David explains how energy use has declined per capita and in absolute terms since 2008, with the UK now using less energy per person than countries such as Belarus and Uzbekistan. He sets out the various renewable subsidy schemes, including the renewables obligation and contracts for difference, and how ballooning transmission costs are pushing bills higher still. The discussion also covers the practicalities and costs of alternatives such as nuclear power and gas, and how planning delays and regulatory hurdles are driving up the price of new infrastructure across the board.

The interview concludes with a look at the wider consequences of high energy costs, including the decline of British steel and fertiliser production and the broader deindustrialisation of the economy. David argues that energy costs are one of the most significant, if underappreciated, drivers of the UK’s growth struggles since 2008.

The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.

Imagine you are a seller. Of something; it doesn’t matter what, for now. Beer. Poetry. Advice on how to pair tapas with sherry and vermouth. Translations into Icelandic.

You have a choice between two (otherwise similar) markets. In Market 1, there is one huge buyer who accounts for close to 100% of market demand (=a monopsony, which, for the non-economists, is like a monopoly but on the demand side). In Market 2, there are a large number of small and medium-sized buyers, none of them big enough to have a detectable impact on overall market outcomes. Which market do you prefer?

Up until this point, it would seem like a complete no-brainer. Of course you would prefer Market 2. In Market 1, you are at the mercy of that one single buyer. In Market 2, you can choose between lots of different buyers. If one of them offers you a price or conditions that you consider unattractive, you just sell to a different one.

Monopsonies are great if you are the monopsonist, or if the monopsonist is, in some way, acting on your behalf. But they are not so great if you are a seller. That, at least, is what the Economics textbook says. It is also what the Health Economics textbook says, specifically in the context of single-payer healthcare systems: the single-payer is a monopsonist who can keep costs down, because medical professionals and suppliers have nowhere else to go. If so, the same should logically apply to a ‘National Care Service’, that is, a nationalised social care sector, and idea that is currently being floated (although we have no details yet).

There’s one problem with the monopsony argument, though: actually existing monopsonies don’t always act the way the textbook model would predict.

I noticed this a few years ago in the context of a doctors’ strike. A colleague suggested to me that we should use this strike as an opportunity to reach out to disgruntled doctors, and make the idea of free-market reforms in healthcare more palatable to them. We could tell them that the NHS is able to keep their wages down because it is a monopsonist, and that they would be better off in a pluralistic market system. It sounded like a good idea to me. Until I looked up the numbers on medical salaries in the OECD, and realised that the evidence was not on my side. British specialist doctors, in particular, are not badly paid. Sure, you can find countries where their peers do better, but these are richer countries where everyone is doing better. If we express medical salaries as a multiple of national average salaries, British specialists actually do quite well. Not exceptionally so, but enough to disprove the idea that the NHS acts as a wage-suppressing monopsonist.

Graph: Remuneration of specialist medical practitioners as a multiple of national average wage, 2024 or latest available year

-OECD Data Explorer

So what explains the difference between the textbook model of monopsony behaviour, and the behaviour of the NHS as an actually existing monopsonist? And what would a National Care Service be more similar to – the textbook model, or the NHS?

I know what you’re thinking: isn’t the issue simply that the textbook model assumes a commercially driven monopsonist, or at least, a monopsonist that acts like one? Isn’t the issue simply that the NHS is a political enterprise with soft budget constraints, which simply has no interest in making use of its monopsony powers?

But that is not quite right. American pharmaceutical companies that do business with it very much do see the NHS as a tough negotiator that knows how to make use of its dominant position – that is why the issue of drug pricing always comes up in UK-US trade negotiations. In their dealings with drug manufacturers, the NHS behaves exactly like the textbook model of a monopsonist.

So why does the NHS use its monopsony powers so selectively? Why does it use them to suppress drug prices, but not wages?

The economic literature on monopsony behaviour emphasises the proximity of ‘outside options’. Monopsonies are rarely absolute: you can be a monopsonist in one market, but that still leaves sellers with the option of exiting that market altogether, and selling elsewhere. But that cannot be the answer to the above question. Accessing outside options is much easier for an American drug company than it is for a British doctor. For the former, ‘accessing the outside option’ means bypassing the UK market (at least for a while), and prioritising the French, the German and/or the Japanese market instead. For the latter, it means emigrating to Australia. The NHS has much greater monopsony powers over its domestic medical workforce than it has over international drug companies. And yet, it uses those powers against the latter, but not the former.

To make sense of this pattern, we need to move beyond pure Economics, and take a Political Economy perspective. Forget conventional measures of market power, and instead, let’s think about the political standing of different stakeholders.

Drug price negotiations are usually not high-profile, but when the issue does come up in the context of trade negotiations, it is always presented as absolutely scandalous that drug companies want to make money. ‘US-UK drug deal could result in 229,000 excess deaths in England, analysis suggests’, reported the Guardian last month. In that context, there is no way the public would ever side with the drug companies against the NHS.

In contrast, doctors’ strikes are usually presented as a conflict between ‘the NHS’, and an unsympathetic government (which probably secretly hates the NHS, and wants to privatise it). In that context, the public will, of course, side with the doctors. In economic terms, the British government may have monopsony power, but the political economy of the health service prevents the government from using it.

Where does this leave our hypothetical future National Care Service?

A National Care Service would not have the same sacred status as the NHS, even if it were technically part of it. ‘Our National Care Service, the envy of the world, no other country has social care’ – that won’t happen. But a monopsony social care provider will nonetheless change the political economy of social care in other ways.

In his Golders Green speech, Andy Burnham told the assembled care workers that they should be among the best-paid people in the country. People may not take that entirely at face value, but if you set up expectations in that way, you will not be able to pivot to a policy of pay restraint later.

Burnham’s expectation-setting may not even be the main issue here, though. Burnham said that, because he knows that it’s popular. There are plenty of surveys on the popularity of different professions, and the results are exactly what you would expect. People like doctors and nurses. People hate politicians, journalists and business leaders. Care workers are not specifically included, but it is not wild speculation to say that they would be seen as more similar to the professions at the top end of the popularity distribution.

Burnham talked about how this popular group should be highly paid, but he did not blame anyone in particular for the fact that they are not. Because, in the current system, there is no specific person, group of persons or institution that you could blame. Nobody ‘decides’ how much social care workers should be paid. If you think they should be better paid, there is no specific person, group of persons or institution that you need to convince. It is an impersonal market outcome.

In a monopsony, it would no longer be. If we had a National Care Service, people would – correctly – start to see pay levels in the social care as the result of a political decision. There would be someone who makes that choice, and that someone would get the blame if they made a choice that people don’t like. For that reason alone, a National Care Service would almost certainly lead to higher staff costs in the sector without any concomitant productivity gains, or increases in our willingness to pay.

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The fragmented nature of the social care sector may, in fact, be a good thing, because it de-personalises decisions in the sector. In a National Care Service, these decisions would become heavily personalised, and we would be placing impossible demands on those persons.

Most of the ink spilled over the peaks and troughs of housebuilding in Britain revolves around two observations.

First, that housebuilding used to be healthier and more consistent before the Town and Country Planning Act 1947, with the exception of the collapse in housebuilding that occurred during the two World Wars for understandable reasons.

And second, that most housing provision used to be supplied by the private sector unassisted up until the full regulatory impact of the TCPA 1947 was felt. Following this, Britain went through a brief period of significantly lowered construction, most of which was delivered by local authorities, until it returned to the old trend where private provision became dominant once again but extremely bottlenecked.

The peak of British housing construction occurred in the decades between 1920 and 1940, roughly covering the interwar period. None of the subsequent periods in peacetime have achieved similar levels since. Many people have investigated this phenomenon in depth, and I won’t go through the details again, but the reasons revolve around a sequence of poorly designed regulations that dilute property rights and empower an anti-development vocal minority with unwarranted veto powers.

Now that that’s settled, I came across an iconic map of New York showing the decade in which every building was built, and it got me thinking. We know for a fact that nationwide, and in London in particular, construction of new housing in the two decades between 2005 and 2025 doesn’t come anywhere close to the levels of construction that took place between 1920 and 1940.

But the distribution is surely not homogeneous! We certainly shouldn’t expect every street and every neighbourhood to underperform the golden era of construction to the same extent, otherwise people would never complain about regeneration projects or ‘gentrification.’ So I set out to investigate.

Using data from the Valuation Office Agency and the ONS dataset catalogue, we can map out London’s neighbourhood areas and investigate the age of the housing stock in different neighbourhoods.

A neighbourhood is assigned the colour green if the area has more buildings from the interwar period than from the 2005-2025 period and red if the opposite is true.

There is of course a caveat that data from the Valuation Office Agency may be incomplete, but the data is comprehensive enough to give us a strong qualitative impression of what housing construction has been like recently.

And we see that the results are anything but uniform. Various parts of London have older housing stock and still look broadly the way they did in the interwar period. For example, in Harrow, 52 per cent of known age homes were built between 1920 and 1940.

In contrast, in some neighbourhoods in Tower Hamlets, over 90 per cent of all housing was built in the past two decades. An interesting visual (for a non-Londoner, at least) is that most of the fresher neighbourhoods with newer housing are concentrated in the centre and along the Thames.

I’ve done a similar exercise for Greater Manchester to get a topical comparison.

Greater Manchester has a greater share of new housing compared to London even in areas where interwar housing stock is dominant. Another difference is that Manchester has more neighbourhoods in its periphery where new housing outnumbers interwar housing. There is no overconcentration in the centre or along the Manchester canals.

Perhaps the most exciting visual clue about Manchester is the obvious abundance of grey areas. You can see on the map the areas of Manchester where active construction has been going on recently either due to unsupported private development or due to guided regeneration schemes. Places like Stockport and Tameside are actively growing areas at a pace that matches or exceeds the golden age of British housing construction.

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As a closing counterfactual, suppose every London borough had built new homes over the past two decades at the same pace as Tower Hamlets. By my back-of-the-envelope arithmetic, London would now have roughly 1.4 million additional homes. Even a fraction of that would have made the city livelier and more affordable.

Marx was dead right about one big thing: capital allocation matters. But his followers were dead wrong about everything else, throwing in with the wrong scheme. Not everyone will agree with my test of capital arrangements: those which maximise economic growth through Schumpeter’s “creative destruction”, specifically the formation, expansion and extinction of companies. I like this yardstick as I want everyone on the planet to enjoy my standard of living or better; and nothing but economic growth for another century or two will achieve this.

I expect there could be more, but as best I know the modern world embraces six methods for allocating capital to enterprises. They are:

• Governments

• Banks

• Industrial companies

• Families

• Criminal organisations

• Markets

At one time or another, most economies have resorted to most of them. All have mixed fortunes.

Governments are in disrepute as allocators of capital following the conspicuous failings of communism as an economic system (including its de facto abandonment by China), as well as the undistinguished record of socialism in such manifestations as post-war Britain, France under Mitterrand, post-independence Africa and India, and so on. Governments turn out to be capable of supervising catch-up policies (Russia from the twenties to the sixties; France during les trente glorieuses), but too weak to resist subsequent pressure from the industries they purport to supervise. At present, the mixed approach of China is testing this limit. Britain is a textbook example of such failings; heaven help us in our current reversion.

Banks look like the real thing: marble halls and corner offices are inherently more dignified than screaming dealers. But inspection shows up capital allocation by banks as troubled, most conspicuously in its salient post-war models, Germany and Japan, largely because of the conflict of interest attaching to banks as lenders and owners. They are reluctant to allow borrowers to go bankrupt, with each country having thousands of zombie companies and several zombie banks. Both countries are now ex-growth.

Industrial companies: Growth from the retained earnings of conventional enterprises runs up against the limits of managerial expertise, eg, Jack Welch’s General Electric in the US, or Philips and Siemens in Europe - all before reconstruction.

Conglomerates such as the zaibatsu / keiretsu of Japan or the chaebols of Korea are configured to share risk internally. They are also brushing up against their limit, as their economies have attained levels at which they no longer profit from such organisations. This said, similar arrangements seem to be emerging in Russia, combined with criminality (see below).

Families: When it comes to mature companies, proprietary sources have had marked failures, eg, throughout Latin America. There have also been some successes, eg, in Sweden, where the “Wallenberg Sphere” dominates the industrial landscape; and more tentatively in the countries of the Chinese diaspora and in liberalising India. Eventually proprietary families become unable or unwilling to continue investing, giving rise to capital insufficiency which threatens growth. Proprietary companies in the German Mittelstand restricted their ambitions accordingly and prospered until the Zeitenwende. For decades the Wallenbergs addressed capital insufficiency by penalising third-party investors with junior paper, ie, with restricted voting rights. At present, tech founders want the same privilege.

Until recently, “friends and family” were the only investors willing to take start-up risk. In the last forty years, Silicon Valley (and to a lesser extent elsewhere) has developed successful organisations for accumulating and actively managing start-up funds, subscribed by risk-tolerant private persons, for choice also offering pertinent expertise. The most successful of these companies are now demonstrating the familiar problems of monopoly.

Criminal organisations also weigh in. The most familiar example would be Las Vegas from the 1940s to the 1980s. Elsewhere, criminals operate openly in Russia: much of the economy is a de facto criminal enterprise; and discreetly in Italy: organised crime forces minority investments upon private firms. I am not aware of this last interfering with everyday management, though I expect money laundering distorts operations in cash businesses. Similar arrangements apply in those parts of Latin America in which narcotraficantes prevail.

Where applying to mature enterprises, the five methods set out above are inherently self-protective. This means they make for oligarchy or monopoly - or, to put a more positive gloss on it, fraternité: order, social solidarity and stability, valued more in some places than others.

Capital markets: Taking the period since the Industrial Revolution as a whole, it has become clear that only capital markets reliably correct errors for established companies. If properly combined with arms-length regulation, there is no better system for correcting oligarchy and monopoly. Capital markets achieve this by pricing capital from day to day, cheapening the cost of new funds for established companies which are succeeding; and by extinguishing businesses which fail, through bankruptcy or takeover. No other method has the resilience to work satisfactorily in the face of the unanticipated circumstances of the long run - that is, after the success of initial catch-up which may attach to any of the other methods for a while.

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The obvious defect is the tendency of markets to boom and bust, exacerbated in 2008 by defective regulation. But only the price formation arising out of liquid secondary markets for capital and derivatives turns out to offer the flexibility and detachment sufficient to allocate capital efficiently and consistently.

https://x.com/SoumayaKeynes

In this Institute of Economic Affairs podcast, IEA Managing Editor Daniel Freeman is joined by Soumaya Keynes, economics columnist at the Financial Times and host of The Economics Show, to discuss her new book How to Win a Trade War. They cover the collapse of the old rules based global trading system, why the US lost faith in the World Trade Organisation’s dispute settlement process, and how the first and second Trump administrations approached trade policy differently.

The conversation examines whether tariffs actually reduce a country’s trade deficit, the difference between bilateral and current account imbalances, and why China’s rerouting of supply chains through third countries has complicated efforts to reshore manufacturing. Soumaya sets out the case for and against trade barriers from a UK perspective, including the pressure Britain may face to align with EU trade defences against Chinese imports, and discusses the growing argument for protecting domestic industrial capacity on economic security grounds, drawing on historical examples including Germany’s dye industry before the First World War.

The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.

Eric Graf writes for Spain’s ABC. He has published numerous books on Spanish Golden Age Literature

As the Chávez-Maduro nightmare comes to an end in Venezuela, the country has a rare chance to tilt the odds of long-term prosperity in its favour. This requires two measures that can be taken even before elections take place: full dollarisation and subsoil privatisation.

Venezuela, like Argentina, is the poster child for why Latin American countries do not need their own currencies. Even “independent” central banks tend to cause more inflation than necessary in the best of cases. In Venezuela’s worst-case-scenario, a politicised central bank destroyed the currency after Chávez seized its control in 2007.

A decade of monetised deficits and forced devaluations left annual inflation at 65,000 percent in 2018. Street vendors wove handicrafts from worthless bolívar banknotes. Eight million Venezuelans fled; the richest Latin American country of the 1970s became poorer than Haiti.

Opposition leaders now plan to make the central bank independent. This is sound in theory; even a mildly competent technocracy would be a vast improvement over Chavista misrule. But politicians should recall that Venezuela suffered from triple-digit inflation just two years before Chávez won the 1998 election. If Venezuela holds a national currency, renewed monetary chaos remains possible. So why not choose the tried and tested, best-in-breed option?

Full dollarisation is the best alternative. According to World Bank data, the three major Latin American countries with the lowest inflation rates from 2004 to 2024—Panama, Ecuador, and El Salvador— are dollarised. Ecuador dollarised in 2000 and reduced an annual inflation rate of nearly 100 percent to single digits in less than three years (at a faster pace than Argentina’s current, exchange rate-led experiment, and without lifelines from the U.S. Treasury).

Panama, dollarised since 1903, became a low-inflation, international financial center without a central bank and without legal tender. Panamanians will choose the U.S. dollar if they remain confident in its properties as a medium of exchange, store of value, and unit of account. There is no government-enforced monopoly.

Dollarisation works because it permanently removes a government’s ability to print money. The immediate benefits are low inflation, a strong currency (in the fiat realm), and minimal currency risk for foreign investors. Most importantly, it provides insulation from reckless politicians. Ecuador’s Rafael Correa, a Chávez ally, was unable to de-dollarise and print money despite ruling for a decade with few limits on his power. The dollar remained more popular than the caudillo.

In Venezuela, the urgency is political. Abolishing the central bank benefits the people but, even in democracies, stakeholders have little incentive to do so. Bureaucrats are drawn to a central bank’s prestige; politicians like the illusion of control; intellectuals falsely equate a national currency with national sovereignty. This is why Venezuela, which is de facto dollarised, should shut down its central bank and dollarise officially while the current, “interim“ government remains in place.

Monetary stability, however, is only half the solution. The state’s ownership of the subsoil has been the other main driver of Venezuela’s downfall. This allowed the Chavista regime to destroy the oil industry in the country with the world’s largest reserves. Chávez filled PDVSA, the state-owned oil company, with cronies and subsidised Cuba’s energy needs. His 2001 hydrocarbons law chased away efficient foreign operators. Production plummeted as profits flowed into a political slush fund.

The American model of private mineral rights provides a contrary example of success. In Texas, the privatised framework decentralised risk in the 1980’s and 90’s, giving a direct profit incentive to the landowners and wildcatters who risked their own capital to experiment with new drilling techniques. This unleashed the shale revolution the following decade. Such breakthroughs are unlikely under bureaucratic and risk-averse state-owned monopolies, even if managed responsibly.

Subsoil privatisation also decentralises economic and hence political power. Texas is so strong vis-à-vis the Washington-New York corridor that Dallas recently launched a national securities exchange. This dynamic is absent under Latin America’s state-controlled model, in which mineral wealth flows from the periphery to a country’s capital to be redistributed—or squandered—at politicians’ whim.

Yet private mineral rights work in Texas because the state found the ideal regulatory framework. Oil drilling is subject to the “tragedy of the commons,” whereby competing neighbors rapidly drain underground reserves that flow through property boundaries. After the industry’s near collapse in the 1930’s, the Railroad Commission of Texas (RRC) has regulated the market successfully with production limits, spacing mandates between wells, and maximum efficient extraction rates for each reservoir. Sound regulation made oil a stable asset class with predictable cash flows and proven reserves that could serve as collateral. Inspired by the system’s efficacy, Venezuelan diplomat Juan Pablo Pérez Alfonzo used it as the blueprint for OPEC, a transnational version of the RRC.

Venezuela should now privatise its subsoil and turn PDVSA into an RRC-type neutral regulatory body. Its commercial assets can be distributed to citizen-shareholders via vouchers. The state’s remaining subsoil interests can be auctioned, with proceeds transferred to all Venezuelans via individual retirement accounts. Public lands can be opened to homesteaders. Current landowners can negotiate for mineral rights beneath their property.

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As Venezuela moves away from socialist tyranny, dollarisation and regulated subsoil privatisation would provide strong pillars for the new republic. Venezuela was already among the world’s richest countries in the mid-20th century. Under the right monetary and mineral rights framework, that feat can become permanent.

• Cambridge and the incentive problem

• Why Britain can’t build a railway

• The AI doomers are wrong about maths

Daniel Freeman is the Managing Editor and Deputy Editorial Director at the Institute of Economic Affairs

Jason Arday, who resigned as professor of the sociology of education at Cambridge on Wednesday amid accusations of extensive plagiarism, is undoubtedly an extraordinary person.

He might or might not have run 600 miles in six days to raise money for charity, been twice chased through the quadrangles of Cambridge by a masked, knife-wielding racist, or been hailed as a man of destiny by a Brazilian prophetess. But Arday has certainly made a story about academic standards and ethics dominate the news cycle for over a week, which is an achievement in itself.

Of course, we shouldn’t be too impressed. The story is not really about him but about a failure of institutions and leadership. How was it that serious allegations of academic fraud were ignored for so long? Why did the Education Faculty and Jesus College, Cambridge insist there was no case to answer? Why were journalists investigating the allegations essentially told to back off by the police?

As is so often the case this is a story that comes back to incentives.

Profit-seeking bodies can of course be taken in by charlatans and fantasists. But the profit motive provides an incentive for firms to sniff out people who are not all they claim to be.

The lack of a clear service to be delivered leaves not-for-profit organisations like charities and universities peculiarly vulnerable to pursuing the ideological hobbyhorses or personal whims of their leadership at the expense of higher goals like academic rigour, the pursuit of truth or high-quality education.

This is not a modern problem. Adam Smith had a low opinion of the quality of teaching at Oxford and Cambridge (which, until the 1820s, were England’s only two universities) which he believed had been ruined by misaligned incentives. In The Wealth of Nations, he observed that university professors in England relied on stipends paid from substantial college endowments, rather than fees from students, resulting in indifferent teaching. Smith claimed that at Oxford:

[T]he greater part of the public professors have, for these many years, given up altogether even the pretence of teaching.

None of this is to say that charitable bodies should be converted en masse into for-profit enterprises. But the price of a non-profit structure is constant vigilance. And the stakes are high. In Cambridge’s case a reputation for academic rigour built up over centuries can be seriously dented in a few years.

Oversight bodies such as college boards of trustees must have the power, information and willingness to restrain agents gone rogue. If leadership undermines the attributes that make an organisation great in the first place, whether in pursuit of feel-good politics or personal aggrandisement, it is essential there is a culture within an organisation that allows those within it to point out that the emperor has no clothes.

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IEA Podcast: Director General Lord Hannan is joined by Editorial Director Kristian Niemietz and Head of Lifestyle Economics Christopher Snowdon to discuss whether America is really richer than Britain, the Government's "social value" procurement rules, and the Cambridge academic misconduct scandal, IEA YouTube

This week on Economic Affairs

News and Views from the IEA

Infrastructure

• Britain spends as much on infrastructure as its peers, but gets measurably less: HS2 Phase 1, at roughly £470 million per route-kilometre, is the most expensive high-speed railway in any international database

• British construction productivity fell by 0.6% a year between 1997 and 2019, while the wider economy grew by 2.8%

• Every French city over 150,000 people has a tram, light rail or metro; around 30 British towns and cities of comparable size have none

• Cancelling the Birmingham to Manchester leg of HS2 will have forgone benefits worth £0.6 to £1.3 billion a year to Greater Manchester alone

• New publication from the IEA by Senior Economist Valentin Boboc sets out how planning and procurement failures have driven Britain’s Great Stagnation

Read the Report

The AI doomers are wrong about maths. Valentin Boboc, the IEA’s Senior Economist, writes in CapX on the row over AI’s recent mathematical breakthroughs.

Boboc’s piece follows two milestones that split opinion online: an Anthropic mathematician’s use of AI to find a counterexample to the Jacobian conjecture, a problem dating back to 1939, and OpenAI’s Astra model solving 10 problems in maths and computer science that had gone unsolved for at least a decade. He argues that academics dismissing the work as crude “slop” are missing the point, since both results were independently checked by peers and verification software.

Boboc’s view is that AI is simply a tool that amplifies the skill of whoever wields it, in the same way early tools boosted the output of a skilled hunter rather than an unskilled one. He notes that non-mathematicians who tried to copy the feat mostly produced incorrect results, while trained mathematicians achieved genuine breakthroughs, and points to evidence that entry-level jobs are growing fastest at firms adopting AI most aggressively, against the fear that the technology simply replaces people.

Dr Valentin Boboc, Senior Economist at the IEA, writes: “AI is a tool, in the sense that it is an extension of its user.”

Why Does It Cost Britain Four Times More to Build a Railway? Daniel Freeman interviews Valentin Boboc on his Great Stagnation chapter on Britain's infrastructure crisis, IEA YouTube

Kristian Niemietz revisits the World Bank's 1994 pension reform blueprint at the Gottfried von Haberler Conference:

If you see a list of the OECD countries that have had a tax on net wealth, you will find that a) most countries realized wealth taxes were a costly mistake and repealed them long since, and b) only Norway, Spain, and Colombia did not, with certain Swiss cantons applying them at the local level. To which a valid, initial response would be to ask why on earth Colombia appears on an OECD list in the first place.

As I argued in 2018, Colombia, a middle-income country, had no business joining the OECD. To start, it revealed a desperate urge to keep up with the Joneses of the developed world, and stagnating continental Europe in particular (a model for the local, anti-American intelligentsia). More importantly, by then the likes of France and Germany were using the OECD to coerce up-and-coming competitors—i.e. Ireland— to raise their low corporate income tax rate to a collectively agreed minimum level, all through the vicious euphemism of “tax harmonisation.”

Since then, OECD membership has burdened Colombian businesses with several new layers of onerous, international reporting requirements. This on top of local regulations, which were unnecessarily bureaucratic to begin with. Plus, Colombian statists now claim—often and chirpily—that the country must raise its tax revenue heavily to match the OECD average of 34 per cent of GDP, even though the current level (22 per cent) is already higher than that of Ireland and Chile, both far richer countries. As it turns out, a high percentage of tax revenue to GDP is no prerequisite for development.

So, the only silver lining I see to being in the OECD is that it left Colombia in the small minority of countries with a wealth tax, but only because this reinforces the message that even most high-tax European states have steered clear of such a harmful levy.

Colombia introduced a wealth tax in 1935 but suspended it in 1992, as the country, once so protectionist it was known as South America’s Tibet, timidly opened itself to global markets.

The current version of the wealth tax dates back to 2002, when former president Alvaro Uribe (2002-2010) re-introduced it via an emergency decree, claiming it was needed to pay for his security policy against the FARC guerrilla group (which was necessary and proved successful). Uribe, who should have looked for other sources of revenue for the military offensive (such as the full sale of the state-owned oil company), naturally claimed that the wealth tax was a temporary, one-off measure. Originally, it taxed net wealth starting at only ~ USD $65,000 (at the exchange rate of the time) at 1.2 per cent for both natural persons and legal entities.

The following year, however, Uribe’s government passed a law that taxed net wealth above ~USD $1 million at 0.3 per cent through 2006. And in 2006, Uribe extended the wealth tax until 2010, raising the rate to 1.2 per cent, while keeping the same threshold and dual taxpayer structure.

Former president Juan Manuel Santos (2010-2018), Uribe’s successor and a friend of Tony Blair, kept the wealth tax during the whole of his presidency. In 2014, Santos also lowered the threshold, which, due to heavy peso devaluation, fell below USD $300,000 at the 2016 exchange rate. Santos also raised the top wealth tax rate to 1.5 per cent, although his government did phase it out for corporations.

Santos’s successor, Iván Duque (2018-2022) also maintained the wealth tax for individuals throughout his presidency—again on a temporary basis—while raising the threshold to ~ $1.5 million at the 2018 exchange rate and instituting a 1 per cent flat rate.

Once socialist former president Gustavo Petro took over in 2022, he made the wealth tax permanent, again lowered the threshold to ~ USD $650,000, and once more raised the top rate to 1.5 per cent of net assets. As Petro’s uncontrolled spending worsened Colombia’s chronic fiscal crisis in 2025, Congress rejected his new attempt to raise taxes. He responded with a series of executive decrees that dropped the wealth tax threshold to ~ USD $500,000, raised the top rate to an exorbitant 5 per cent, and made corporations once again liable to pay it.

Last April, however, the Constitutional Court ruled that the economic emergency decree that changed the rules on the personal wealth tax was unconstitutional, although it upheld the corporate wealth tax decree, which Petro had justified as a response to a flooding emergency.

The wealth tax’s permanency as a temporary measure, its absurdly low thresholds by global standards, and the varying justifications for imposing it in the last 25 years highlight its inadequacy. While relatively easy to collect and never likely to cause large-scale protests, the wealth tax made little difference in terms of total tax revenue. As Lisandro Junco, the head of the tax collecting agency under Duque, put it, the wealth tax has remained far behind the income tax, the value added tax and the consumption tax as a revenue source.

Then there is the issue of capital flight. Although the wealth tax has not been its only cause in Colombia, it is broadly assumed that it is a main component. Between 2010 and 2018, over 8,000 individuals renounced their Colombian citizenship and moved abroad. At the time, the press frequently cited excessive taxation as a main incentive for leaving the country. In 2025, at least 150 Colombians with a liquid net worth above USD $1 million left permanently according to an independent report. Again, the press speculated that many of these émigrés were escaping the wealth tax.

Whether or not these were tax exiles—practically none of them stated it publicly— a chance event did bring the wealth tax into the centre of the public debate. In 2024, a Bogota football club called (oddly enough) Millonarios offered a six-month, ~ USD $500,000 contract to star player Radamel Falcao, the country’s all-time leading international goal scorer.

Falcao, who had lived abroad for two decades, was not a Colombian tax resident at the time. He accepted the contract and was able to play at first without triggering tax resident status, which sets off when an individual spends 183 days in the country during a 365-day period.

The problem arose upon his contract’s renewal in early 2025. Since Colombia’s wealth tax applies to total global net worth, Falcao, by simply becoming a tax resident, would have owed the tax authorities far more in wealth taxes alone than what the team paid him in an annual salary. So, the talks between the player and the team broke down until sponsors stepped in and agreed to pay Falcao’s tax bill if he remained on the roster (which he did until mid-2025).

The Falcao saga showed plainly why wealth taxes are so harmful. First, they are counterproductive because they target those with the ability to live quite comfortably elsewhere. And, as local football fans found out, if you punish success, you merely will keep the successful away. Falcao’s ability to remain in Colombia was an exception; accomplished entrepreneurs and investors will not have recourse to corporate sponsors that will foot their wealth tax bill. They will choose to remain in jurisdictions with lower taxes and a greater respect for property rights.

Luckily, Colombia’s new president, Abelardo De la Espriella, appears to understand the nefarious nature of the wealth tax. During his inauguration speech on August 7, he said that he will get rid of it altogether. “We must stop punishing those who invest and build wealth in our country,” he said, thus unleashing a swell of optimism among the wealth creators that Colombia needs after more than a decade of per-capita-GDP stagnation.

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So, if De la Espriella keeps his promise, Colombia is about to become yet another country that has eliminated a wealth tax (a far better club to join than the OECD). It should serve as a lesson for Britain, California, and other tax-hungry jurisdictions: when it comes to taxing net wealth, the best alternative is not to do it at all.

Their whole shtick is based on sloppy language. The post-liberals, the NatCons, the alt-rightists, the integralists, the Groypers — they base their case on a linguistic trick. Philosophers call it “equivocation”. It means using the same word to mean different things as suits your argument. They do it with two words in particular: “liberal” and “globalist”. It is worth considering them in turn.

The word liberal has an ancient and rather majestic etymology. The Latin “liber” meant a free citizen: someone who was not enslaved. At the same time, from a different derivation, “liber” also meant book.

Those two meanings were blended in the English word “liberal”. To be a liberal was to favour liberty: freedom of speech, worship, association, and contract. It thus meant, by implication, wanting constrained government, low taxes, and strong property rights. Yet it did not mean anarchy. It also meant — this is where the “book” part comes in — a virtuous application of wisdom, a humane tolerance, a generosity of spirit.

The great seventeenth-century poet and philosopher John Milton drew a distinction between “licence” and “liberty”. Licence meant being able to do whatever you liked, and was nothing special. A beast in the wilderness had licence. Liberty, on the other hand, meant making moral choices in the informed knowledge of what might follow.

When the word “liberal” entered our political lexicon from the Hispanic world in the early nineteenth century, it had that high-minded meaning. Liberals were for free trade, property rights, and equality before the law; conservatives were for tradition, aristocracy, and ecclesiastical authority.

In most of Europe, as in Latin America, the word liberal still has this meaning. Javier Milei uses it accurately, unselfconsciously and proudly. But in the United States, starting in the 1890s and accelerating during the 1930s, the word began to mean “left-wing.” Sometimes, the elision was deliberate. FDR, in particular, applied the word “liberal” to various interventionist policies in the hope that its positive connotations would rub off on them. In fact, no semantic trick could make the New Deal successful. Instead of the word gilding progressive policies, the progressive policies tarnished the word. By 1988, forlorn Michael Dukakis voters were waving placards asking, “What’s wrong with being a liberal?”

That shift had “classical liberals” (a retronym that the first-generation liberals had never applied to themselves) scrabbling about for a new moniker. In the 1940s, some began to call themselves “libertarians”, until then a word associated with French radicals and anarchists. In a 1960 postscript to The Constitution of Liberty, Friedrich Hayek bemoaned the ugliness of that “manufactured term”.

Postliberals deliberately blur the two meanings, as Roosevelt did, but from the opposite perspective. Liberalism is their all-purpose boo-word, covering both the traditional sense of “individualist” and the modern sense of “left-wing.” The idea that limited government is compatible with conservative values, that less authority for clerks, licensors and regulators means more authority for school principals, religious leaders and heads of families, is not considered.

An equivalent semantic shift is now happening over “globalisation”. Until an eyeblink ago, that word meant removing barriers so that people were not penalised for, or prevented from, buying goods or services from outside their country. But, over the past decade or so, it has taken on a new meaning. A “globalist” is now someone who wants the world to be ruled from Davos or Brussels. He wants human rights courts to strike down national governments. He wants to send entitled “gimmegrants” across every border. He wants to destroy the West.

Again, the idea that the free flow of goods, services and ideas is itself part of the Western patrimony is not considered. Two completely contradictory notions — one to do with restricting the state’s power over the individual, the other to do with increasing it — are deliberately conflated.

For a lot of people under the age of 25, the older meanings of these words don’t register at all. Argue that tariffs are making us poorer, and they will ask why you want to flood the country with illegal immigrants.

Yet Hayek was right when, in that same postscript, he argued that what was called “conservative” in the Anglo-American world was what Europeans meant by “liberal.” Why? Because the English Whig tradition, and particularly the US Constitution, its sublime culmination, is the epitome of a liberal order.

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When people in the great English-speaking democracies call themselves conservatives, the system they want to conserve is a liberal one – a system that elevates the individual over the collective, process over outcome, the rules over the rulers. The characteristics that make our way of life distinct and agreeable are all, in essence, liberal. The Western order in general, and the Anglosphere order in particular, are liberal. They make us who we are as a people. Let’s not be afraid to use the word.

The briefing, by Valentin Boboc, Senior Economist at the IEA, sets out the case that Britain’s infrastructure failures are institutional, not inevitable. It forms part of the IEA’s forthcoming book, The Great Stagnation: Why Britain Stopped Growing.

Read Briefing

Boboc finds:

• Successive governments have acknowledged that a lack of modern infrastructure is a significant impediment to economic growth in Britain.

• This is not a problem created by an unwillingness to spend public funds. Britain spends as much on infrastructure as its peers but receives measurably less. HS2 Phase 1, at roughly £470 million per route-kilometre, is the most expensive high-speed railway in any international database. British construction productivity fell by 0.6% a year between 1997 and 2019 whilst the wider economy grew by 2.8%.

• Every French city with a population above 150,000 has a tram, light rail or metro; around 30 British towns and cities of comparable size have none.

• Not building infrastructure also comes with costs, and these accumulate over time. The decision to cancel the Birmingham to Manchester leg of HS2 will have forgone, it is estimated, benefits worth somewhere between £0.6 and £1.3 billion a year to the economy of Greater Manchester alone.

• Development by right rather than by permission, narrower grounds for judicial review of planning decisions, procurement open to international competition, and land value capture on development could be part of a package that would boost productivity in infrastructure projects and replace the state’s monopoly of risk with hard budget constraints.

On the first topic, Kristian and Chris argue that America’s GDP advantage over Europe is real and widening, and push back on attempts to explain it away through hours worked, lifestyle preferences, or selective social comparisons. They point to lower energy costs, more liberal labour market institutions, and a stronger post-2008 recovery as key drivers of the gap. The discussion then turns to the Government’s “social value” procurement rules, which require companies bidding for public contracts to meet a wide range of non-economic criteria. Chris sets out how these requirements have expanded since 2012 and argues they function as a hidden tax that adds cost without adding value. The conversation closes with a discussion of a recent academic misconduct case, and what it reveals about institutional incentives and groupthink within universities.

The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.

The BBC is a great force against change. It seeks to freeze UK media in a top down take on what they think we need. Meanwhile the audience moves swiftly into an exciting competitive world of downloads, podcasts, on line videos, movies on demand and citizen journalists getting live clips of events as they happen. As a result the UK is slumping in the media rankings. The BBC slumbered and grumbled as Netflix surged from nowhere to have a turnover already six times the UK ‘s state broadcaster. They watched in denial as Amazon Prime and Disney sold subscriptions to their UK viewers who still have to pay the licence fee if they want to watch any live tv.

There are now more than 18 m Netflix users, 15 m Amazon Prime and 10 m Disney watchers in the UK. When asked what people look at first, 26 per cent say Netflix, 25 per cent BBC and 10 per cent fast rising You tube. This means the revenue, the profits and the investment are surging in the US as the UK state company sees its market share, purchasing clout, ability to attract talent and to win audiences badly squeezed by more fleet of foot and now much more powerful rivals.

The BBC looks to the licence fee for its revenues. More and more people are deciding they can live without live tv, allowing them to watch downloads without paying the tax. The BBC needs more money to spend on technology, new market outlets and on programmes, only to find Comcast, Amazon, Netflix and Disney generate 30 times as much turnover as the sinking UK challenger. We should be in a panic about this collapse. The BBC is now a minnow in the world of fast growing US media giants. 30 years ago Netflix and Amazon Prime Videos did not exist. They have already both dwarfed the BBC.

The BBC has a commercial international company with a pathetically small turnover of £2 bn. This has access to the BBC back book of recordings, but lacks sufficient cut through in the global market. It should be allowed to raise substantial new share capital from private investors with a Golden Share blocking foreign take over. It should spend the money raised on expanding its technical and global reach and adding new content. It should not have recourse to public funds. Currently it receives no cash subsidy and is profitable.

The BBC’s free website service impedes the establishment of competitors who need to charge to cover costs. This needs to be split between a factual and promotional website about the BBC and its offerings, free to users, and a site setting out BBC journalist and commentator takes on life behind a paywall like its competitors. The BBC domestic service model says it is advert free, yet it increasingly uses its remaining home market power to self promote energetically. A recent generic controversial advert has added to the stream of plugs for individual programmes and promotions of BBC people.

Debate about the BBC usually revolves around bias and editorial decisions. Defenders point to the Charter and to the understanding that government that automatically has great influence over funding and personnel should not use that influence to affect comment and coverage of the government. It is true the BBC does give a hard time to Labour, Conservative and Reform interviewees to demonstrate some fairness over parties. Critics allege deeper long term bias in the approach to climate change theory and net zero policies , where they have been a fan, to pro government bias over covid lockdowns, and an unwillingness to question the Bank of England and great quangos like the Environment Agency and Ofwat when they get things wrong. There is a perpetual reluctance to challenge the EU and pro EU soundbites. Coverage of the EU is thin and often uncritical.

My case today is all this political debate caused by the BBC being a state owned and directed broadcaster is getting in the way of growing and using the UK’s great cultural and news gathering potential. It means many do not look at the worrying loss of UK market share. The licence fee model cripples growth and requires a different approach to cost control and economic riskiness of ventures, as taxpayers rightly expect prudence in how their tv tax money is spent. The licence fee money will diminish as technology and US success undermines the numbers of people paying it.

Given the political sensitivity we need to examine new models. Offering everyone a share in a mutual BBC that paid a licence fee could create a people’s BBC. Licence fee shareholders could be guaranteed to keep at least 51 per cent of the total share capital to protect from foreign takeover.A licence fee shareholder could just have one share all the time they had a licence, preserving it as a mutual. Alternatively there could be a single initial grant with people free to buy and sell the shares. There could be a block on anyone buying more than say 10 per cent of the Corporation. The BBC would retain its Charter and requirement to be impartial.

It should set the task to review new sources of revenue and to have a planned phase out of the licence fee. It could go on to raise new capital and add new revenue schemes. It should charge for web access, and could have a variety of subscription and advert based services.

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There would be a taxpayer grant to cover World Service and related news broadcasting in support of a UK cross party foreign policy which would be pro democracy, free speech and impartial news.

Without BBC reform the nation will adopt more and more US services and the Corporation will have to cut and cut again as licence fee income falls.

Dr Boboc explains how Britain moved from the rapid railway expansion of the Victorian era to a planning system defined by lengthy approvals, an ever expanding list of statutory consultees, and unpredictable, open ended costs. He argues that a single point of approval sits alongside a near limitless number of bodies able to demand mitigations, driving up costs without anyone weighing them against each other. Using HS2 and the associated “bat tunnel” as examples, he sets out how conservation and amenity demands from local campaigners can add huge sums with little central coordination. He also compares UK costs unfavourably with countries such as Norway, Japan and France, and highlights the Lower Thames Crossing’s approvals bill as an example of money spent before any construction begins. The discussion closes with reflections on how centralising financial risk within the Treasury discourages private investment, and what reforms, such as reducing statutory consultees and diversifying who can promote infrastructure projects, might help.

The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff.

Every May, trade unionists, socialist politicians like John McDonnell MP, and associated organizations gather in the sleepy village of Burford in Oxfordshire to celebrate Levellers’ Day. There are banners, speakers, the Internationale, a “community group workshop on biodiversity,” and other festivities aimed at preserving the memory of a 17^th century political movement known as the Levellers, whom the celebrants praise for “their wish to abolish property rights and develop an equalisation of wealth.”

In other words, they honour the Levellers as ancestors of the English left. They are right to honour them, as they deserve a place in our national memory, but they are wrong to claim them exclusively for the left. An exemplar is probably the man most associated with the term Leveller during his lifetime, John Lilburne, or Free-Born John.

Born in Sunderland and the product of a Northern grammar school, Lilburne was at first a champion of religious liberty, publishing and importing unlicensed Puritan tracts. This brought him to the attention of the Attorney-General, who in 1637 prosecuted him in the Star Chamber for unlawful printing and publishing of “Libellous and Seditious books.” The Star Chamber required all those before it to take an “ex officio oath” to swear to answer all question put to them, before knowing the charges. Lilburne refused to take the oath.

He based his objection on Clause 39 of Magna Carta, the “nullus liber homo” clause that states that no free man can be stripped of his liberties unless by the law of the land. He argued that a secret oath that leads to self-incrimination was illegal, and that freedom from such abusive processes was the birthright of all Englishmen, basing his arguments on earlier work by Sir Edward Coke. This led to his moniker, Free-Born John. The Star Chamber ordered him whipped and pilloried.

By his stance, Lilburne started a movement that demanded what we would now call due process or natural justice. The legal process referred to in Magna Carta required protection against self-incrimination, notice of any charges, confrontation of accusers, trial by jury (David Lammy, take note), and freedom from arbitrary imprisonment, alongside the freedom of Englishmen to publish, speak, and follow their own religious conscience. Consider the importance of these elements in the American constitution’s Bill of Rights, and you will see how important Lilburne’s stance was. The Star Chamber was abolished in 1640.

Although Lilburne revered Magna Carta to the extent that he would carry around a copy and read it out to any unfortunate guard sent to detain him, he did not rely on the Great Charter alone. Increasingly as the years went on, he appealed to both historic law and custom and to what we would now call natural law or natural rights. Having been scarred by Charles I, Lilburne took up arms against him and drafted England’s first written constitutional proposal, the Agreement of the People, which went through several versions during the Civil War. But having vanquished the arbitrary government of Charles, he found himself subject to the arbitrary government of Cromwell, who imprisoned him. In England’s Birthright Justified, he condemned arbitrary power whether “regall or parliamentary.”

Lilburne’s experience taught him an important lesson, that victory over an abusive power does not entitle its opponents to exercise the same power themselves. In today’s world where both conservatives and leftists want to use the power of the state to punish their enemies and reward their friends, Lilburne’s lesson should be heard more.

Yet you will notice something missing from this. At no point did Lilburne call for the abolition of property rights or redistribution of wealth. Yes, the Levellers opposed inherited privilege and called for equal political status in their Agreement and the Putney Debates, but Lilburne and other prominent Levellers explicitly defended their movement against the accusation that it stood for expropriation. Indeed, they claimed that they were unjustly styled Levellers.

To be fair, Lilburne did not have a modern sense of property rights, but he explicitly defended every person’s right securely to enjoy what was his own, including his rights, and denied that government possessed authority to equalise estates. He and his comrades opposed monopolies, privileged corporations, arbitrary taxation, and politically-conferred advantage (or cronyism, as we might call it today.)

The reason why Levellers’ Day celebrates a proto-Marxist version of Leveller thought is a conflation between the movement of Lilburne, Overton, and Rainsborough, and the movement known as the Diggers, or “True Levellers,” led by Gerald Winstanley, who really did believe in the expropriation of property and the redistribution of wealth, and who were crushed by Cromwell just as much as Free-Born John and his colleagues.

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Yet we owe the trade unionists, and particularly the Workers Educational Association of Oxford, a great debt. When no-one else was preserving the memory of Lilburne and his colleagues, they did. But Lilburne belongs neither to socialism nor to any political party. He belongs to the history of liberty. His simple demand was that every Englishman, however mean his condition, should stand equally shielded by the protection of the law, free from the arbitrary decisions of those in power. In the history of English freedom, few names should be celebrated more than that of Free-Born John.

It is easy for frustrated netizens to portray shrinkflation as a greedy tactic deployed by profit-seeking corporations to line their own pockets. After all, customers are served smaller portions, while businesses get to minimise their own expenses by offering less of a product at a fixed price.

However, upon closer examination of the macroeconomic issue, it soon becomes clear that shrinkflation is, in fact, a desperate survival mechanism deployed by struggling business owners to counter large-scale economic disturbances. Due to inflation and relentless overhead costs, local cafe owners must allocate more capital to acquire resources, including paying for electricity, water, and rising rent. Without reducing serving sizes, local businesses would be unable to maintain financial viability, threatening many with permanent closure. Therefore, by maintaining satisfactory prices while modifying portion sizes slightly, businesses can secure sufficient revenue without pushing away regular customers with skyrocketing price hikes.

Moreover, local enterprises are not entirely to blame. According to The Guardian, Australia’s headline inflation rates spiked to an astonishing 4.6% in March, especially after a recent 33% surge in fuel costs triggered by escalating geopolitical conflicts in the Middle East. As energy and transport costs explode globally, the damage extends far beyond the hospitality sector, affecting many major supply chains around the world. But for local cafes, this means the cost of basic operational processes, such as delivering fresh produce and powering kitchen appliances, instantly escalates alongside national inflationary trends. Crucially, employers must also adjust employee wages to align with the rising cost of living; consequently, to offset soaring overhead costs, businesses are pushed to produce more efficiently. Unfortunately for café-goers, this means trimming portion sizes to avoid instantaneous price hikes.

Of course, businesses do not adopt these strategies purely out of goodwill. Driven by the reality of consumer sensitivity, cafes must continuously adapt how they operate to ensure they generate enough profit without losing valuable customers. The average Australian employee spends just $18.52 on lunches and snacks across an entire workweek; when a single standard cafe meal spikes to $23, it becomes clear that even minor price increases could effectively exclude a portion of Australians from the casual dining market. Therefore, shrinkflation may actually be crucial in ensuring basic dining options remain financially accessible to the public, particularly for lower-income groups navigating socioeconomic issues who might otherwise be excluded from the market entirely.

Shrinkflation has not only impacted small businesses across Australia; it has also severely disrupted massive multinational corporations, including various giants within the fast-food industry. The impact is tremendous: shares in fast-food brands like Domino’s Pizza have suffered double-digit falls over the past few months, provoked by surging oil prices tied to conflicts involving US-Israel and Iran.

Evidently, if these multi-million-dollar companies were truly capitalising on customers through shrinkflation, their net profit margins would be expanding rapidly. Instead, because regular consumers are cutting back on takeaway expenses in response to resurgent living costs, these corporations are facing an ongoing struggle to maintain adequate revenue while supplying food on a national scale. Consequently, it is truly a struggle to keep franchises of such magnitude running efficiently while altering meal sizes to absorb the shock of various production costs.

“Fast food is a discretionary purchase, something that’s probably fairly easy to cut if your budget’s pinched, and so they might be a casualty of consumers just trading out of the category entirely,” market strategist Lochlan Halloway remarks.

Indeed, shares in prominent corporations like the Retail Food Group, which houses sub-brands like Gloria Jean’s and Donut King, have plummeted by more than 40% over the past 12 months as trading conditions continue to deteriorate. This is far from an uncommon incident.

The impact of shrinkflation on stakeholders is predominantly negative. To resolve the issue in the short term, the government could intervene through changes in choice architecture, such as enforcing mandatory warning labels on downsized products, or implementing price controls that ensure products are sold at a specific price-per-unit. However, imposing regulations onto businesses already struggling financially will severely burden them with compliance costs and excess administrative workload; these costs will inevitably be passed on directly to customers through raised menu prices or even further reduction in portion sizes. Undeniably, these interventive methods are counterproductive for corporations and consumers.

Ultimately, the most effective and neutral way to resolve shrinkflation is to allow natural market competition and consumer behaviour to gradually correct the imbalance. This way, customers can decide how to allocate their spending, while businesses will have to recalibrate their administrative and pricing structures to hold their place within the competitive free market. Shrinkflation remains a necessary buffer for producers when facing unanticipated supply chain disruptions and economic crises. If local cafes are incapable of reducing product sizes to absorb rising production costs, their chances of surviving within such competitive markets will become exceedingly slim.

https://www.gao.gov/blog/what-shrinkflation-and-how-has-it-affected-grocery-store-items-recently

https://www.nine.com.au/australia-news/aussies-fight-back-against-shrinkflation-cafes-restaurants-20260429-p5zs44.html

https://mccrindle.com.au/article/the-cost-of-work-what-we-pay-to-work/

https://www.muval.com.au/blog/cost-of-living-in-sydney

https://www.theguardian.com/business/2026/apr/29/inflation-increase-australia-rba-reserve-bank-interest-rates-fuel-iran

https://www.theguardian.com/business/2026/apr/30/asx-fast-food-shares-down-cost-of-living-australia-dominos-kfc

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When Russia launched a full-scale invasion of Ukraine in early 2022, closing its airspace to western airlines, citizens erupted with discussions over the war itself, failing to consider the economic issues behind. No one labelled its economic impacts as an inescapable constraint on consumers; that, however, is exactly what it was, and today, the world is still paying the price. But the Russian airspace closure is not an isolated case. This was followed by many similar events, from Yemeni Houthi missiles targeting shipping routes in the Red Sea, to the recent Iranian blockade on the Strait of Hormuz, swallowing up more than a fifth of the world’s oil supply. It is thus easy to determine that geopolitical conflicts have emerged as the world’s most insidious cost, while being the least acknowledged, impacting not just governments, but mainly the everyday consumers in the global economy.

Consider the journey from Helsinki to Tokyo. Before Moscow’s reciprocal airspace ban in late February 2022, Finnair’s flight would last nine hours. Today, the same journey lasts more than thirteen. These additional four hours are not just a delay in arrival time, it means more than 4,000 extra gallons of jet fuel per flight, longer crew hours, fewer flight rotations each day, and most importantly, these additional costs do not simply vanish into thin air. Airlines do not absorb the impact of these costs either – they are brutally passed on to the consumers.

Finland is not the only one affected in the market today. The Heathrow based Virgin Atlantic, responds more drastically, terminating its direct flights to Shanghai in October 2024, after 25 years of service. An anonymous spokesperson from the carrier also cited ‘significant challenges and complexities’ stemming from Russian airspace restrictions as the key reason. The contrast between its main competitor on the same route is palpable. China Eastern delivers in ten hours, Virgin Atlantic in fourteen, at higher prices and higher fuel costs. Same route, same passengers, same destination. One thriving, the other extinct.

Germany’s flag carrier, Lufthansa, has also dropped its Shanghai routes by 60%, as mandatory airspace detours have created another five hours of flight times and have driven operating costs up by 40%. Lufthansa Group’s CEO Carsten Spohr himself warned, “If you want a level playing field, we need to ensure any airline landing in Europe avoids Russian airspace. Until that happens, there will be enormous advantages to Chinese carriers.” And his claims are justified. Chinese airlines currently dominate 84% of the China-Europe market, in comparison to 60% in 2019, while European carriers dropped to just 16%. If these trends continue, Chinese airlines will soon monopolise the market.

If you believed geopolitical conflict can only disrupt you at 35,000 feet in a flying metal tube, you are wrong. The Red Sea, the waterway bridging Europe, Asia and Africa, is one of the most important shipping corridors in the world, where more than 15% of global maritime trade passes through. But the Yemeni Houthi attacks on the Red Sea in November 2023, have resulted in a nearly impenetrable passage, where cargo ships passing through the Suez Canal have dropped by 90% within the first three months. The alternative for trade between Europe and Asia/Oceania would involve rerouting around the Cape of Good Hope in South Africa and would mean an extra £800,000 in fuel costs alone for each vessel.

Consequently, freight rates have also surged, where freight rates between Shanghai and Rotterdam have risen by 80%, Egypt’s Suez Canal has lost a staggering £5.5 billion in a year. However, Egypt is not the only one paying the price. All goods travelling by sea, such as electronics, clothing, accessories and everyday appliances, arrive more expensive. Shipping companies like Evergreen are unlikely to suffer and absorb these costs. In fact, their net profit has tripled to £2.5 billion in 2024 as Red Sea disruptions became the impetus for them to exponentially increase freight fares.

Close by, right at the mouth of the Persian Gulf, a similar closure has caused a global shortage that appears to be a far graver threat. Twenty million barrels of oil passing through the strait each day, produced by our global oil powerhouses ‘the Gulf producers’, ceased overnight on the 4th of March 2026 by Iranian military forces. Its effects were immediate. Brent Crude oil skyrocketed past £95 per barrel, where the International Energy Agency commented it as the largest supply disruption in the history of the global oil market.

Oil is not the only victim. The Strait of Hormuz also carries a fifth of the world’s liquefied natural gas (LNG), primarily sourced from Qatar, where the gas market is simultaneously being damaged. Prices for consumers then quickly pile on top of one another – electricity, heating and utility prices surge up to 75%. And once again, energy companies like Octopus Energy are unlikely to absorb these wholesale costs. In the United Kingdom, household energy bills are tightly connected to gas prices through the energy price cap. This results in typical increases in gas costs that are passed down to consumers through higher electricity and heating bills.

The hidden financial burdens caused by conflicts will continue to rise until Western governments start diplomatically addressing the impacts of geopolitical tension on supply chains, instead of aggravating the situation. This would avoid sudden economic collapses the moment Yemeni militants get their hands on a missile. Each of the three cases explains it all. A geopolitical decision can be made on the other side of the world – in Moscow, in Sanaa or in Tehran. But soon, everyday consumers are the ones paying for these higher fares, higher prices and higher bills. Nobody will send the bill, but we are already paying it.

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The day after the Banksy statue appeared on Waterloo Place, I gave a talk to a delegation of American students visiting the IEA, who had heard about this statue, and for some reason (my talk was about something completely unrelated), wanted to know what my take on it was.

At first, I struggled a bit to explain it. What exactly is wrong with that statue? Why would a classical liberal like me object to it?

The statue shows a man blinded by a flag walking over the edge of a cliff, which is quite clearly meant to be a critique of fanatical nationalism. Fanatical nationalism is a collectivist ideology, which any liberal individualist would naturally oppose. So, again, what’s wrong with the Banksy statue? Banksy may have the tedious, trendy opinions of the cultural establishment, but that doesn’t mean that he can never be right. Isn’t the message embodied in this statue a message liberals should applaud?

In the end, I explained my take like this:

A critique of nationalism is valuable if you live in a nationalistic society. If this statue had popped up in 1914, it would have been a brilliant piece of art. But contemporary Britain is not a nationalistic society. Contemporary Britain is a society where nationalism is considered low-status and ‘cringe’, and where a performative anti-patriotism is fashionable. This is the country of Nish Kumar, Bob Vylan and James Felton, the country where, until quite recently, all the bookshops were full of fashionable BLM slop, and where it is controversial to say that the country’s wealth was not built on colonialist extraction. Against this backdrop, the Banksy statue serves no useful role. This is merely the cultural elite highlighting its own elite status. It is not “challenging” or “thought-provoking”, it is pure gloating and self-congratulation.

Whether you think a cultural or political message is useful or not does not just depend on whether or not you agree with it. If Banksy’s message is ‘fanatical nationalism is bad’, then I agree with that message. I also think it is a perfectly useless point to make in 2026.

I wonder why there aren’t more people of the centre-left who feel similarly about critiques of ‘neoliberalism’.

There’s a whole genre of books and articles that bash ‘market fundamentalism’, ‘neoliberal dogma’ and ‘trickle-down economics’. I obviously disagree with 99% of what the people who make those arguments are saying, but that is not what this article is about. In a previous life, I used to be a social democrat, and there has to be a parallel universe where there’s an alternative version of me who still is. Maybe he works for the Resolution Foundation. That alternative me would agree with a lot of the criticisms of neoliberalism. He would also think that neoliberalism-bashing is a perfectly useless genre in this day and age.

He would argue that critiques of neoliberalism were useful in the 1990s. The pendulum had swung too far in a pro-market direction. (Again, this is ‘alternative me’, not the actual me, speaking.) Capitalism was triumphant everywhere, coming even to Eastern Europe, China and Vietnam. In the West, a Thatcherite-Reaganite Anglo-Saxon capitalism was on the front foot, and European Social Democracy was in retreat. Globalisation was only accelerating those tendencies.

But he would also argue that we no longer live in that world today. Look at any polling on economic policy issues: there is barely an anti-capitalist policy, from nationalisation to price controls to wealth taxes, that does not enjoy the support of at least two thirds of the population. If governments were elected on that basis alone, Britain would be run by Zack Polanski, Zarah Sultana and Jeremy Corbyn. The book stores are full of anti-capitalist slop, and posting anti-capitalist slop on social media rarely fails to attract thousands and thousands of likes and retweets. The most high-profile economist of our time is Mariana Mazzucato, the most high-profile political influencer of our time is Hasan Piker.

In a world like this - do we really need yet another book or article on why neoliberalism is bad? I think that even if I were more sympathetic to the points being made in such books and articles, my answer would still be an emphatic no. If you’re a critic of neoliberalism - you’ve already won! Give it a rest!

Social democratic alternative me would argue that, yes, it is possible to have a naïve faith in markets - but in practice, hardly anyone does these days, except maybe for the five nerds from the libertarian student society. An infinitely bigger risk is that we underappreciate the benefits of markets, and harm ourselves by adopting some anti-market populist slop.

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You don’t need to be a neoliberal to see that markets do have some benefits, which both majority opinion and elite opinion appear largely oblivious to. You don’t need to be a neoliberal to see the benefits of the price mechanism, of competition, or of supply-side responses to scarcity. If you do, that makes you more pro-market than the majority of the population, and of Britain’s cultural establishment. I’d worry more about that than about Britain’s twelve remaining neoliberals.

The coalition government announced in 2010 that the triple lock would take effect in the 2011/12 financial year. The triple lock means the state pension increases by 2.5% per year, or by inflation or average earnings growth, whichever is highest. It was introduced to ensure that the state pension would increase in real terms over time. While the triple lock has virtuous intentions, its affordability has raised questions about its sustainability.

The triple lock has proved more expensive than expected, according to the Office for Budget Responsibility (OBR). In the 2025/26 tax year, the Government spent £146.1 billion on the state pension, more than on education and defence. The National Audit Office have said that the triple lock has cost three times as much as expected. The OBR has gone further, stating that the triple lock could put government finances on an ‘unsustainable path’.

In the 2025/26 tax year, the UK government spent £333.7 billion on the social security system, with around 55% of that spending going to pensioners. In the tax year of 2025/26 (from April 2025 to April 2026), the UK government collected £330 billion in income tax. While the total tax volume was £938.8 billion, government spending was £1.232 trillion, resulting in a spending deficit. The government gets most of its revenue from National Insurance, Income Tax, and VAT. Social protection (which also includes other benefits) accounted for £384 billion (30%) of government spending, and health accounted for £242 billion (19%).

All political parties are committed to the triple lock, yet individuals on both the left and the right of the political spectrum have argued for its repeal. The Institute for Fiscal Studies estimates that spending on the state pension will rise by £80 billion in today’s terms by 2070, and over half of this increase will be due to the triple lock. But under a more precarious political environment, the triple lock could cost an extra 1.5% of national income - or £44 billion in 2025-26 terms- on top of this. This highlights how the triple lock is unaffordable; reforming the pension system seems politically impossible.

Abrogating the triple lock remains controversial because most voters are older; the British Electoral Study found that 65.4% of 18-24-year-olds voted, compared to 88.6% of those over 66. Politicians from all parties are reluctant to commit to repealing or reforming it for fear of alienating those over 66, who have the largest turnout in elections. Recent political figures, such as Tony Blair, have said it is “outdated and unaffordable”, and Jeremy Hunt (former Chancellor of the Exchequer) has called it “immoral”. The criticisms of the triple lock have come from people who have previously served in government or from backbench parliamentarians. Right now, no one in the government or the opposition is willing to criticise the triple lock, as it will be unpalatable to voters aged over 66.

Many people believe that paying National Insurance goes into an individual’s pension pot, but in fact, the opposite is true. Understanding how pensions are funded remains obscure to the British public. The state pension is funded through a pay-as-you-go scheme, which relies on young taxpayers to fund it. Currently, 13.2 million people in the UK receive a state pension, and this number is increasing each year due to an ageing population.

With an ageing population in the UK and the rest of the developed world, working-age people are paying more National Insurance than they otherwise would to fund current pensioners. The pension system is revealed to be a Ponzi scheme because the money is not invested or set aside for any particular individual. The system has been reliant on new taxpayers, but age demographics have changed. We are seeing fewer young people and an increase in the number of people over the state pension age, making the pension system increasingly unaffordable.

Many critics of the triple lock have seen this as an injustice to young people, as many younger people have not seen their wages increase, while the triple lock on state pensions will increase. The triple lock has led to intergenerational unfairness: an annual transfer from young to old of up to £20 billion, compared with simply indexing payments to price increases. This has meant a generational wealth transfer from working-age people to pensioners, as it places an unsustainable tax burden on working-age citizens to fund above-inflation payments to all older adults. This has widened the intergenerational wealth gap and exacerbated living standards for working-aged people.

In the early 2000s, pensioners had roughly the same income as working-age families with children. In 2025, it was estimated that pensioners are £5,000 richer than working-age families with children, and the gap could rise to £7,000 by the end of the decade if the triple lock is maintained. This can be seen as unfair to working-age people because it means that pensioners are taking more out of the welfare state than they have put in. If the triple lock continues to increase, working-age people will have to pay the difference between what pensioners have paid in and the actual cost of maintaining it.

Britain cannot sustain the triple lock if British politicians are serious about not bankrupting the country. The triple lock has proved more expensive than anticipated and is siphoning wealth from younger generations. While pensioners are seeing an increase in real earnings from the triple lock, many working-age people will see their standard of living decline, eventually bankrupting Britain.

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President Javier Milei’s reform program in Argentina is not protected by institutions that can truly tie the hands of the next government. Rather, they depend on Milei’s party, La Libertad Avanza (LLA), and its continued hold on power.

Most of Milei’s reforms are reversible at a low political cost because, in Argentina, institutional restrictions are usually de iure, not de facto. There is also a self-inflicted fragility: Milei has governed largely by decree and has disregarded proper legislative procedures, showing the political system that this is a legitimate channel. A future government under current rival Axel Kicillof, the governor of Buenos Aires Province and a leading Peronist politician, could use the same methods to reverse Milei’s free-market reforms.

Dollarisation, which Milei campaigned for in 2023 but has not implemented, matters in this context. Not because it would be a stronger de facto restriction on future governments than others, but because it would work regardless of whether a future government wants to respect it or not.

With 18 months left in Milei’s term as president, neither law nor social consensus guarantee that LLA’s reforms will last. Polls suggest that the results of the 2027 election, when Milei will face off against Kicillof, are up in the air. The Milei government itself acknowledges this scenario when it warns about the “Kirchnerist risk” that Kicillof poses.

In the meantime, financial markets are not valuing Milei’s current economic program, but rather the probability of that program surviving a potential change of government.

In last October’s midterm parliamentary election, Milei’s LLA party obtained nearly 41 per cent of the vote compared to the Peronists’ 31 per cent. According to a hasty interpretation, the positive market reaction validated Milei’s course and ended all electoral uncertainty. But this was not the case. The October 2025 election determined seats in parliament, not the continuity of Milei’s economic program. Besides, the result came only weeks after a resounding defeat in the province of Buenos Aires in September, when the Peronists beat LLA by 13 percentage points. Milei and his party also enjoyed the explicit support of the U.S. Treasury, which backed the government politically and financially—through a USD $20 billion currency swap line—in the campaign’s final stretch.

The relevant question for investors looking at Argentina is not whether Milei won in 2025, but who will be in power in December 2027. That question remains unanswered.

A counterintuitive point is also worth considering: if the Argentine electorate, after supporting left-wing populism for nearly two decades, was able to “convert” in only two years and support a libertarian program of shock adjustment, there is no reason to assume that this conversion is permanent. A rapid shift in preferences can, by definition, be reversed just as quickly. The same, volatile opinion poll movement that allowed Milei to win in 2023 and consolidate his power in 2025 could lead to his defeat in 2027. Public sentiment is not a permanently acquired asset. Treating it as such is a fundamental error. So is equating the macroeconomic stabilisation achieved thus far with a consolidated institutional reform.

What part of Milei’s program is at risk if Peronism wins in 2027? Virtually everything.

All changes implemented by decree or administrative resolution can be reversed in the same way. Tax withholdings, deregulation by Emergency Decree, and any other measure within the Executive Branch’s discretion fall into this category. A Kicillof government does not need Congress to reinstate exchange controls, for instance: it would only require a signature to do so.

Other changes that Milei brought about do require Congressional approval to be overturned, such as the labour reform and various spending cuts. But, with a strong Peronist presence in Congress, these reversals can be implemented as swiftly as LLA’s own reforms.

Also, since the budget is the prerogative of Congress, there could be new fiscal deficits if the next government does not prioritize balanced budgets. Argentine history shows that there is a low political cost to reversing these types of fiscal reforms.

Beyond the good intentions of Milei’s new Central Bank Charter, the Central Bank’s independence does not depend on the charter either. As is the case with the other reforms, this is reversible: in Argentina, institutional restrictions may exist on paper, but are not binding in practice. There is no culture of compliance. Nor does violating such restrictions involve a high political cost.

A Central Bank that is “independent” according to the law remains, in reality, only as independent as the current Executive Branch wants it to be. It is not the case that LLA’s recent reforms lack a law to protect them. Rather, the problem is that, in Argentina, laws alone have rarely been a real institutional protection. What makes a reform irreversible is not the legal text itself. Instead, it becomes irreversible only if its undoing is more costly in political terms than leaving the reform in place. That cost depends on the precedents of compliance, not on articles of law.

Much of LLA’s reform program is reversible and its reversal has a low institutional cost. In Argentina, the continuity of any reform ultimately depends on the government’s political will, because there is no institutional constraint that truly can tie the government’s hands.

Institutionally, constructing a de facto restriction through conventional means—a law, a charter, a regulatory commitment—is extremely difficult: there is no established custom of compliance to sustain it. An Executive branch with the political will to do so can circumvent it.

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Dollarisation is different because it does not depend on compliance with a law. It is not a stronger de facto restriction than the others. Insofar as it removes local monetary power altogether, it is, perhaps, the only restriction available that does not require the next government’s compliance to function.

Britain has accidentally ended up with the kind of fragmented political landscape we would once have associated with proportional representation systems. This should, in one sense, make Andy Burnham’s life easier: at least, it gives him plenty of opponents on different sides that he can define himself against.

With that in mind, it seems like an odd choice that Burnham chose to define himself instead against an indirect predecessor who became Prime Minister 47 years before him, when he was still in primary school. Imagine having to explain this to a foreign visitor. Or imagine a French Prime Minister taking office declaring their intention to dismantle the legacy of Jacques Chirac, a German Chancellor taking office declaring their intention to dismantle the legacy of Helmut Kohl, or a Spanish Prime Minister taking office declaring their intention to dismantle the legacy of Felipe González.

But while it would be hard to explain this to an uninitiated visitor, it would make perfect sense to an observer who is familiar with British social media, where posting a statement like “I still hate Thatcher” rarely fails to attract thousands of likes and retweets (or whatever the equivalents are called on other platforms). For large sections of the British Left, Thatcher was not simply a Prime Minister whose policies they disliked, in the way a French Leftist may have disliked the policies of Jacques Chirac, or a German Leftist may have disliked the policies of Helmut Kohl. To them, she was someone who completely altered the DNA of the British economy in a way which has no counterpart elsewhere (other than maybe Chile under Augusto Pinochet), and which has never been undone. They believe that we still live in a fundamentally Thatcherite economy, and that this makes Britain markedly different from other economies. So for them, pointing out how many years have passed since she left office is missing the point: it doesn’t matter whether she left office 36 years ago, 100 years ago or a 1000 years ago, as long as her legacy is still with us, she might as well still be running the country.

Is this actually true, though? Was Thatcherism really so unique, and was it really exceptionally durable?

Let’s start with the first question. If we define ‘Thatcherism’ as simply the package of policies that were being pursued in Britain during the Thatcher or the combined Thatcher-Major years, then no, Thatcherism was not unique. With differences in degree and composition, we can see similar policy trends in many other places.

Take Thatcher’s flagship privatisation programme. Britain got there earlier than most, but just a few years after Thatcher left office, the retreat of the state from its role as an active player in the economy became an OECD-wide trend. As the OECD points out:

“[B]y the middle of 1990s, privatisation had gained momentum in most OECD Member countries. In Europe activity accelerated, especially among those who had joined the Economic and Monetary Union (EMU), as they embarked on an ambitious economic reform programme in order to meet the requirements of the convergence criteria of the Maastricht Treaty. […] During this period OECD privatisation proceeds in each year averaged around 0.3 percent of the GDP.”

One would not normally associate France, Belgium, Sweden, Finland or Italy with ‘neoliberal fundamentalism’, but even these countries sold off a lot of their state-owned enterprises in the 1990s. In France, much of that happened under the left-wing government of Lionel Jospin.

The curtailing of the growth in government expenditure, the cutting back of industry subsidies, stricter control of the money supply, the trend towards a broader tax base with fewer exemptions and lower marginal rates – none of these policy trends were unique to Britain.

Note, I am not saying that the radicalism of the Thatcher government is overstated, and that they were really just a normal Western European government like any other. They were not. Britain’s Economic Freedom score increased by about two points on a ten-point scale, which is rare outside of post-socialist transition economies. However, Britain also started from a position of more heavy-handed state interventionism, so if Britain liberalised more than others, this is in part because there was simply more liberalising to be done.

As a policy package, Thatcherism was not unique. We can find similar trends in plenty of other economies as well, even if Britain applied them earlier and with greater vigour than most.

As for the question of whether we still live in ‘a Thatcherite economy’ – that depends on what we mean by that. What would it mean to ‘undo Thatcher’s legacy’? If only a full reversal of the Thatcher-era reforms counts, then no, that has not happened. British Airways and BT have not been renationalised, exchange rate controls have not been brought back, secondary picketing enjoys no special legal immunity, and the coalmines have not been reopened. But this is not a sensible way to classify an economic model, because the policy issues of our time are not identical to those of the 1980s. If ‘a Thatcherite economy’ means ‘a liberal market economy’, then in that sense, there has indeed been a partial reversal. Since the early 2000s, Britain’s Economic Freedom score has fallen from around 8.6 out of 10 to 7.9 today. That’s not communism, but the idea that Britain is a liberal outlier in a statist Europe is completely wrong.

Thatcherism was neither unique, nor was it, in a broader sense, particularly entrenched and long-lasting. So where do people get this idea from?

What made Thatcherism special, both compared to political trends in other countries at the time and compared to British politics since then, was that it was a much more self-conscious, self-aware ideological project. To give just one indication of this, an unusually large number of Thatcher-era politicians wrote political memoirs later, explaining what they were trying to achieve while in government. I somehow doubt that either Keir Starmer or Rishi Sunak will ever do that.

The Thatcherites were unusually open and vocal about what they were doing. Lionel Jospin, the former French Prime Minister, may have sold off state-owned enterprises as well, but the last thing he would have done is extol the virtues of privatisation. He would just do it, and be quiet about it.

In political folk memory, governments with a clear ideological orientation that we can easily name and describe loom larger than governments without such an orientation. It is not the case that there have been no meaningful policy changes since Thatcher, and that everything since then has just been ‘tinkering’. But the policy changes that have happened since then have not been part of an easily identifiable, overarching ideological project. We therefore notice them less, and overstate the extent of continuity since the last government which had such a project. And that was the Thatcher government.

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The break from Thatcherism has already happened. It did not start with Andy Burnham: he just articulates it. But articulation matters. If we spend the next 100 years under governments that, step by step, take us further and further away from a liberal market economy, but without ever explicitly saying that that is what they are doing, then in 100 years’ time, people will still think that they live in a Thatcherite economy. Burnham is, at last, explicitly drawing a line under that period, and makes clear that he wants present-day Britain to be something very different. What Burnham’s alternative is remains to be seen, but at least, we will be able to judge it on its own merits, rather than continue to pretend that Britain is still governed by Margaret Thatcher’s ghost.