We’re told that the disastrous collapse of all we hold most dear over the past couple of years has put the final nail in the coffin of neo-liberalism. You know, this free markets, light regulation, lots of trade and economic liberty that we here at the ASI uphold. We’ve even been told that the experiment, started when Maggie Thatcher came to power, has failed, that having been tried it has been found wanting, and now it’s time for the clever people to tell us all what to do.
Oxford Economics says that gross domestic product per person has fallen to £22,700 on average in 2009, down from £23,000 in 2005 after adjusting for inflation – a fall of 1.3%. In Labour’s first two terms GDP per head grew 12.6% and 8.3% respectively.
Sorry, what’s that? The worst economic crisis since whenever has simply shaved off the last few years of economic expansion? We’re all living in the gross and absolute poverty that we were immiserated by those four short years ago?
So, err, what was GDP per capita in 1979 then? From here, it was £11,500 and in 2005 it was £19,842*. So that’s a 73% rise in general living standards (no, GDP isn’t perfect for this but it will do) over the time period of our experiment in neo-liberalism.
Now of course I cannot speak for you, only for myself, but I would say that a near doubling of economic wealth in a mere generation is a pretty good advertisement for a system of economic organisation. That there are ups and downs is regrettable of course but the important thing is that over time we make two steps forward for every one back. As we have indeed been doing and as had just about every place that’s ever adopted this liberal capitalism thing ever since they adopted it.
So far from proving that the experiement or the system has failed I would say that we’ve pretty good evidence that it’s been wildly successful: so much so that we really owe it to the children to carry on with it.
* The difference in the two numbers for 2005 is the different inflation adjustments. Oxford is using 2009 pounds, the second figures are in 2003 pounds.