Ian Dunt

Why did the Conservative Party walk away from that?

Well, I think, I mean, there have been periods... I agree with that approach, and it's the basic Keynesian approach.

There are periods where it stopped working.

So, for instance, in the late 70s.

And that allowed the sort of thought... Basically, the people around Hayek and von Mises, the old sort of laissez-faire neoliberal economics that have been building since the end of the Second World War, that allowed them to put forward their proposals for Thatcherism that made Thatcher triumphant, and that...

for conservatives like David Cameron and George Osborne, was the conservatism that they were raised on.

It was conservatism triumphant, not just at the polls, over and over again.

It was conservatism that won the Falklands War.

It was conservatism that faced down, you know, the NHS and the BBC and the miners and the trade unions.

And that sense of thumping, triumphant conservatism, they were born in, and they never really lost it.

They were prepared to say things like, yeah, we'll match Labour spending.

Just in the same way that Labour was prepared to say all the Thatcherite things they needed to say to get into power.

But they didn't really believe it.

So as soon as there was an opportunity, they reverted back to the old Thatcherite metaphor, which is deeply compelling to many people, which is that a nation's finances are the same as household finances.

So if you're going through a rough old time, you need to sit down at the kitchen table and say, you know what, we've got to cut our spending.

in order to make ends meet, and that's how you keep the roof up.

Mostly because in a household, you can't borrow your way towards stimulating demand.

That's just not a thing that means anything.

The metaphor breaks down completely.

But in a nation, you can borrow to stimulate demand.