Does Supply-Side Economics Still Work?

WSJ Opinion: Free Expression

Gerard Baker, Editor at Large, The Wall Street Journal

Society & Culture, News

4.6 • 591 Ratings

🗓️ 19 November 2025

⏱️ 35 minutes

🔗️ Recording | iTunes | RSS

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Summary

Once a defining principle of conservative governing economic policy, supply-side economics has taken some political hits in the last decade. The progressive left has always critiqued laissez- faire economics, blaming the pursuit of smaller government, tax cuts, deregulation and open trade for increasing inequality. But now large parts of the right seem to dislike supply-siders too. Populists oppose free trade and favor more government intervention in the economy, and while Donald Trump has achieved big tax cuts in both his terms in office, his signature economic measure is tariffs and he seems eager to expand government's role in the economy, from telling companies what they should be doing with prices to taking stakes in big American firms and directing foreign investment into favored industrial activities. Have the supply-siders lost? On this episode of Free Expression, Gerry Baker speaks with Matthew Elliott, member of Britain's House of Lords, and co-author with Arthur Laffer one of the godfathers of supply side economics and Michael Hintze, a London-based hedge fund founder, of a new book “Prosperity Through Growth.” They discuss the case for reviving conservative economic ideas, especially in the U.K., the risks of Trump's tariffs and trade policies, and whether Brexit, which fired the starting gun for populist economics, was a failure. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	From the opinion pages of the Wall Street Journal, this is Free Expression with Jerry Baker.
0:08.8	Hello and welcome to Free Expression from the Opinion page of the Wall Street Journal. I'm Jerry Baker, editor at large of the journal. Thanks for joining us. And if you're not already subscribing to Free Expression, please make sure you do at Apple Podcasts or Spotify, wherever you do you you're listening. This week, we're going to talk about the economy, in particular we're going to
0:23.1	talk about supply-side economics. Take it a bit of a hit politically, should we say, in the last
0:29.0	few years. Supply-side economics was the, if you like, the kind of defining feature of conservative,
0:36.2	right-leaning economic policy over the last 40 or so years,
0:41.0	led by, particularly first of all, by Margaret Thatcher, in a policy terms by Margaret Thatcher in Britain,
0:46.2	who came to power in 1979, a principle of cutting taxes, encouraging growth through letting people keep more of their money,
0:54.0	cutting government spending, cutting government
0:54.6	spending, cutting regulation, promoting free trade, promoting free markets. It came as a bit
1:00.0	of a shock to the economic system of Europe, and particularly the UK in the 1970s, but it certainly
1:04.9	seemed to work. The UK economy's performance improved dramatically in the 80s and in the 90s.
1:09.3	And of course, here in the United States, Ronald Reagan elected in 1980, similar approach based on the similar principles, cutting
1:15.9	spending, cutting taxes, promoting free markets at home and abroad, and unleashing the animal
1:21.6	spirits of capitalism and achieving growth and prosperity that way. And again, that's been for
1:26.5	three or four decades the defining
1:28.8	feature of conservatives around the world, not just in the UK and the US, but in other countries,
1:34.8	which have campaigned on a conservative platform, have of course been pushing the case for
1:39.2	supply side economics and all of the benefits that it appears to have achieved. But of course,
1:44.0	in the last decade,
1:45.2	it's fair to say supply-side economics has come under serious challenge. It's always been
1:49.5	rejected by the left, if you like, by progressives who always said, no, no, no, we needed
1:53.9	more regulation to rein in some of the more aggressive predatory behavior of capitalism.
	...

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