Who's afraid of the big state?
| Author | Butler, Lise |
| Position | EDITORIAL |
In her victory speech on 5 September, Liz Truss told the 81,326 Conservative Party members who had just made her Britain's new prime minister, 'I campaigned as a Conservative and I will govern as a Conservative'. (1) On 23 September, she and her Chancellor, Kwasi Kwarteng, brought forward their mini-budget. At the time of writing (20 October), almost every element has been u-turned on and Kwarteng and Truss are both gone. Backbenchers have been in open revolt and the Tory Party is fatally divided. It is unclear who will be prime minister in a week's time. Jeremy Hunt is the most powerful politician in Britain, but even he rules at the pleasure of the markets.
Under Theresa May and Boris Johnson, as Jonny Ball argues in this issue, we saw a 'radical break with recent Conservative orthodoxy' on the economic function of the state, with corporation tax increased, public spending as a proportion of GDP rising, the minimum wage increased, plans afoot to re-introduce more state involvement in rail and bus networks, and, perhaps most significantly, [pounds sterling]300 billion in spending on coronavirus support for workers and businesses. With Truss, as Ball writes, the Conservative Party underwent 'its Thermidorean reaction, jolting back to its laissez-faire comfort zone'. In the 2012 publication Britannia Unchained, Truss, Kwarteng and their co-authors deployed classic Thatcherite declinist rhetoric: 'we are convinced that Britain's best days are not behind us. We cannot afford to listen to the siren voices of the statists who are happy for Britain to become a second rate power in Europe, and a third rate power in the world. Decline is not inevitable.' Britannia Unchained proposed typically Thatcherite remedies: cutting the state, taxation and regulation. This is precisely what Truss and Kwarteng tried, and failed, to achieve in their few turbulent weeks together in office. (2) With theatrical irony, it was the markets that disciplined a prime minister whose main pitch to her party membership consisted of cosplaying Margaret Thatcher. Financial institutions spectacularly failed to buy the Truss line that tax cuts (especially for the richest and for corporations) would promote economic growth. Thatcherism was long ago exhausted as a governing project. The Tories have trashed their (long over-inflated) reputation for economic competence, and have no big solutions to offer to the major crises--environmental, economic and health--of our time.
So what should Labour do? This issue of Renewal suggests that we should be thinking about that bogey-man of the Tory free-marketeers who Truss and Kwarteng briefly sought to represent: the state. What does it do, and how; who gets to control it, and how is power distributed in our constitution and among our institutions?
The neo-statist moment
In this issue, Paolo Gerbaudo and Steven Klein call for the Labour Party to capitalise on the current 'neo-statist moment' by proactively shaping a new policy response to the systemic crises of recent decades: the 2008 financial crisis, the pandemic and climate change. This requires, they argue, a shift away from the rightward drift that helped social-democratic parties...
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