Common sense now has it that “the markets” are Britain’s new rulers. The chancellor, Jeremy Hunt, is co-governing with them, so the story runs, in contemplating “eye-wateringly” difficult decisions to cut public spending, as would a putative Labour successor, Rachel Reeves. Thus, just as libertarian dreams of stupendous unfunded tax cuts to drive growth are now over, so are social democratic hopes of building a just society. Allegedly, the implosion of Trussonomics has made the lights go out across the political spectrum; the future offers only variants of austerity.
I disagree. Britain is not yet an emergent economy. It still has vast resources if it chooses to access them. It possesses a fabric of institutions ranging from the UK Debt Management Office to the Bank of England that, given the right constitutional framework and proper economic and political leadership, are more than capable of being the markets’ master rather than their servant. Economic and political choices remain.
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