I'm thinking of two things. One is that, as Ben Friedman has shown, a healthy economy and a good society usually go together - because prosperity makes us more tolerant. It's no accident that the squeeze on real incomes since the financial crisis has increased anti-immigration feelings. Maybe prosperity does give us greedy bankers, but poverty gives us Boko Haram - and bankers are angels compared to them.
However, it might also be the case that policies aimed at fostering community, well-being and equality might also promote growth. Ryan says:
The desire for enrichment is a natural human ambition, and the best way to achieve it in future is to embrace precisely the values and economic liberty which enable robust economic growth.
History, however, suggests this is questionable.Between 1830 and 1914 - the era of small government - UK real GDP grew by 2% per year. But in the social democratic era of 1946-79, it grew 2.5% per year. Some economic liberty is necessary for growth - but the historic record suggests it might not be sufficient.
What Ryan is missing here is the idea of obliquity. As John Kay has said, pursuing goals directly might be self-defeating. Recent governments have tried to raise growth and this had led them to dole out favours to every special interest group that claimed to be able to create jobs. The upshot is sclerotic cronyism, not a healthy dynamic economy.
Instead, it might be that a government which aimed at John Sentamu's goals of equality and community might - as a happy by-product - also raise growth. I'm thinking of several mechanisms here:
- More equality might raise productivity in several ways.
- One of the best things governments could do to promote happiness would be to minimize unemployment, for example by having a serious jobs guarantee. This, though, could also promote long-run growth by reducing the tendency for the unemployed to suffer a loss of skills, demoralization and employability.
What I'm trying to do here is bang heads together. If growth and a compassionate society go together, Mr Sentamu and Mr Bourne might have common ground. My suggestion for Mr Bourne is that he consider that there are some policies on top of economic liberty that might promote both community and growth. To Mr Sentamu, I'm saying: you don't need to argue against "rampant consumerism" to want more egalitarian and communitarian policies.
Precisely which policies would promote both growth and better societies is a big and open question. If we had some serious politicians, it would be at the top of their agenda.