The new Prime Minister of the United Kingdom, liz truss, has an ambitious plan to revive his country’s failing economy. It is the only plan that any British politician or economist has been able to offer that has any chance of success. It also very likely won’t work, unfortunately, and mostly through no fault of Mrs. Truss. Here follows a morality tale about modern economies and the modern political right.
The UK has for years suffered from a productivity crisis, often delicately referred to as a ‘puzzle’. To the extent that the British economy grew over the last decade, it did so mainly because a larger proportion of the population was working, not because people were working more productively. This is an investment problem created by big government and the taxes and regulations that come with it.