I have written a lot about the rise and fall of Liz Truss in recent months. I believe my articles up to this point have essentially predicted the ongoing unfurling of events. My task now is to show how this prediction is coming to fruition. Let me begin here, in a post entitled, ‘Why Liz Truss will be a bad prime minister, and that is a good thing’, published in late August. Now, that prediction came true, and we learned why on the way: global capital mobility makes significant sudden deviation from standardised taxation and currency values next to impossible without a great deal of bravery and no shortage of capital controls. Liz Truss wasn’t prepared to do what it takes — and even if she was, the Conservative Party was not. But perhaps she will have the last laugh — by way of her successor. I predicted this, too. Let me explain.
In the article ‘What Liz Truss is really doing,’ I observed that, in the race to replace Boris Johnson as leader of the Conservative Party, Rishi Sunak was clear contender for the crown. Boris Johnson, like his inspiration Winston Churchill, is a wartime leader — and the war against coronavirus is over. Rishi is more of the Blairite mould of Thatcherism with a soft demeanour — but hard skin. To soften Rishi Sunak’s Keynesian radicalism, Liz Truss succeeded in pulling him towards the Hayekian right, with concessions on issues such as Value-Added Tax — anticipating Truss’ own tax-reducing move with Chancellor Kwasi Kwarteng. But Sunak’s U-turn was on raising VAT, unlike Truss’ U-turn on lowering corporation taxes. So Truss was pulled by her party back to the centre from the right, while Sunak was drawn from the left of the party to the centre. Now Truss is out, and Sunak occupies that centre ground in the Conservative Party. Can he hold it?
Time will tell. He has the most nominations from the Parliamentary Party MPs so far, leading contenders Boris Johnson (him again) and Penny Mordaunt. It seems, with Kwarteng out, the possibility of intellectual politicians like Michael Gove ascending the ranks of the Tories is now less likely than it has ever been (Gove being a favourite among politics academics such as David Runciman at Kwarteng’s alma mater, University of Cambridge). It will be an enduring irony of today’s ‘extremist’ age if centrist moderation wins the day — the sleeping sovereign, indeed, which is awakening to save liberal democracy with (wait for it) more liberal democracy.
But democratic capitalism cannot save itself. The irony of Truss’ downfall is that she was destroyed by the creature liberal democracy created: global capital mobility and its disciplining terror on the liberal-democratic nation-state. Economist Dani Rodrik once argued there is an ‘inconsistent triad’ between nationalism, democracy, and global capitalism. You can have two, but not three. So now we have a bit of each, but none of any. We cannot go further into the abyss, as Truss and Kwarteng and the Economist recommended, for reasons given by the abyss itself. Nor can we go back to the post-war social democracy, as populists on the left such as Corbyn and Sanders recommend. We are trapped in a slow, agonising slide towards a slow, agonising death. The liberal-democratic nation-state is dead. Long live capitalism!
Disclaimer: Any similarity between names mentioned and actual individuals is purely accidental and largely theoretical. These are fun ideas to entertain but, as always, I may be mistaken. After all, what do I know?
Edmund Wilson 