Second Time Around.

Cynical Assumptions: British Prime Minister Liz Truss and her Chancellor of the Exchequer, Kwasi Kwarteng, appeared to be operating on the cynical assumption that there is insufficient historical memory available to the British political class for anyone to recall that her “supply-side economics” remedy has been applied, off-and-on, and always catastrophically, for more than 40 years.

THAT LIZ TRUSS AND KWASI KWARTENG were surprised at the dramatic reaction to their “Mini-Budget” is, in itself, surprising. After all, the contents of Kwarteng’s package had been “trailed” through the news media for weeks. The financial markets, it was fondly assumed by the British Prime Minister’s advisers, had already “built-in” her government’s policies. Their shocked reaction to the markets’ shocked reaction is readily imagined.

In many respects, what has been on display in the United Kingdom over the past few weeks is a disturbing contest of cynicisms.

Truss and her team were operating on the cynical assumption that there is insufficient historical memory available to the British political class for anyone to recall that her “supply-side economics” remedy has been applied, off-and-on, and always catastrophically, for more than 40 years.

Meanwhile, the financial markets were operating on the equally cynical assumption that Truss could not possibly be serious, and that her commitment to tax-cuts in the midst of double-digit inflation and a cost-of-living crisis was just one of those things you say on the campaign trail, and then immediately jettison once in power. That the Prime Minister and her Chancellor of the Exchequer would actually go ahead and blow-up the UK economy was totally unexpected – and the Pound paid the price.

Viewed dispassionately, what is most shocking about this contest of cynicisms is how little impact the experiences of the last three years have made on both the political and financial elites.

The global Covid-19 pandemic, and the measures adopted to resist it, should have made Truss’s disinterment of supply-side economics (also known as Thatcherism, Reaganism, Rogernomics, and neoliberalism) the object of risible laughter. Beating the pandemic – and saving the global economy – had been achieved by printing money in huge quantities, spending it like a sailor on shore-leave, and then upping the state’s revenue collection capabilities to prevent the wallowing economic ship from capsizing and sinking.

In other words, by adopting the very measures supply-side economists have spent the last 50 years warning politicians against.

Truss and her fanatical Tory friends should also have come away from the pandemic with the vital importance of building and maintaining social cohesion seared into their political consciousness. If the ethical case for looking after the people somehow eluded her, Truss should at least have been educated by the fate of her predecessor. Having won an historic election victory on the strength of becoming the “People’s Tory”, Boris Johnson came to grief by being exposed as a do-as-I-say-not-as-I-do kind of guy.

“Levelling-up” had proved to be a winning slogan for the British Conservatives. Grinding-down is proving considerably less popular. It takes a great deal to put the Sir Keir Starmer-led Labour Party 33 percentage points ahead of the Conservatives, but Truss’s mini-budget rose to meet the challenge!

New Zealand’s own conservatives, represented in the National and Act parties, have shown as little interest in learning anything from the last three years as their British counterparts. They do, however, appear to be quite keen on taking instruction from the same right-wing think-tanks as the Tories.

Christopher Luxon demonstrated this pedagogical relationship by turning up to a meeting of the Policy Exchange – one of the big-three UK ideology factories alongside the Centre for Policy Studies (Thatcher’s baby) and the Institute of Economic Affairs (Truss’s current Svengali). Keen, perhaps, to show his hosts that he, too, possessed the requisite hard-nosed ideological chops, Luxon declaimed against a New Zealand business community that was “getting soft and looking to the government for all their answers.” The conservative government he intends to lead by the end of 2023 will be all about “unleashing enterprise”.

How? Well, this is where it all gets just a little bit embarrassing. Luxon’s formula for success turns out to be exactly the same as Truss’s: cut taxes, restrain government spending, reduce the regulatory burden on private enterprise. In short, Luxon’s National Party is re-dedicating itself to the precepts of supply-side economics.

Not surprisingly, the sharply negative reaction of the British financial markets to Truss’s resurrection of Thatcherism, has prompted questions here about Luxon’s revivification of the economic and social policies of Roger Douglas and Ruth Richardson. National’s critics point to the obvious similarities in the two parties’ programmes, and are pressing Luxon to explain why their similar content will not produce similar results.

The Opposition’s right-wing allies have been quick to play down the similarities between the policy frameworks of Truss and Luxon. According to one economist, they are as different as “chalk and cheese”. National’s tax-cuts, for example, are much smaller when presented as a percentage of New Zealand’s GDP. Neither do New Zealand consumers yet require the massive subsidies lavished on the UK’s industrial and domestic energy suppliers to keep the home gas-fires burning.

Even so, the general shape of National’s policy platform conforms – at least in ideological terms – with that of Truss and Kwarteng. Further enriching those at the summit of the income pyramid is held, as a matter of faith, to be the necessary first step towards re-igniting capital investment, labour productivity and economic growth. Paradoxically, the utter failure of these measures to generate growth in the short term is taken as proof that they are working.

As anyone who was paying attention as supply-side economics was being imposed here in New Zealand during the late-1980s will recall, Kiwis were constantly being enjoined to endure “short-term pain for long-term gain”. Never mind that the ill-fated “New Zealand Experiment”, like the equally disastrous “Kansas Experiment”, produced the opposite of what was promised. They simply hadn’t been given the necessary time to bear fruit.

Those undergoing the transition from “the failed policies of the past” to the neoliberal nirvana of the future, had to be prepared to “stay the course”. In the long run, the supply-siders policies were bound to work. The problem being, of course, that, in the words of the now despised economist, John Maynard Keynes: “In the ‘long run’, we’re all dead.”

It remains to be seen whether Truss possesses the single-minded tenacity of her hero, Margaret Thatcher, who, when pressured to reverse her hard-line policies, famously taunted her critics: “You turn if you want to, the Lady’s not for turning.” One suspects, however, that Truss is living proof of Karl Marx’s observation that History repeats itself: the first time as tragedy, the second time as farce.

Supply Side Economics has always been bogus: economically, mathematically, politically and morally. It has never been anything more than a screen behind which the wealthiest are protected at the expense of the poorest.

But, as the saying goes: “Fool me once, shame on you: fool me twice, shame on me.”

Truss and Luxon seem to have forgotten that the British and the New Zealand people have seen this movie before. They know how it ends. Second time around, they may not be quite so willing to pick up the tab.

POSTSCRIPT: On Monday, 3 October (GMT) Kwasi Kwarteng executed a “screeching U-turn” and abandoned his promise to abolish the top-rate of UK Income Tax. The rest of his supply-side package remains intact, however, raising the wicked thought that the tax-cuts-for-the-wealthiest bit might have been included in his mini-budget for the express purpose of being discarded later ..... under pressure. Are the Tories really that cynical? Is the Pope a Catholic? 

This essay was originally posted on the Interest.co.nz website on Monday, 3 October 2022.

A King’s Grasp.

Worst Case Scenario? Mike Bartlett’s teleplay, King Charles III, teases out the consequences of a constitutional monarch who makes the mistake of attempting to defend the rights of his subjects.

WHILE MANY OF US pretended that Queen Elizabeth II would, somehow, live forever, others among us knew better. One of those who knew these days of mourning – and celebration – would come, and gave thought to what they might portend, was the British playwright, Mike Bartlett. His thoughts turned to the man who would succeed the Queen, and the times into which the reign of Charles III would be launched, and he wrote a play. Like all wordsmiths, Mr Bartlett understood that if one truly wishes to tell the truth, then one had best write fiction.

Bartlett’s play – later turned into a BBC 2 television drama starring the late Tim Pigott-Smith – was called, simply, King Charles III. Described by The Daily Telegraph critic, Jasper Rees, as “pure televisual gelignite”, the BBC 2 adaptation places before royalists and republicans the two most dangerous questions that have always lain, unasked and unanswered, at the heart of constitutional monarchy.

The First: Is there any act of Parliament so injurious to the common good that no monarch, in good conscience, could be expected to give it the royal assent?

The Second: What is likely to unfold if the royal assent is withheld from such an act?

The legislation Bartlett invents for the purposes of his dramatic thought experiment seeks to restrict the freedom of the press. For centuries, this tradition has protected the people from those who would oppress them. Bartlett’s fictitious Charles, aware that the bill has passed through both Houses of Parliament, knows that he now constitutes the sole remaining barrier to the destruction of a fundamental freedom.

According to the Nineteenth Century constitutional writer, Walter Bagehot, there are three crucial rights available to a British constitutional monarch. These are: The right to be consulted. The right to encourage. The right to warn. Having swiftly exhausted all three, the fictional Charles must decide upon his next move.

The real King Charles III will soon face a series of equally portentous choices.

The government of the new Prime Minister, Liz Truss, is committed to passing legislation inimical to the survival of British civil liberties. She has filled the upper echelons of her Cabinet with individuals who are well to the right of most Tory MPs. The 80-seat majority bequeathed to her by Boris Johnson is almost certainly large enough to withstand any last-minute pangs of Conservative Party conscience. Only if the King withholds his royal assent, will the ancient rights of “freeborn Englishmen” be preserved.

Having pledged to both houses of the British Parliament that he will follow the example of his mother on matters constitutional, the smart money would have to be on the real King Charles III behaving very differently from the fictional King Charles III.

In the months ahead, the British Isles look set to be rocked by civil discord and state-sanctioned violence. In the looming contest, the British people may win, or, the British state may win. Either way, the British Crown will certainly lose.

If the British people are trampled beneath the boots of the Police. If their most inspiring leaders, like the trade union leader Mick Lynch, are imprisoned. And if, throughout it all, their king maintains a constitutionally-sanctioned silence. Then, whatever system of government emerges from the crisis, its head-of-state won’t wear a crown.

A bloody, bold and resolute monarch, however, might fare better than even the fertile imagination of Mike Bartlett has compassed.

A recent survey of British voters aged 18-34-years-old indicated that around 60 percent of them believe their country should be ruled by a strong leader with the power to make decisions for the good of the country – without being constrained by Parliament.

Is it stretching too long a bow to suggest that Bartlett has perceived in the personality of the real Charles precisely the character traits that make his fictional King Charles so compelling? Having waited 70 years to exercise sovereignty, will he really be content to follow dutifully in his mother’s outsized footsteps?

The multiple crises which loom ahead of the United Kingdom are of sufficient severity to cause it to come apart at its historic seams. The corrupt system that threw up Liz Truss may no longer be capable of saving it.

If a man’s reach should exceed his grasp, then, surely, so should a king’s. Or what’s a kingdom for?

This essay was originally published in The Otago Daily Times and The Greymouth Star of Friday, 16 September 2022.