Despite their general disagreements, it is clear that the issues that divide the candidates are mostly tactical rather than ideological. Both candidates firmly believe that tax cuts and a smaller state are the path to prosperity. Both believe that Brexit will unleash the economic potential of the United Kingdom. Both look to Margaret Thatcher for answers to the problems of the United Kingdom.
Truss’ plan to cut taxes and curb union power has powerful echoes of Thatcherism, and some commentators have noted striking similarities between her campaign and that of the Iron Lady.
Meanwhile, Sunak wrote in the Daily Telegraph: “I am Thatcher, I am running as Thatcher and I will rule as Thatcher.”
It remains to be seen whether the candidates will actually judge Thatcher’s image or not. But one thing is clear: Reheating Thatcherism is not the answer to the UK’s deep-seated crises.
Many of the UK’s most pressing problems – from rising inequalities and deindustrialization to housing affordability and utility failures – have their roots in the Thatcher economic revolution. The failures of privatization, deregulation, and the down-stream economy underpin many aspects of Britain’s economic malaise.
So offering a turbocharged Thatchery as a solution to Britain’s problems is like trying to cure lung cancer by smoking a hundred cigarettes. The disease cannot be cured.
But the Conservatives are not the only party that has gone back to the past. This week, Keir Starmer laid out his most comprehensive view of the economy to date. According to the leader of the Labor Party, the party will run in the upcoming elections on the topic of “growth, growth and growth”. Prioritizing economic growth is, of course, not new – it has been a priority of almost every government in the modern era. The important question is: What kind of model will be followed for growth?
For Starmer, the solution is to stimulate private sector investment and innovation, backed by the government’s pro-business policy. In a clear departure from the direction of the party led by Jeremy Corbyn, the Labor Party has distanced itself from nationalization and public ownership in recent years. Instead, the Labor government will focus on “working in partnership with business”. As Starmer told the Daily Mirror, “My priority is growth and partnership. It is not an ideological attachment to certain models of ownership.”
It remains to be seen what this partnership with business looks like. While Starmer in his speech spoke of the need for an industry strategy to “make sure this partnership grows our collective contribution”, he called elsewhere for the UK to scale back financial services regulations “to keep the city competitive”.
The hope appears to be that, with the right support, British companies can transform the economic fortunes of the United Kingdom. In turn, the proceeds of unleashing private sector growth will enable the labor government to invest in public services and raise wages. “Without growth we will not have a high-wage economy. Without growth we cannot revitalize public services,” Starmer said.
If this sounds familiar, it’s because it bears a striking resemblance to another former prime minister: Tony Blair.
The problem with this approach is that it ignores the systemic causes of UK economic problems. Indeed, large parts of British companies are engaged in wealth extraction, not wealth creation.
From the financial sector to real estate and utilities to pharmaceuticals, many of the UK’s most profitable sectors are involved in the process of extracting wealth from workers and transferring it to asset owners. Profits are made not through entrepreneurship and innovation, but through owning and controlling scarce resources—whether that’s land, natural resources, monopolistic networks, intellectual property, or money. In other words: winning someone over is another pain.
Neither the reheated Thatcherism of Truss and Snack, nor the revitalized Blairism of Starmer, suggest confronting the extractive model of the United Kingdom. The former will put him on steroids, while the latter will let him continue unchecked. As long as these are the choices we face, the UK’s deep-rooted economic problems are likely to remain.