A heroic prime minister ahead of her time – OpEd – Eurasia Review
After the shortest Prime Ministerial term in British history, there is no doubt that the socialist agenda has become an absolute mainstream in world politics.
The socialist agenda becomes the core of all influential political elites, both those seeking and those holding the mandate of power, in all developed countries. This means that we must be soberly aware of the inevitable threats and devastating consequences for the civilized world which de facto socialism, as a system of socio-political and economic order, brings with it.
I deliberately did not use the term “ideology” here for an obvious reason: current socialism is not an ideological doctrine under which the economic and political order changes. The current metastases of state expansion are successive shifts within the political mainstream, veiled in public political rhetoric by past assumptions of market value, freedom, entrepreneurship, the primacy of individual rights , etc. Such changes are of an evolutionary nature and do not have an instantaneous effect, since they gradually extend the rights of the state with simultaneously a more or less linear dating of the population and a coherent subjection of economic agents to state redistribution. .
All the economic and social policy of the developed countries since September 11, 2001 has aimed precisely at this: the effective expansion of the redistributive mandate of the State. The widest range of external and internal threats, from terrorist attacks to cybercrime to pandemics, has been the logical backdrop for the transformation of the political consciousness of Western society, which has assimilated a dominant idea: the dangers and uncertainties of the modern world dictate the need for maximum protectionism.
In the logic of the social contract, society voluntarily accepted the empowerment of the state in exchange for the reduction of its rights and opportunities. Voluntarily does not mean consciously, and this applies to both society and the state. Rather, we are talking here about the conditioned behavior of society and the state, represented by political elites. I am infinitely far from the senseless conspiracy that is unfortunately inherent in the extreme spectrum of “right-wing” thought, which imposes myths about one world government and promotes the control of all world processes by mythical titans. Having no desire to comment on all these conspiracy theories, I will only say that the very idea that socio-economic processes can be modeled, constructed and controlled in a given vector contradicts in the long run the very essence of libertarian philosophy. , literally postulating the following: it is impossible to account for all the possible factors and configurations for a deliberate manipulation of social processes and the economy as complex and open self-organizing systems.
However, it is evident that the adaptation brought about by conditionally external triggers has become a rather endogenous process of transforming socio-political preferences and the highly conditioned behavior of society and political elites.
At the same time, it must be understood that this state of affairs primarily benefits political elites as political rent seekers. The emerging societal demand for paternalism and protectionism that political entrepreneurs have begun to see as an unconditional opportunity to benefit today and tomorrow. This led to an even more intensive stimulation of this demand from the population, determining the trajectory of the movement in an expanding spiral: the more there is, the more there is. The big problem is only that this approach drastically narrows the planning horizons of political entrepreneurs, which signifies their reluctance, perhaps sometimes degenerating into an inability to trace the perniciousness of satisfying and maintaining such popular intentions from a civilizational perspective. longer.
The consequences of this erosion that we have seen and experienced over the past 20 years. The exorbitant expansion of state expenditure and the growth of social subsidies were made possible naturally by hypertrophied monetary expansion and deep and wide expansion of the state in economic processes. On the one hand, the state constantly props up bad and inefficient businesses, taking away resources that could have been used much more effectively by more successful businesses. On the other hand, the increase in taxes and the tightening of regulations which are inevitable for the implementation of such a policy of “common welfare” hit hardest the most efficient economic agents, who are the main driver of market economy, job creators. , develop and implement new technologies for widespread use. At the same time, the active growth of government infrastructure programs and government contracts, as another type of government spending, distorts the competitive environment and opportunities for market players, increasingly concentrating opportunities in the hands of political elites.
Socialism is in fact a linear redistribution by the state of benefits directly to the people. Taking care of the population in the form of direct redistribution in its favor results in the aggravation of crises and, in the long run, in collapse. If the state redistributes directly to the population, or at least sinks further and further into such a modus operandi of economic and social policy, this automatically means fewer opportunities for entrepreneurs and producers.
The bloated monetary expansion along with the quantitative easing programs was, in fact, a move in precisely that direction, in the direction of de facto socialism. Government leverage is primarily consumer driven, i.e. inflating consumer demand. Quantitative easing and the buying up of bad assets on the balance sheet is a de facto intervention in a competitive market environment, with the same objective: to preserve consumption potential and social stability by preserving employment, even if these are jobs in inefficient industries.
It is in the quasi-socialist paradigm that the poor live better and better at the expense of the rich, while the rich begin to live worse and worse. But it is the rich, and therefore the most enterprising and productive, who create added value and ensure technological development, allowing the less rich to live better by participating in the creation of goods and increasing productive efficiency, rather than ‘directly receiving goods’, for nothing’, without participating in this process.
The task of the state is not to take from one, the most efficient, and give to another, less efficient. The task of a civilized free state is to enable as many people as possible to create added value and to participate in this process. This is true inclusion, not at all what left-wing governments in developed countries have in mind, i.e. the equalization of inequalities through the state, in fact, the directive redistribution of richer to less rich.
But to secure such conditions, the state must give up many things it has already got its hands on. More importantly, it must sharply reduce the redistribution mandate and create positive market conditions such as inducing supply, i.e. production, rather than stimulating demand, i.e. say consumption. It requires improving the competitive environment and stopping crushing the economy with government orders and ineffective business support, it requires relaxing protective regulations, it requires lowering taxes, it requires lowering social spending, this finally requires leveling and stabilizing inflation – sharply reducing and bringing monetary expansion back at least to Friedman’s rule.
But such decisions require a strategic vision and longer planning horizons for all socio-political actors, because the consequences of such decisions could be painful tomorrow, although necessary and purifying. Reagan, Thatcher, and Kohl had the courage to make such decisions and think long-term, resulting in two decades of economic growth, social stability, and technological development in developed countries in the 1980s and 1990s. positive externalities, we also achieved the liberalization and democratization of the rigid autocracies of the USSR and China.
Something similar was going to be done by Liz Truss. Tax cuts for the rich and businesses, cuts in social spending, maintaining a tight monetary policy were the main points of his program. The harsh reaction and rejection of such measures by the public, investors and above all all political elites, including members of his party, says only one thing: nobody wants the party to end and the face of drink come tomorrow.
The reaction of the markets and the rise in government debt yields do not speak of bad decisions by Truss, they only speak of the fragile and unsustainable state of the economy and the social system if bailout decisions provoke such a reaction panicked and hysterical. This economic condition is the result of the very policies of leftist bias and statism of the past 20 years in the developed world.
Liz Truss timidly attempted to make such difficult cleaning decisions by trying to think long term. The result was a fiasco of his initiatives. The reason for this end is obvious: the political elites are not ready to give up their growing rights and opportunities for rent-seeking political entrepreneurship, and the population, investors and productive businesses are not ready to tolerate disadvantages today in order to obtain very good results. opportunities tomorrow. The system is in a bad balance and so far neither side is willing to upset it, until the appropriate trigger occurs. The bad news is only that in today’s world, this potential trigger is likely to be far more dangerous and destructive than anything previously known.
In the meantime, let’s say thanks to Liz Truss. She was ahead of her time. At least she tried.