There is a consistent refrain that the young are anti-capitalist. We want nothing more than rent controls, limits on profits, and for the scythe of nationalisation to swing over Britain’s economy. In response, we’re often told that we’ve never had it so good. Billions have been brought out of poverty, and incredible innovations have come about due to the economic miracle of capitalism.
This is, of course, right. But it’s also true to say that in Britain in recent years, the benefits of our system have been felt primarily by the old and at the increasing expense of the young. The reality is that the under 40s are not experiencing the benefits of the free market because the market has become increasingly skewed in favour of a privileged group. This is not capitalism, and those who defend the current state of affairs are not capitalists.
Nowhere is this rigged setup more apparent than on the issue of housing. In the 1970s, the average cost of a house was 4.5 times the average annual wage. Now it has risen to 8.5 times wages. Much of this increase in value has come in the 21st century; homeowners have benefited from a massive increase in net wealth by doing nothing except buying a house at the right moment. The timeline, by definition, means that it is primarily the older generations that own the housing stock, while the young are unable to get a look-in.
The problem is one of supply, yet attempts to lower the barriers to housing construction are repeatedly thwarted. In the 1980s, Margaret Thatcher gave millions the opportunity to own their own homes for the first time; in 2021, Conservative MPs thwarted an attempt to liberalise planning laws. Enabling a group of people to monopolise homeownership is not capitalism, and it is not fair.
The tax and benefits system also is designed to help the old while taking ever more away from the stagnant incomes of the working population. Graduates will soon pay the highest marginal rate of tax in decades. Our tuition fee repayment thresholds have been frozen, and National Insurance will rise in April primarily to pay for the social care of the wealthiest generations of brits. Sure, the triple lock has been frozen for this year, but the ridiculous state of affairs where pensions rise faster than wages will return next year. Our whole system is funnelling money away from those trying to get on in life and pushing it toward those doing just fine.
This problem is a political one first and foremost. Labour will not renew British capitalism because they don’t believe in it. The Tories, meanwhile, believe they have no incentive to help the under 40s because they don’t vote for them. This is a dangerous zero-sum game on their part. Voters are rational about their own interests; if the Tories started pushing policies to help the under 40s, more of them would vote Tory.
At present, the party has an impossible coalition to manage, big state red wall voters in the north, and classic small state conservatives in the south. A voting base comprising of economic liberals, young and old united in wanting to get on in life without the state holding them back would surely be easier to manage? As the curtain looks set to fall on Boris Johnson’s premiership, the Conservatives would be wise to bear in mind that their current voters won’t be around forever.
The solution to the problems that the young face is to be found in economic liberalism. Deregulation of the barriers to housing, making the tax burden fairer, and ensuring Britain’s economy is more attractive to investment to increase productivity would fix our predicament. Instead, we witness the catastrophe of those claiming to represent capitalism manipulating the laws of economics beyond recognition.
Unless we do something to restore faith in the idea of the free market, we will doom ourselves to witness generations of economic decline as bitter voters reach for increasingly interventionist policies to help their plight. The war on the young is a war on the very future of capitalism and liberty.
