Liz Truss is wrong. Mrs Thatcher’s free-market spirit is long dead
To survive, the Right needs to make new arguments for capitalism. The old ones no longer work
History doesn’t repeat itself, even if it rhymes. The free world is plunged into a new Cold War. But its ideological rival is capitalism with Chinese characteristics rather than Soviet Communism. Britain is gripped by strikes. But they leave us vexed about whether nurses will see to the sick, rather than whether undertakers will bury the dead.
After being ousted as PM after just 49 days, today’s answer to Margaret Thatcher crusades against anticapitalist forces not from Downing Street but from the pages of this newspaper. Things have changed in both subtle and important ways. The arguments in favour of low taxes and deregulation that were once so powerful fall flat when deployed today.
That is because the big threat to civilisational progress is not the same as it was a generation ago. The socialism of the 1980s was a peculiar cross-breed of working-class radicalism and champagne socialism, both aggressively utopian and sopped with middle-class guilt. That made it vulnerable to a thorough bludgeoning by the Right. Thatcher could push through a radical agenda, while at the same time presenting herself as serious-minded pragmatist in the face of Left-wing militancy. By this point, the socialist animal was mortally weakened by a track record of failure. Under the democratic socialists of the 1960s and 1970s, Britain’s economy declined precipitously and strikes crippled its industry. Hence, when Thatcher said There Is No Alternative, much of the country believed her.
Today’s emerging anti-growth movement is a trickier beast. It is not straightforwardly socialist. It is, rather, an alliance between a Leftish younger generation and centrist managerial technocrats, helped along by shortsighted Tory nimbys. The longer the Right refuses to confront this slightly nuanced reality, the stupider it looks. When Liz Truss suggests that she was brought down by a Left-wing economic establishment, she sounds like a crank. And she misses the point.
The old arguments in favour of growth simply do not work against this slippery new alliance. Ms Truss was never really able to effectively present herself as a pro-growth pragmatist taking on ideologues. That is partly because today’s technocrats – the real heirs to Thatcher in a cruel and twisted way – have taken on many of her arguments, not least that markets are sovereign and there is no sensible alternative to the current path. Nimbys equally portray their militancy as the small man standing up against “Stalinist” housing quotas.
As memories of the 1960s and 1970s fade, it is no longer demonstratively obvious to most people that an alternative embrace of socialist planning is doomed to fail. There is a new millennial generation who only have experience of capitalism’s pathologies and hypocrisies – from imploded energy markets to the boomers who harrumph about high taxes while blocking fracking projects and new housing “eyesores”. Put simply, the Right will continue to lose the argument on capitalist growth until it acknowledges the fact that right now, capitalism is not working in quite the way we would like.
Simply declaring that “profit isn’t a dirty word” in defence of gas companies extracting bumper wartime profits from a totally botched energy market doesn’t win many votes. The Right needs to be far more confident in confronting failed markets.
Second, Thatcherites need to show that they have a long-view grasp of what is going wrong. Ms Truss incorrectly suggests that high taxes and regulation are the sources of Britain’s woes. Yes, there is a risk both these trends have now tipped into a doom-loop of ever-higher taxes and ever-more anaemic growth, but that is not the origins of our problems. Like the rest of the rich world, Britain is suffering from stagnating productivity due to a technological slowdown which has been unfolding since the mid-70s. Excessive risk-taking by the financial sector obscured this reality for some time, artificially inflating Britain’s productivity through the Blair era until the credit crunch.
The pessimistic take is that all progress has slowed because the low-hanging fruit to boost productivity has been picked, from motorised machinery to education for the masses. The optimistic take is that we are merely experiencing the growing pains of a transition from a world economy powered by production to one driven by ideas.
The Right needs to acknowledge that it has some understanding of our predicament and offer ideas for stimulating technological innovation – whether it’s enterprise zones, or more funding for high-risk, highreward research that the private sector has little time for.
The Right needs to reframe its defence of capitalism. As Joe Biden’s industrial policy hints, overarching arguments in defence of capitalism must also be urgently refined. When it comes to the free market, it is now a race against time to convince technocratic politicians not to throw the baby out with the bath water. State planning cannot propel economic growth. The aim must be to encourage entrepreneurial innovation in places the markets would not otherwise reach, facilitating private enterprise in a framework of public action. If the Right carries on clinging to the idea that the role of government is to simply get out of the way, it will miss a vital chance to prevent costly mistakes.
Most importantly – and on this Truss was completely right – pro-capitalists need to be able to look people in the eye and tell them sacrifices need to be made by all. Some of those sacrifices must fall on comfortable baby boomers into whom it has been drilled that selfish individualism is a virtue. Houses need to be built so that young people can afford a home, and the country needs to be more open to disruptive domestic energy projects like nuclear and fracking. One might have faith that, just as there are socialists who back higher taxes because they believe it is for the greater good, there are conservatives who will back “ugly” and “noisy” developments if they can be convinced it must be done. It is up to the Right to make a passionate case to them.
Until free-marketeers grasp the many-headed monster they face, and learn to make their capitalist arguments in a different way, they risk fading into irrelevance – and looking slightly mad.
‘Procapitalists need to be able to look people in the eye and tell them sacrifices need to be made by all’