With the recent announcement of Liz Truss as the new British Prime Minister, many are still wondering what inspires her politics? The answer, argues Dr. Simon Lee, lies in a new kind of ideology – “Do-It-For-Myself Economics”, a politically expedient, headline-making sounding confection of phrases designed to appeal to the prejudices of members of the Conservative Party and move it forward. own personal professional ambitions.
In his 1985 BBC Reith Lectures, economist David Henderson developed the thesis of “Do-It-Yourself Economics”. This thesis argued that, in broad areas of policy, including economic policy, the judgment of politicians and their officials was guided to a large extent by “the economy of all”, that is, “the ideas intuitive systems of laymen, rather than the more elaborate systems of thought that occupy the minds of trained economists”.
What the Conservative Party leadership campaign has revealed about Liz Truss is that her thinking about economic policy has been shaped, not so much by the “Do-It-Yourself Economics” of Henderson, but rather by his own ‘Do-It-For -Myself Economics’: a confection of British nationalism, politically timely and catchy sound bites designed to appeal to the particular prejudices of Conservative Party members and so advance his own ambitions personal career paths to succeed Boris Johnson as Prime Minister.
Regarding Truss’ “back to basics” criminal and policing strategy, one police chief described the Truss soundbites as “attractive titles” that are “meaningless without further explanation.” The same can be said for Truss’s political economy which only makes sense when placed in historical context.
Truss claimed to possess “a bold new economic plan”, offering “a vision of a low-tax economy with sound economic management, which places personal freedom and responsibility at the heart of everything we do, and which is on the side of hard-working people”. ‘.
‘Do-It-For-Myself Economics’: a confection of British nationalism, politically timely and catchy soundbites designed to appeal to the particular biases of Conservative Party members and so advance his own personal career ambitions to succeed Boris Johnson as Prime Minister
This vision must be achieved through tax cuts, by “reversing the rise in National Insurance and halting the planned rise in corporation tax”, and by unlocking “the enormous opportunities of Brexit with bold reforms to develop our economy. Truss also promised to challenge the Treasury and “assume that orthodoxy, sometimes risk aversion, so that we can get things done.”
Inflation is more dangerous than recession
Truss asserted that this plan “is in line with our true blue conservative values: low taxes, deregulation and bold supply-side reforms.” But his offer of “comprehensive free ports and new areas for investment” is simply not aligned with the traditional fundamentals of British conservatism.
Such an ideology proposes a limited role for the state to protect private property rather than free market capitalism. It also seeks to retain an organic society and orderly change rather than a permanent revolution of market-driven transformation.
Rather, Truss’ statements during her leadership campaign aligned her with the core tenets of the orthodox liberal political economy model of the “development market.” Namely “entrepreneur-led innovation, competition, profit, liberalisation, deregulation and privatization”, which have dominated Conservative Party economic thinking for the past 43 years.
These ideas were first embraced in 1974 by Margaret Thatcher and Sir Keith Joseph, after setting up their own think tank, the Center for Policy Studies (CPS). The aim of the CPS was nothing less than to “change the climate of opinion” in British politics. This would be accomplished by comparing “our own experiences and those of our European neighbours” and then convincing people that Britain needed a social market economy, namely one in which “responsible politicians work with and through the market to achieve broader social market goals”.
Thatcher and Joseph’s reassessment of the economic and social policies of the Conservatives in opposition between 1974 and 1979, and their implementation of privatisation, deregulation and market liberalization during the 1980s, were only the first “stepping stones” to deliver “a radical change in British politics”. economy’.
In the face of the current cost-of-living crisis, which threatens to wipe out all wage growth since 2003 and lead to the biggest two-year decline in household incomes in a century, Liz Truss’s ideological and political vision n offer no solution
David Cameron’s ‘austerity era’ and Boris Johnson’s Brexit delivery were just two more steps. Now it is Truss’ intention as Prime Minister to deliver the next and perhaps final stepping stone in this sea change in the political economy.
Truss defends his vision for Britain’s future
With Liz Truss
Truss had signaled this intention by co-authoring two books, After the coalition: A conservative program for Britain in 2011, and Britannia unleashed: Global Lessons for Growth and Prosperity in 2012. The first, in Chapter 5, contained the campaign policy pledge of “no donations” which was titled “Wellbeing: Ending the Culture of ‘Distribution’”.
Similarly, Truss’ 2019 statement to the Chief Treasury Secretary that British workers needed “a little more graft” only repeated the assertion in Britannia unleashed that “the British are among the worst idlers in the world”.
In the face of the current cost-of-living crisis, which threatens to wipe out all wage growth since 2003 and lead to the biggest two-year decline in household income in a century, Liz Truss’s ideological and political vision n offer no solution.
Even before the onset of the coronavirus pandemic and the current cost of living crisis, the development market was a broken pattern. It had failed to reverse the relative economic decline of the United Kingdom. A 40-year reassessment of Margaret Thatcher’s legacy in her own terms has revealed that every government in the UK since the first Thatcher government has recorded an annual average of slower economic growth.
Consequently, following the financial crisis of 2007-2008, the British people had to endure what the Governor of the Bank of England at the time described as “the first lost decade since the 1860s”, a whole decade of declining real average incomes (taking inflation into account).
Prime Minister Truss has promised to unlock “the enormous opportunities of Brexit”. But there isn’t. Even Brexit Opportunities Minister Jacob Rees-Mogg admitted he was wrong not to admit Brexit would lead to the lorry queues in Dover.
Additionally, the UK’s poor trade performance, which saw it run a balance of payments deficit in its transactions with the rest of the world of £51.7 billion in the first three months of 2022, demonstrated this harsh reality.
Panic causes recession
Unless Prime Minister Truss chooses to take steps towards an alternative economic plan, and one that reflects the £376bn of public spending planned to overcome the coronavirus pandemic, and by the Johnson government in which she has her Even served, the British people will face the prospect of a second lost decade.