But Mr. Hutton, this is a good thing

If you get the past wrong then clearly you’ll get the lessons of the past - those that can inform us about what to do in the future - wrong too. Which brings us to Willy Hutton:

The first catastrophe was the monetarist experiment of the 1980s – a means to roll back the state so it would print less money – which achieved neither a smaller state nor lower inflation. Other countries may have fallen for the same snake oil, but none so emphatically as Britain. Our industrial base was needlessly decimated, with manufacturing employment close to halving in a decade.

We would not suggest that the government - any government - got economic policy perfectly right. We are, after all, the very people who insist that government isn’t going to get the details of economic policy right therefore there should be less attempt to manage the economy in detail. But we need to think of this too:

It’s true that manufacturing employment dropped precipitately. Manufacturing output (as above and yes, of course that is already inflation adjusted) dropped, as it does in a recession, then recovered and continued to climb. Output, at the end of Thatcherism, was perhaps 15% higher than at the beginning but with half the jobs.

That’s also known as a more than doubling of labour productivity. Increases in labour productivity being one of those Good Things.

One of the things that economic policy got right in the 1980s - increasing manufacturing productivity - is being used by Will Hutton as proof of what economic policy got wrong in the 1980s. Which might be why his insistences on what we do now seem so out of kilter with reality. He’s not just failed to learn the lessons of the past he’s actually got the past wrong.

Tim Worstall