UKIP Could Save Britain – But First It Needs a Coherent Economic Policy

Why does the monumentally tedious soap-dodging pseud Russell Brand still sell so many books?

Why is Ed Miliband, a man with the charisma of used dental floss and the intellectual nuance of Hugo Chavez, still seriously in the running to become Britain’s next Prime Minister?

And why is Patrick O’Flynn, the economics spokesman for Britain’s most libertarian mainstream party UKIP, flirting with the kind of wealth taxes and turnover taxes you’d more usually associate with the Greens or the Socialist Workers’ Party?

The basic answer to these questions is one and the same: because there are many, many voters out there who sense there’s something not quite right about this “recovery” we’re experiencing; that while the rich seem to be getting richer and richer, the rest of us are finding it harder to make ends meet than ever we can remember.

So when Brand, Miliband and Patrick O’Flynn publicly advocate greater government intervention to make things fairer they are pushing at an open door. What half way decent person wouldn’t want everyone to be paid a “living wage”, or for Google to pay its fair share of taxes or for the superrich to have to pay a bit more of the money (which they can well afford) for their diamond-and-foie-gras encrusted Manolo Blahniks and their pashmina-trimmed Murcielagos?

Well I wouldn’t, for one, and it’s not because I don’t care and it’s not because I don’t think there’s something seriously wrong with the state of Britain’s economy. It’s simply because I recognise that the statist measures which Brand, Miliband and O’Flynn are advocating are a major part of the problem they are presuming to resolve.

Put very simply, the crisis all the world’s Western economies are facing right now is a reflection of the relentless expansion of government. Free market capitalism (insofar as it ever existed) has been replaced by crony capitalism in which an unholy alliance of financiers, lawyers, corporatists, politicians, left-leaning charities and bureaucrats have been allowed to bleed the dwindling sector of the economy that still produces real, useful stuff almost dry.

This crisis has been accelerated since the 2008 crash by the policy of government money printing – aka quantitative easing (QE) – which has artificially inflated the price of assets (such as houses) putting them further and further out of reach of struggling wage earners.

To put it into perspective, here’s a paragraph from Dominic Frisby’s excellent book Bitcoin – The Future Of Money (Unbound).

In the US wages have gone from around $6,000 per annum in 1971 to $44,000 today. So while the money supply in the US has increased by 2,000 per cent, wages have increased by 750 per cent. The inequality in the UK is greater. Money supply has increased by 6,700 per cent, wages by just 1,250 per cent. Wages, in short, have failed to keep up with inflation.

So all those people out there who think Russell Brand has put his finger on something, that Ed Miliband has a point, and that Patrick O’Flynn is talking sense when he says the corporations are getting away with murder are absolutely correct in their instincts. Where they couldn’t be more wrong, though, is in imagining that the solution lies in giving more power to the alliance of statist forces which created the problem in the first place.

There is a faction in UKIP – the classical liberal/libertarian faction – which totally gets this. Hence today’s Breitbart story about the letter circulating within the party demanding that O’Flynn be replaced as UKIP’s economics spokesman.

You could argue, as I’m sure O’Flynn and his supporters would, that this represents the kind of pie-in-the-sky idealism and ideological purism that stands in the way of UKIP’s ever becoming a serious political force. After all – so the theory goes – if UKIP is to win as many seats in the Labour-voting North as in the Tory-voting South, then it needs to adjust its message to embrace the kind of mildly socialistic policies that ordinary working class folk like and understand. If this argument prevails, then so-called “Red UKIP” is here to stay – and O’Flynn may indeed become UKIP’s next leader after Farage.

But I hope that this argument doesn’t prevail. It reminds me far too much of what Cameron loyalists used to say in the run up to the last general election. “Of course we’re sounding more big government than you might prefer, but the important thing is for us to get elected first. Then we’ll do all those red-meat things you’d like us to do, like reining in government spending.” (Oh yeah?)

It also strikes me as both dishonest and patronising. I agree that “government isn’t the solution to the problem. Government is the problem” is a slightly harder argument to make to working class voters than “all your benefits are safe with us” and “let’s bash the rich”. But as both Ronald Reagan and Margaret Thatcher demonstrated, it’s not impossible if you have the courage of your convictions.

No doubt O’Flynn and his Red UKIP faction will feel vindicated by polling in the Times today which suggests that UKIP voters as a breed are much more left-leaning and populist in their instincts than Conservative voters. For example, 81 per cent of those UKIPers polled agreed with the statement “Big business takes advantage of ordinary people” (as against 83 per cent Labour and 60 per cent Conservative); while the figures for “There is one rule for the rich, and one for the poor” were 84 per cent; 80 per cent and 45 per cent, respectively.

But actually all this does is confirm what I argued at the beginning: that many UKIP voters, rightly, sense there is something seriously wrong with the political and economic status quo. What it doesn’t demonstrate is that the only way to satisfy their concerns is to recast the party as some kind of Labour Lite.

UKIP, as we know, is on a roll right now. By the end of this week – after the Rochester and Strood by-election – it will almost certainly have its second Member of Parliament in Westminster. The question it needs to ask itself now is: does UKIP intend to follow the example of David Cameron and decide that the pursuit of power is more important than ideological principle – or does it mean to make a real difference?

If, as I hope, the answer is the latter than UKIP will have to acquire an economic policy more cogent and radically different from those of LibLabCon Westminster bubble than the one being touted by Patrick O’Flynn. (Yes, O’Flynn read economics at Cambridge – but so too did John Maynard Keynes and look where that landed us).

The solution is staring the party in the face. No one understands the economic problems facing Britain better than Douglas Carswell. By happy coincidence, he happens to be UKIP’s first elected MP.