Building Economic Dynamism: Can the West Grow Again?

“Can we collectively, as societies, find it in ourselves to face up to our problems, recognising that moving forward is not only possible, but necessary, if we are to enjoy the rewards of growth? Or do we turn away, indulging in palliatives, telling ourselves that everything is fine, but knowing in our hearts that we are making things worse by postponing tackling our difficulties?”

In this paper, Lord Frost looks at the factors behind slowing growth across almost every Western economy, and asks what it will take to secure economic growth again? The paper outlines the underlying economic, cultural, and political ideas behind the “vicious circle of decline”, and offers a way forward.

Read David Frost's Paper

Summary of Research Paper

Almost every Western economy is facing slowing economic growth or, for some, stagnation. While many cite recent crises such as the COVID-19 pandemic, the Ukraine war, energy disruption, and supply chain difficulties, in reality, the factors behind this economic malaise lie much deeper and have longer-term roots.  

Fundamentally, the “vicious circle of decline” is a consequence of the end of the Cold War, which removed the pressure to remain productive and demonstrate the superiority of free markets and free nations. Complacency in our institutions and among our political and cultural elites set in, and bad policy ideas were not subject to challenge. These moved in a collectivist direction: an expansion of government, centralisation, regulation, and state intervention. The growth of “climatism” and the “woke” doctrine further undermined market competition. On top of this, there has been a loss of confidence in capitalism and democracy, and a failure to invest in growing sectors of the economy. A sense of managed decline and despair has prevailed. 

This paper sets out the choices we must make if we are to restore our belief in market economics and revive the nation state, in pursuit of growth. It argues that we face three fundamental choices: 

1. Accept the status quo and continue on the path of stagnation or decline, or choose to face up to reality and recognise that moving forward is not only possible but necessary if we are to enjoy the rewards of growth; 

1. Discard our heritage and surrender our identity and responsibility to supranational organisations, or recover our national inheritance and revalidate the democratic nation state as the best vehicle for fostering long-term economic growth; 

1. Abandon confidence in free market capitalism, or recover and strengthen a belief in market economics. 

The right answers to these choices, taken together, amount to a prescription for a form of politics and economics which one might term “markets and nationhood”—a determined effort to re-establish meaningful national democracies with a genuine common sense of history, community, and solidarity as the basis for reforms which lead to economic growth. It requires social, cultural, and political change as well as economic reform. And it requires leadership and a vision to provide a living demonstration of what free economies, free politics, and free peoples could accomplish when allowed to do so.