Leading Article: We have never had it so good, thanks to the new British economic miracle
Saturday 18 December 1999
It is, in truth, a touch hubristic and it invites mild ridicule, sounding a little like a promise to abolish the trade cycle, something that human wit, Marx and Keynes failed to deliver. Perhaps Mr Brown should know better, having had, in opposition, so much fun at the expense of the chancellor at the time, Nigel Lawson, who made a similar boast in 1988 - that the United Kingdom had experienced an "economic miracle", a feat that was supposed to be compared with the original German Wirtschaftswunder of the 1950s. Well, we know what happened to Mr Lawson. The question is whether Mr Brown's slogan will join Mr Lawson's miracle, Harold Wilson's "white heat of technology" and Harold Macmillan's "never had it so good" as a boast too far.
This is a good time to wonder. Transatlantic stock markets are irrationally exuberant and in the upswing of the longest bull market this century. Internet shares are running at levels that the sober-minded tell us are unprecedented and unsustainable. The housing market is still booming and is predicted to spread beyond its "hot spots". In some parts of the country and in some sectors labour shortages are already developing (try hiring a builder or a software engineer). Are we at the end of an impressive economic run or merely at, say, the mid-stage of a truly historic and long upswing?
We may well see a correction in the stock market, although, of course, no one is predicting when. There are reasons to believe that such a correction could be "managed", as were the previous crash in biotechnology stocks and successive crises in the markets and currencies of Mexico, the "tiger economies" of east Asia and Russia. We are, in other words, still standing after all that. Inflation is, as Baroness Thatcher always tried to remind us, nothing to be complacent about. But, as the slew of economic statistics published last week indicated, there is every reason to think that it remains under control, even as unemployment heads down towards less than one million.
What lies behind this remarkable economic turn-around? In the first place, growth is underpinned by freer and freer movement of capital - or globalisation - just as the long postwar boom was fuelled by the dismantling of the pre-war and wartime apparatus of tariff barriers and other obstacles to free trade. It can be bad news for us as workers if we are undercut by competition from abroad, but it is good news for us as shoppers. Add to this a more discriminating approach in markets from new cars to designer slacks to ready-made pizzas, and we have the most powerful combination of downward forces on prices since the 1930s.
Second, the new technologies. It is perhaps comforting to reflect that another long turn-of-the-century boom, that from 1896 to 1913, was also accompanied by breathtaking innovations: the telephone, the assembly line, the internal combustion engine. Today, we are still comprehending the enormous potential of the Internet, mobile telephony (and the convergence of these) and the productivity gains that will follow.
No more boom and bust? Maybe not. But the evidence is all around us that we are indeed enjoying a white-hot technological revolution amounting to something approaching an economic miracle. We can at least be sure that we - most of us - have never had it so good. Enjoy!
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