Samuel Gregg

“I-Pencil,” the fable-like essay by the economist Leonard E. Reed, remains one of the best introductions to the free market. It shows the ways in which the mass production of even simple things – like the humble pencil – involves the work of numerous people, most of whom do not know each other and who are all motivated at some level by self-interest. Above all, Reed shows that this extremely complicated process occurs without someone planning it from the top-down. This is, in short, the classic argument for market liberalism. But Reed’s essay also illustrates the follies of central planning or imagining that humans can somehow live an entirely self-sufficient existence.

If there is anything that all governments watch carefully, it is GDP growth. Without substantive and ongoing increases in what GDP measures — the total monetary value of all final goods and services produced in the economy over a specific time period — societies are in big trouble. That’s one reason why recessions usually result in electoral death for whoever holds office at the time. To accurately estimate total growth in an economy, everything that contributes to GDP must be measured. That presently includes consumer spending, private domestic investment, net exports, and, lastly, government consumption and spending. Now, however, Trump officials ranging from Elon Musk to Howard Lutnick are stating that we should consider excluding the latter category.

Election aftermaths are always an opportunity for taking stock. Since the 2022 midterms, we’ve heard prominent Republicans stressing the need to revisit questions ranging from electoral strategy to how to engage the culture wars. What desperately needs discussion on the American right, however, is conservatism’s approach to economic policy. Since 2015, American conservatives have been deeply divided over economics. Conservative skepticism about markets predates Donald Trump, but there’s little question that Trump shattered the favorable views of free markets that had prevailed since Ronald Reagan’s presidency.

If there is anything that the swift overturning of Prime Minister Liz Truss’s purported free market revolution has taught us, it is the utter lack of enthusiasm for economic liberalisation à la Reagan and Thatcher across the West right now. Yes, the lousy roll-out of the mini-budget by Truss’s now ex-Chancellor Kwasi Kwarteng played a role in the prime minister’s rapid and multiple U-turns. But bad-PR is only part of the story. Many Tory MPs are plainly comfortable with the economic arrangements prevailing in Britain that successive Conservative governments have not challenged since the Tories returned to power in 2010.

In December 2016 I was speaking at a conference in London. Much of the discussion, unsurprisingly, gravitated toward Donald Trump’s recent election as president. It meant, I noted, that an outspoken free-trade skeptic would be in the White House. At that point a bright young French economist turned to me and said, ‘Mon ami, I thought that free trade was a done deal on the right. Apparently, it isn’t.’ As it turns out, it wasn’t just free trade that much of the American right was on the brink of rejecting. A systematic questioning of the central place assumed by free markets in conservative thought and policies since the 1970s, in the United States and the broader Anglosphere, was well underway.