There are two different ways to run a society, socialism and libertarianism.

With libertarianism people are allowed to keep most of the money that they earn, they can then make their own choices about spending it on the goods and services that they want and need. The government provides services that individuals cannot provide for themselves, like national defence. And there are safety nets for those in society who are genuinely unable to provide for themselves.

It is with libertarianism that the United States of America grew to become the richest and most powerful nation on earth. Something that two successive profligate spending presidents have done their best to destroy.

With socialism people give a lot of what they earn to the state. In the UK this is currently about 50% on average with income tax, national insurance, VAT, excise duty and all the stealth taxes. The state then decides what goods and services to provide to that person. Usually under this system the state spends more than it can tax and has to borrow the difference, racking up huge debts that the citizens are liable for and which need huge interest payments.

It is pretty obvious that libertarianism works a whole lot better than socialism, people are just so much better than the state at spending their own money. And the state is incredibly inefficient at supplying anything, so the less that they supply the better the economy works.

It is mainly socialism that has dragged Great Britain down from being the richest nation on earth and that has destroyed many of our traditional industries.

In the real world libertarianism produces amazing results. In China (supposedly a communist country!) the private sector is 80% of the economy and the state is just 20%. And their commercial success is such that they now produce half of all the world’s manufactured goods. Many developing nations are following this model. But the Chinese copied it from Hong Kong.

In 1961 an Britain, John James Cowperthwaite, became financial secretary of Hong Kong, then a very poor colony with no resources other than its workforce. He invented and implemented “positive non interventionism” a highly libertarian management of the economy. This worked like magic and between 1961 and 1997 Hong Kong’s gross domestic product grew to be 180 times bigger! From being a very poor nation the people of Hong Kong now have a GDP per capita (PPP) of $45,736 whilst in Britain we manage just $35,843. They are richer than us and continue to become even richer whilst we wallow in socialist inefficiency. And their MAXIMUM income tax rate is 15%.

Britain is a socialist country with a socialist government whose idea of reform is to slightly reduce the level at which they borrow and spend. What we really, really need is freedom for individuals to make money and to keep it to spend and invest as they think best. This means getting rid of great swathes of the state, the presumption should be that the state is best owning nothing and doing nothing and thus should only do the minimum necessary for the state to operate. Then we too can have a 15% top rate of income tax.

In China an Britain, Sir John James Cowperthwaite, is a hero for the wealth that his ideas have bought them. They make busts of him to celebrate this. I suggest that George Osborne buys one of these busts, puts it on his desk and uses it for inspiration.