, rationed) shops that used to exist in the Soviet Union during the bad old days.
As to the second question, 67 per cent believe Royal Mail should have remained in the state sector, against 22 per cent who back privatisation (the coalition, of course, has just sold the company).
By 48-43 per cent, even those intending to vote Tory don’t back the privatisation; among Ukip voters, it’s 67-25. Centre-right voters in the UK are not all classical liberal supporters of capitalism; in fact, many are poujadistes or economic nationalists.
There is overwhelming support for the nationalisation of energy companies – 68 per cent to 21 per cent. This is misguided but not surprising: the customer service of many of these firms is pathetic, prices have been shooting up as a result of state-imposed green rules that the industry previously embraced and memories are very short, with nobody remembering how bad things were when industries were state monopolies. In public ownership, all spending would have to be done by taxpayers; consumers would be at the mercy of the energy monopoly; competition would end, and inefficiencies would increase drastically.
Nationalisation would lead to an even worse outcome than what we have today; but this doesn’t mean that the status quo is correct. We need pro-consumer and pro-competition reforms, combined with a reversal of costly decarbonisation policies. If prices were falling, and customer service improving, support for nationalisation would undoubtedly fall.
There is also huge support for the nationalisation of the railways, at 66-23; again, not surprising given the weird public-private mish-mash that characterises the industry, the subsidies, the lack of transparency and accountability (who is in charge? Network Rail? The train firm?), the awful service and the lack of choice. We need a new deal for our railways – but state ownership was a disaster during the decades when it was tried.
Supporters of a market economy have a very big problem. Unless they address the concerns of the public, they will be annihilated.