There are two lessons to learn from the UK's current economic meltdown – and commentators are obscuring both of them.
The first, and more obvious conclusion, is that Britain has a completely dysfunctional political and media system that has allowed two mediocre, clueless careerists like Liz Truss and Kwasi Kwarteng to reach the pinnacle of the power pyramid – and then car-crash the economy because they refused to listen to economic advisers whose sole job was to stop them sabotaging a system carefully calibrated to maintain a transatlantic Ponzi scheme designed to enrich a wealth elite while trashing the planet.
As Noam Chomsky has observed often enough in the wider context of western democracies, the British establishment has – or at least used to have – a very efficient filtering system in place to weed out not only those ideologically unsuited to supporting the hierarchical structure of privilege it had carefully constructed but also those lacking the temperament or intellectual heft to do so. The system was designed to block anyone from reaching a position of significant influence unless they could dependably contribute to keeping the system in good order for the elite.
The signs are that, as late-stage capitalism runs into the cold realities of a physical world with which it is in conflict and from which it seeks to distract us – with aggressive identity politics, the celebrity and “It’s all about me” culture, and social networking – the effectiveness of these filters is breaking down, for good and bad. That is why dangerous narcissists like Donald Trump and Boris Johnson are increasingly floating to the top. It’s also why authentic, moderate socialists such as Jeremy Corbyn and the rail union’s Mick Lynch, as well as Bernie Sanders in the United States, have gained more of a purchase than the establishment ever intended.
Truss’ elevation to prime minister, immediately in the wake of Johnson's festival of cronyism and corruption, demonstrates that these filters no longer function. The system is breaking down ideologically just as surely as the infrastructure of supply chains and gas pipelines is breaking down materially. We are in store for a rocky ride at the hands of serial blunderers and conmen over the coming years.
Hive mind
The second lesson is in many ways the flipside of the first.
Truss may have triggered the economic crisis through a toxic mix of ego, incompetence and ideological fervour, but we should be extremely wary of focusing exclusively on blaming her. She didn’t do the equivalent of jumping off a cliff on the assumption that she could defy gravity: the crisis was not caused because she violated some fundamental, scientific law of economics. The current crisis is manmade. She is being punished for doing things "the market” – meaning people who control our money – do not like.
Those functionaries of capitalism don’t sit around plotting how they will react to a budget like Kwarteng’s. They responded in unison much as a big shoal of fish suddenly and collectively take a new course. They operate as a hive mind. In this case, they were driven by shared economic assumptions, which in turn are based on a dominant economic ideology, which in turn is based on a consensual political worldview – one that largely ignores social justice or environmental realities, as the growing polarisation in wealth and the climate crisis indicate only too clearly.
"The market” believes Truss is in danger of wrecking the system that upholds their privilege – by accruing too much debt while also starving the government of income by cutting taxation too much. Because economics is not a science but a kind of elite formation psychosis, the instinctual reaction of "the market” to Kwarteng’s budget was to … wreck Britain’s economy. The Bank of England stepped in not to change the fundamentals of the economy but to “reassure the market”. You don’t need to reassure a law of nature.
Economic 'laws'
Truss’ recklessness and ideological fervour have got "the market” jittery – and with good cause. But it would behave in an almost identical fashion against anyone who broke what it considers as the “laws” – termed “sound money” this week by Truss’ supposed political rival, Sir Keir Starmer – underpinning a globalised capitalist economy.
Witness the current pile-on against Truss, with the City crushing her, forcing her to bend to its will. Can anyone doubt that had Jeremy Corbyn, the former Labour leader, emerged as prime minster from the 2017 election, as he came within a hair’s breadth of doing, he would have been treated at least as harshly as Truss is being dealt with now? His radical programme of spending and investment was a much bigger threat to "the market" than Truss's confounded efforts to win favour with big business and voters at the same time.
Corbyn's programme would have been greeted with hostility not because it exuded incompetence, as Truss’s does, but because the City would have refused to stomach his plans to meaningfully redistribute wealth and make British society fairer. He would have been made to bend to the will of "the market" even more ferociously than Truss is being now.
The establishment who maligned Corbyn as a traitor, and a spy, and an antisemite, did so not because these things were true but because the former Labour leader was a threat to their wealth and privilege. The devastating war they waged on his programme politically was simply a foretaste of the war they were all too ready to wage on his programme economically.
Starmer, Corbyn’s successor, understands this only too well. Which is a major reason why he is so timid, so feeble, why he hews so closely to the wishes of the self-proclaimed “masters of the universe”.
The economic game is even more rigged than the political game. When the banks and hedge funds nearly brought their giant Ponzi scheme crashing down in 2008, they were decreed by western governments as “too big to fail”. Taxpayers bailed them out twice over: first, through years of austerity, through savage belt-tightening, to pay off the elite’s debts; and then, by being required to fund the rebuilding of the casino so that the elite could fleece the public all over again.
Truss may be a lightweight. But the mauling she is receiving right now ought to sharply remind us of the limits faced by any politician who wishes to change a system that was designed to protect itself ruthlessly from change.
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Another excellent, exemplary bit of journalism, thank you, Jonathan. I would be interested in some deep diving on anybody’s part, on some of the points in this provocative analysis.
The identity politics on steroids, the celebrity involvement in legitimizing the preferred party and its platform points...this is straight out of the Democrat Party’s playbook. So the Tory Party seems to be divided between the pols who try to convince constituents that they are well represented, while the party intelligentsia writes policies that nobody can defend. If this is correct, then the Tories are the UK’s Democrats. The DP is well represented by elected whatever who favor MFA, but that position gets no traction, attention or mention, once the elections are over. Maybe it’s that the Tory platform builders are the Republicans and the Tory MP’s are the Democrats. In any case, I believe that the substantial support that we see for insincere faux populists like Boris and Trump are rooted in duped members of each social culture who have been irreversibly conditioned by religion (us) and tradition (them). In both cases, xenophobia and outright contempt for people of color, language of inclusiveness, and a mocking animus for those who don’t agree are the salient descriptors on both sides of the pond.
And the Labour Party seems to be in an existential struggle for it’s true self. Keir Starmer looks to be as feckless and dangerous as Tony Blair. So the power brokers in the UK appear to have successfully Clintonized Labour. And Corbyn and Sanders were exceptions that prove the rule.
How long can these theatrical absurdities, these political parties that are the intended push and pull
of the puppet masters, how long can they survive the light?
Jonathan, I think this is more than incompetence. The Truss & Kwartang budget unravelling so quickly, enabled those Tory Donors such as Crispin Odey & all speculators to short the pound and bring the whole system crashing down (payback time). If just incompetence, they would have allowed OBR to report on implications. Both are heavily involved with Tufton St Mafia IEA, Henry Jackson Society, Tax payers Alliance all are invested in the Freeport/ Charter Cities project where Corporations decide laws, tax rates, workers rights and provide what they deem, acceptable Public Services & Health Care…….Crash the Economy…..we urgently need growth NO. No strikes, reduced benefits & goodbye NHS, more dark arts than incompetence. Truss warned she was prepared to be unpopular. But I do agree if a Corbyn government had produced any budget, they would have been crucified.
Why are Labour Party not highlighting this threat?