Why did the EU referendum result in 2016 go the way it did? Why was Donald Trump shortly afterwards elected as President of the USA? Why are Eurosceptic political parties gaining traction all over the EU? These events are all clearly linked together. What has made all these developments materialise at broadly the same time? In my view, by far the most significant factor has been economic. It is not just that economies right cross the West have grown much more slowly since the 2008 crash than they did before, at the same time as we have seen the development of the type of populist politics we have experienced recently. It is that the result of our poor economic performance has been no increases in real incomes – and often falls – for vast swathes of the electorate – certainly over 50% in the UK’s case. In London, real incomes have, on average, just about held their own but in Wales they have dropped over the past decade by about 10% and in the North East by only slightly less. The situation in other Western countries, often combined with much higher levels of unemployment than we have seen in the UK, has been as bad if not worse than ours. In the meantime, the wealth of those at the top has dramatically increased, while the incomes of the top 20% or so has held up much better than those further down the income scale.

The poor economic performance across nearly all the Western world is not an accident. It flows directly from the huge change in economic sentiment there was in the 1970s and 1980s, when the Keynesian consensus, which had served the West so well during the period from the end of the Second World War to the 1970s, broke up in the face of mounting inflation. The response, over a relatively short period of time, was a radical switch towards monetarism which in turn morphed into neoliberalism. Fighting inflation became priority number one. Everything else was subordinated to this goal.

Inflation was tamed – though whether this was entirely due to monetarism or other factors is still debated.