The economy must work for the many not for the few The underlying forces fuelling the politics of envy need to be tackled by the Coalition - and especially by Conservative ministers - if they are to stand a chance of winning the broader, long-term argument on economic policy. Simply trying to convince the electorate that a return to class war, vindictive taxation or even outright nationalisation would impoverish us all, destroy jobs, chase away foreign investment and damage our global competitiveness won't work. Voters see billionaires getting richer while they struggle and wrongly believe that the world has to be a zero-sum game. The priority must be to focus on mending the broken ladder of opportunity. Social mobility is the best defence against jealousy. If people believe that with effort, hard work and patience they too can once again start to better their lives, they will be far less likely to support anti-capitalist policies. But if they lose hope and begin to assume that the system has become rigged against them, captured by the wealthy and powerful, then they will listen to the Left's siren voices. In the 2000s, the solution from governments around the world was to extend cheap credit to those who were struggling, temporarily propping up their quality of life, a strategy which ended in tears, as recounted brilliantly in Raghuram Rajan's Fault Lines: How Hidden Fractures Still Threaten the World Economy. There was also greater emphasis on in-work benefits. This time around, another credit binge to buy off the discontented needs to be avoided at all costs. Instead, Britain needs policies to ensure that there is once again a realistic possibility of regular folks" dreams coming true without them having to take on a gargantuan overdraft. That is not so today: tragically, it is implausible for a private sector worker even on an above-average £35,000 a year to hope that they will ever be able to own their own home in London, for example, or to retire, even when they turn 75. Unless you work in the public sector, pension provision is hopelessly inadequate for all but a tiny elite. The greatest of all threats to the legitimacy of capitalism is that Western economies" labour markets have changed irreversibly. Salaries are under pressure because of a combination of trade and technology, which are delivering vast returns to some and increasingly small pay-offs to others. Real wages are down by 2.1pc on average over the past year alone, when adjusted for the latest retail prices index inflation. The gulf between the haves and have-nots is starting to look dangerously unbridgeable, and this time the latter don't just include the bottom 10pc but extend to vast swathes of the workforce. It is therefore essential to make sure that decent jobs, respectable homes and the possibility of retiring one day are seen once again to be in reach of the striving classes, the sorts of people who in the 1980s would have voted for Margaret Thatcher but today are squeezed and disenchanted. That, of course, is easier said than done. For a start, it requires a great private housebuilding programme that, over time, would make homes affordable for the vast majority of families. As Nick Crafts of Warwick University has pointed out, private sector housebuilding peaked at close to 300,000 houses a year in the 1930s, almost three times more than today. Rather than tiny flats, most newbuilds were houses. In London, the average price of a new terraced home was £395, just 2.4 times average earnings of £165 per year; property was astonishingly cheap by contemporary standards, helping a new generation to become homeowners for the first time. At present, there is a huge difference between the prospects of an older generation that still benefits from private final salary schemes and today's 20 and 30-somethings, who will have to work until they drop, fuelling intergenerational warfare. We therefore need a major push towards an Australia- or Singapore-style universal funded pension scheme, building on the new Nest programme. To accelerate the process, national insurance should be cut as soon as possible and the money channelled into private, named retirement pots as an additional, compulsory contribution. More broadly, more people must own a direct stake in UK Plc. While the returns to many sorts of labour are going down, those to capital have often gone up. Spreading share ownership is the best way to tackle this. The part-privatisation of Lloyds this week and the forthcoming Royal Mail sell-off are thus missed opportunities. In the latter case, the staff are being given a stake, but it would have been preferable to distribute shares to the general public. Last but not least, the UK needs more and better jobs of the sort that will continue to pay well in a world of robotics, 3D printing, artificial intelligence and extreme digitisation and globalisation. The answer is not for the Government to pick winners, or for it to direct resources. Instead, it needs to continue to reform education, allow and incentivise the private sector to build a new physical and digital infrastructure, and unleash a supply-side revolution to position the UK as a pro-market, entrepreneurial hub. Growth alone won't be enough to defeat the class warriors. For that the economy needs to be reformed to make sure that it starts to deliver for the many, not just the few. Let us hope that the Coalition is up to the task.