It would be difficult to reverse the reforms of the 1960s, which in nearly all Western countries made divorce easier. But it is reasonable, knowing what we now do about the trend towards early marriage break-up and the effects on children, to reconsider the whole question. Divorce does not just concern two individuals; the stability of other people’s marriages is affected too. That should certainly count against the Law Commission’s proposals to remove considerations of ‘fault’ from divorce altogether. We ought also to consider whether a clear distinction should be made between divorce where there are no children or the children have grown up, and divorce where dependent children are involved. ‘Putting the children first’ and keeping the home together will sometimes require ‘putting off the divorce’.
Strengthening the family means more than fending off the most obvious threats to it. If we are serious about the family as the fundamental unit of society, that has implications for economic policy too. It should, for example, be reflected in the tax system. It used to be axiomatic that tax should take into account family commitments. That principle was displaced when tax allowances were abolished and universal Child Benefit, paid at a flat rate, was substituted. Child Benefit at least pays partial tribute to the principle of taking responsibility. But I believe that child tax allowances should be reintroduced as part of a fair and effective system of child support.
Equally, it is vital that, taken together, other tax changes do not squeeze the traditional family further. And unfortunately this is now occurring. Mortgage tax relief has been substantially reduced. A 3 per cent tax has been placed on insurance, which obviously bears heavily on home owners. The value of the married couple’s tax allowance has been cut by failing to correct it for inflation. To encourage the traditional family means more tax relief and not less.
Modern Western society has proved more successful than any of its predecessors. It has created political and legal institutions which have extended personal freedom, generated economic ideas and structures which promote prosperity, and given birth to a bewildering array of cultural achievements. Indeed, with only limited accommodation to local traditions and conditions it has ceased in any geographically meaningful sense to be ‘Western’ at all, having penetrated almost every country on every continent. But such large and imposing structures require good foundations: and these are always ultimately moral and social, not material. The task which confronts us now — to keep those foundations well shored up against the tremors and pressures which threaten — is as demanding as any we have ever tackled.
CHAPTER XVI
Promoting the Free-Enterprise Revolution
Economic policy
BEHIND ECONOMICS
Economics is too important just to be left to the economists. It is no reflection upon the economist’s expertise or integrity to suggest that his approach will reflect the non-economic values which make him the person he is. John Maynard Keynes famously remarked that: ‘Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.’
But extant economists are no less the slaves of outside influences. That was true of Keynes himself — a member of the ‘Bloomsbury’ set whose rejection of the Victorian virtues in their own behaviour was subtly but surely echoed in the abandonment of the classical liberal rules and restraints in economics with which ‘Keynesianism’ became synonymous.
So too my own views on economics flowed from personal experience of the world in which I grew up. My ‘Bloomsbury’ was Grantham — Methodism, the grocer’s shop, Rotary and all the serious, sober virtues cultivated and esteemed in that environment. Doubtless, there are a hundred ways of coming to convictions about economics, as there are to convictions about politics or religion. But for me, experience of life in the Roberts household was the decisive influence.
For the truth is that families and governments have a great deal more in common than most politicians and economists like to accept. Although the consequences of flouting fundamental rules are somewhat different for states than for households, they are still ruinous — indeed, more ruinous in the case of states because they have the power to bring whole nations down with them.
Nor was it only an understanding of what government could not do that my upbringing and early experience left with me. I also gained a sympathetic insight into what I would later come to think of as ‘capitalism’ or the ‘free-enterprise system’. Whereas for my (usually somewhat older) political contemporaries it was the alleged failure of that system in the Great Depression that convinced them that something better had to be found, for me the reality of business in our shop and in the bustling centre of Grantham demonstrated the opposite. For them capitalism was alien and harsh: for me it was familiar and creative. I was able to see that it was satisfying customers that allowed my father to increase the number of people he employed. I knew that it was international trade which brought tea, coffee, sugar and spices to those who frequented our shop. And, more than that, I experienced that business, as can be seen in any marketplace anywhere, was a lively, human, social and sociable reality: in fact, though serious it was also fun. There is no better course for understanding free-market economics than life in a corner shop. What I learned in Grantham ensured that abstract criticisms I would hear of capitalism came up against the reality of my own experience: I was thus inoculated against the conventional economic wisdom of post-war Britain.
Primarily under the influence of Keynes, but also of socialism, the emphasis during these years was on the ability of government to improve economic conditions by direct and constant intervention. It was held that the state, if its huge powers were directed in an enlightened manner, could break free of the constraints and limits which applied to the lives of individuals, families or businesses. In particular, whereas a household which spent beyond its income was on the road to ruin, this was (according to the new economics) for states the path to prosperity and full employment. Of course, matters were never expressed quite so crudely. Government deficits, for example, were intended to be ‘counter-cyclical’ — that is to compensate for the effects of recession — rather than open-ended. Lip-service was paid to the need to avoid setting welfare benefits at levels which discouraged work. But behind all this was an almost universally held view that government spending was both morally and practically preferable to private spending, because it was directed to higher and more rationally established objectives. Before I ever read a page of Milton Friedman or Alan Walters, I just knew that these assertions could not be true. Thrift was a virtue and profligacy a vice; and the world would not make sense if the laws of human behaviour could be suspended by political fiat. Perhaps the single greatest change which occurred over the years in which I was Leader of the Opposition and then Prime Minister was that the great majority of policy-makers (and even economists) came round to the view which I held.