Image - Alicja Ziaj
To some, this phrase is nothing more than a political buzzword. They’ve heard it seemingly countless times in speeches and manifestos - and yet the day-to-day relevance of the concept does not register.
This is not a failure on the part of the disillusioned, but a consequence of the term’s overuse; degrading what should be recognised as the primary objective of any government to mere political jargon.
The challenge that any future government must overcome - in the United Kingdom and Europe more broadly - is how to communicate two vital points.
First, the necessity of economic growth. It must be translated in a way that people can relate in their daily lives. If the abstract cannot be linked to the tangible, then communicating the second point will be near impossible. That second point is this: tough choices will have to be made to achieve growth.
So what is economic growth and why does it matter?
Without straying too far into the technicalities, economic growth typically refers to the increase in the Gross Domestic Product (GDP) of a country over time. GDP is simply the total value of all the goods made and services provided within the borders of a country over a certain period.
This is just one way of measuring the economy and like anything it is imperfect. However, what cannot be denied is the strength of correlation between GDP as a metric and living standards.
Take, for instance, China. When Deng Xiaoping instituted his liberalising economic reforms from the late 1970s through to the 1990s, the Chinese economy experienced an explosion in GDP. Throughout this period, the economy consistently grew an average of 10% a year, over ten times the 0.8% growth that the ONS forecasts the UK will experience this year. By 2000, the Chinese economy had more than quadrupled its 1978 level.
The result of all these abstract numbers? Nearly a billion humans lifted out of desperate poverty, many out of starvation.
China may be the most clear-cut example, but is by no means the only one. From South Korea to Singapore to Ireland, history is littered with instances of growth in GDP coinciding with an overall elevation in the quality of people’s lives. Whether or not GDP is a flawless measure, it clearly tracks something very real.
Overall, the picture is this: a strong economy means a better everyday existence. It means being able to buy that extra pint at the pub, not needing to count every penny at the supermarket, and having the spare cash to go on holiday. It means jobs, opportunities, and a clear path to getting on the housing ladder. It means being able to take risks; to start that business, to pursue that new career. These things are not idealistic - they are attainable with the right economic policy.
So what is the right economic policy? There again, the lesson of history is clear. Economies that embrace markets, innovation and dynamism produce a higher standard of living than those that don’t. Always. Not just for the most prosperous, but for all. A thriving economy truly is, as John F. Kennedy once stated, a tide that lifts all boats.
The problem is that the economic consensus in Britain, and Europe more widely, has stifled rather than enabled the conditions for such an economy. These Isles today face crippling levels of taxation, massive overregulation, and a lingering suspicion of free enterprise. The result? An economy predicted to not even grow by 1% this year. Some may look around and claim that everything is okay - the water may be warm but there’s no need to hop out. They’ll point to the UK remaining the sixth largest economy in the world and note that many others have it far worse off.
Whilst this is true, these people fail to see the bigger picture. As the economies of the US and China continue to roar on, notwithstanding their respective challenges, the threat of low growth is not simply domestic living standards, but geopolitical.
No nation - nor continent - is owed anything. They are not owed prestige, prosperity or power. If Europe continues to actively hamstring our economies - the most notable example being in the AI sector - the consequent diminishment of our economic power risks a loss of agency, sovereignty and self-determination which will be unrecoverable.
Imagine if 18th-century Britain, in the name of ‘regulation,’ had actively delayed, meddled and generally disrupted industrialisation, all the while France went full speed ahead. How would that have ended? This is exactly the policy European nations are enacting in regard to AI, a technology considered by many - including myself - to be ultimately more consequential than the Industrial Revolution.
The road we are on today will leave us holding the stick whilst our adversaries hold the cannon. Failure to recognise this is existential.
So, the solution. Many will be reading this article and saying: ‘This is all well and good, but the idea that we need to grow the economy is hardly revolutionary. How can it actually be done?’ This is where the second challenge comes in - winning the argument on making the necessary tough choices.
The truth is, we’ve always known how to grow the economy. The answer is low taxes, decreased regulation, and attracting the best talent and investment from around the world. The problem is, each of these measures entail massive political pitfalls. Low taxes? You need spending cuts. Big ones. Decreased regulation? The tech doomers will come out in full force. Attracting high skilled immigration? Here comes you-know-who.
Each reform is perilous - each is absolutely necessary.
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