It’s hard not to cast a wry smile over the sorry fate of the UK’s latest offering from the Conservatives, Liz Truss. Singularly incapable of fulfilling the duties of her office — wooden, lacking in charisma, and with no hold over the detail of governance or the economy — Truss has become the shortest-serving prime minister in British history. She’s a national and international laughing stock, and her fate couldn’t be more deserved.
In September, Truss and her erstwhile chancellor, Kwasi Kwarteng, announced plans to embark on an insane voyage of completely unfunded borrowing — using the British state as a piggy bank to funnel billions of pounds of public money into the hands of the wealthy cartels that now control the country’s privatized infrastructure: utilities and energy, private health, education, and transport.
It was an evolution of neoliberal “trickle-down” economics that has long been little more than widespread, state-sanctioned corruption — a particularly British model that has been honed over decades of outsourcing and privatization. Insofar as there was any economic rationale behind the scheme whatsoever, it extended no further than a blind belief that in piling yet more money into the hands of Britain’s crooked contractors, bankers, and billionaires they could somehow be induced to reinvest that money into job creation and research, as opposed to their consistent preference for hoarding it like dragons in offshore tax havens.
To compliment these policies, Truss had also promised tyrannical crackdowns on Britain’s already legally bound trade unions and the effective illegalization of strike action on the railways and other economically important sectors.
The response was rapid. Commitment to use borrowing to prop up the gigantic gap left in the revenue budget from £43 billion worth of tax cuts and bonanza giveaways for the elite saw a collapse in confidence in the pound. Gigantic market intervention by the Bank of England was initiated to prevent runaway inflation, including what will undoubtedly prove to be catastrophic interest rate rises that will severely impact anyone currently carrying debt — i.e., most of the working-age population.
It was these arrayed anonymous “interests” of the financial markets that ultimately condemned Truss. She is now gone, swiftly contained by a characteristically ruthless Tory coup against Kwarteng. With her, one hopes, will also die her authoritarian agenda to suppress wage claims by crushing trade unions. But it would be a mistake to be too smug about her downfall.
Jeremy Hunt, her recently appointed chancellor, promised be a loyal if not fervent servant to the financial markets who decided her fate. Hunt will be well known to many as the Conservative health secretary from 2012 to 2018. He presided over possibly the most disastrous period of National Health Service (NHS) mismanagement in its history, overseeing a 57 percent rise in money spent on private services and a litany of failed crank-privatization attempts on different aspects of the service.
Hunt had already promised “eye-wateringly difficult” decisions to be made on public finances. A £43 billion budget deficit — which Kwarteng planned to partly mitigate with £18 billion in public sector spending cuts — has now ballooned to a £70 billion deficit with nearly £40 billion of public spending cuts anticipated as the only way to “convince the markets” the government can balance the books. Likely targets appear to be benefit payments, investment spending on infrastructure, and councils, schools, emergency services, and health. Austerity is back with a vengeance — and fully supported by the same paymasters who ousted Truss.
This coup has not been democratic (which is not to say that the appointment of Truss to the position of prime minister through an internal Conservative Party election had any shred of democratic legitimacy). The turbo-austerity which is likely to proceed from here will likely match if not exceed the depths of Truss’s ambitions for a bargain-basement British economy with hollowed-out public services.
The financial markets who “lost confidence” in Truss and Kwarteng have as little interest in the positive life outcomes of our country’s population as any neoliberal demagogue. Both Truss and Kwarteng, as practitioners of the neoliberal doctrine, had honed their rhetoric in adulation of the same international moneyed interests who have dashed their plans against the wall. Neoliberalism in the United Kingdom has long been the ideological framework through which the British economy has been transformed in favor of the interests of the City — though the City has long since lost any real intellectual commitment to its completely unevidenced precepts and theses.
In cutting Truss and Kwarteng down, the thin veil of neoliberal economic theory that concealed the entrenched financial interests at the heart of Britain’s political system — and the political parties, schools, and ideologues who pursued it — have been cast aside. Now, international financial capital rules naked, unabashed, and unchallenged in the face of a quisling Labour leadership.
Britain’s finances are to be run by bean-counting accountants obsessed with book-balancing. They likely will see little difference between borrowing to invest in infrastructure, state assets, and services, and Truss’s plans to borrow to shove into the pockets of private interests. Jeremy Corbyn and John McDonnell were themselves preparing for a run on the pound and spooked currency markets should they have been elected in 2017. The change our country genuinely needs — visionary and transformative leadership, requiring huge investment and state spending — will be opposed as vigorously by our new market leaders as it ever would have been under Truss and Kwarteng.
No tears need to be shed over Truss’s fate. But there are lessons in her downfall — about the British state, what moves it, and what it would actually take to change it — that it would be our own mistake to ignore.