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 “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 con(wo)men over the coming years.
Sweet lord. The PM is literally lost for words on BBC Stoke when questioned about mortgages. pic.twitter.com/BGCv0RfMBR
— Dino Sofos (@dinosofos) September 29, 2022
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 who came within a hair’s breadth of winning the 2017 election, actually made it into Downing Street, 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 political programme was simply a foretaste of the war they were all too ready to wage on his economic programme.
My latest: Corbyn's election to lead the Labour party didn't overturn the rigged political system or end the corporate chokehold on power. His victory was an accident, and the system has been fighting back with all its might to correct the error ever since https://t.co/2u0Vyo0qLU
— Jonathan Cook (@Jonathan_K_Cook) July 3, 2019
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.