London’s high and rising house prices are not an inevitable consequence of economic growth. They are the result of policy choices to restrict land development around London. Decisions made decades ago by politicians trying to get elected or re-elected and being upheld by today’s politicians trying to do the same.
The same is true of other major social issues. Rising prices, in general, are not an inevitable consequence of growth. They are the result of policy choices to ‘stimulate’ the economy by pumping billions of pounds of new money into it.
High unemployment among the youth and permanent unemployment are also not an inevitable consequence of a stagnating economy or high immigration. They are the result of policy choices to have a minimum wage and to keep raising it.
The bailing out of some of the UK’s major banks after the so-called credit crunch was also a result of policy choices. That the world’s banks have more bad debt now than they did leading up to the financial crisis is a further consequence of those choices.
Anyone willing to take the time to learn some sound economic theory – i.e. Austrian economics – can verify these claims for themselves.
Grasping the difference between inevitable consequences and the results of policy choices is like understanding the difference between being wet because someone threw a bucket of water over you and being wet because it rained.
That the average person cannot afford to buy a house or flat in London and can barely afford to rent is the result of policy choices made by politicians. That your money buys you less now than it did just ten years ago is the result of policy choices made by politicians. If you’re young and can’t find work, it’s because of policy choices politicians have made and are making.
That your bank is more likely to collapse now than it was before the financial crisis is because of choices made by politicians. All these predicaments (and others) are not inevitable consequences of growth or capitalism or down to greedy rich people, despite intellectuals in the media claiming otherwise.
The truth is that the major threats to our standard of living and to economic stability and growth today are the result of policy choices of past governments, both liberal and conservative. It is crucial to recognise that these were policy choices that a consensus of politicians and intellectuals believed were wise and would bring about a greater prosperity for all. They were choices supported by a majority of voters.
Given that mainstream intellectuals have the most influence over what the masses believe to be true of the world they live in and that politicians have the most power over their property, this reveals something profound about these two groups.
It tells us that those people considered the smartest in our society and who shape the minds of the people who make policy choices don’t actually understand how increasing prosperity happens, and thus what prevents it from happening.
It also reveals that politicians aren’t capable of raising everyone’s standard of living (as they believe and claim they are) by coercively controlling and redistributing some of our property, and by intervening into our economic exchanges.
It might sound absurd to claim that intellectuals today don’t understand how prosperity happens, but it’s true. For if they did fully comprehend the positive correlation between individual economic liberty and prosperity, then they would never support government policies like quantitative easing, the minimum wage or ones that restrict land development.
When you realise that the mainstream intellectuals in our society are proposing and advocating literally unintelligent economic policies then it becomes clear that, intellectually, our society is in an awful stupor. The painful experience of another, deeper economic depression will be the rousing slap in the face that it sorely needs.