What Liz Truss is really doing

Rishi Sunak is plainly the obvious choice for successor to Boris Johnson as leader of the Conservative Party and, by implication, the United Kingdom — sometimes described, not entirely inaccurately (albeit forgivably imprecisely), as a one-party democracy. But he has a surprise contender — Liz Truss, favourite among Party members but not the best sell for the general public, which is suspicious of outed Thatcherites. The ‘Iron Lady’ of old is replaced by a legion of younglings, who eye the crown with jealous eyes. But the public much prefers a more moderate touch. Centrism is the default choice for a declining civilisation, even if this centrist style and radical substance accelerate the decline.

A debate about the future of the country, between the antagonists of our story.

Liz Truss probably cannot defeat Keir Starmer at a general election. Both Truss and Starmer have fundamentally liberal sensibilities, but Truss has long since abandoned all pretence to liberal democracy in favour of neoliberal dictatorship, calling for deregulation, tax cuts, and an altogether marketised model of economic growth — as if marketisation has done anything but slowed down growth since the 1970s, when unleashed capital mobility (after Nixon took the dollar off gold in 1971) disciplined states into obeying the repressive power of global corporations, or else.

During economic crises, the state always saves the day, or else. Look to the bailing out of the banks in 2008-9, or the massive stimulus and quantitative easing packages of 2020-1. After the crisis is over, the seeds of the next crisis are sown by the state taking a back seat in order to allow market competition to reign in the inflationary effects of monetary stimulus, through channelling money back into savings rather than inflationary spending, creating ‘savings gluts’ that contribute to the next asset-bubble crisis. At least, that’s one theory.

Liz Truss probably can’t win, but can extract policy concessions from Sunak that ensure his state-led investment policies as Chancellor of the Exchequer are replaced with the austerity that ruled the 2010s and was anticipated in the 2020s by Sunak’s own freezing of non-emergency departmental spending in 2021. In extracting a U-turn from Sunak on Value-Added Tax, further tax hikes will also be prevented in favour of a policy of tax reduction and market deregulation. The power of the state will take a back seat to allow for the profit of the market by private interests. The scrapping of VAT on energy bills is a further symbol of western democracies’ populism and apocalyptic policies on energy, at the end of a devastating heatwave.

Capitalism will accelerate climate change, and will in the meantime lead to further economic, social, and geopolitical crises, such as accelerating the rise of China which rides the neoliberal wave to devastating effect. The most Sunak can say against China is that its ‘Confucius Institutes’ will be closed. Trade will continue, and the domestic and international system will collapse under the weight of this market anarchy. This is what is happening. What have we done?

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