Inflation has pushed the political vibes into depths Friedman cannot reach
Over a turbulent summer, which has seen the government go into stasis as a new prime minister is selected, one phrase has come to dominate the political debate: the cost of living. It is characterised by two features in particular. First, rising inflation is seeing a fall in “real” disposable income; secondly, energy prices are climbing rapidly, spurred not least by the ongoing conflict in Ukraine, facing households and businesses with the prospect of unaffordable bills.
It is a concatenation of factors exacerbated by the Conservative leadership contest. Boris Johnson, whose already relaxed approach to governing has become positively horizontal, is declining to act, arguing—not completely without reason—that major changes to economic policy are a matter for the new prime minister. Meanwhile Rishi Sunak and Liz Truss throw haymakers at each other before the result of the poll is announced on 5 September. The result is a dismaying combination of hand-wringing and inaction.
Into this void has stepped the Enough is Enough campaign, a pressure group founded by trades unions and community organisations to argue for above-inflation pay rises, financial support for those struggling, and punitive taxation on the very wealthy. Although many of the members are natural Labour supporters, Enough is Enough is not a creature of the Labour Party, and Sir Keir Starmer has taken fire from them for his own relative inactivity.
Ideologically, there is nothing new about Enough is Enough. Phrases like “society run only for a wealthy elite” and “it’s time to turn anger into action” are standard tropes for the populist left, an impression reinforced by its supporters: the CWU, Tribune, poundshop ideologue Zarah Sultana MP. It is another manifestation of the knee-jerk leftism of Momentum and the claque which still worships Jeremy Corbyn as the king over the water.
By combining irrefutable platitudes with anti-establishment agitprop, Enough is Enough has a superficially powerful appeal, certainly more obviously attractive than the “It’s more complicated than that” propositions which inevitably counter it. It cannot simply be dismissed as a spasm of simplistic utopianism. The campaign has attracted the support of hundreds of thousands of people and is yoked to the current industrial action being led by the formidable Mick Lynch, general secretary of the RMT.
Nuanced arguments, that rocketing energy bills are caused by international events or that above-inflation pay rises may only serve to drive inflation further, are rather missing the point. What Enough is Enough have done in a short space of time is catch the public mood in a powerful if general way: there is a sense that the UK’s economic situation is in almost unavoidable decline, that we are losing social cohesion, that some of the solidarity of the pandemic has been squandered and that society is becoming more and more polarised and divided between the haves and the have-nots.
The traditional free-market argument is that low taxation and a small state will allow the economy to grow, in turn providing prosperity for all. But that argument has lost its potency for the time being, and while a Conservative government should retain it as its long-term strategy, it is not going to be enough in the short term.
We are experiencing the politics of feelings, of “vibes”. These may not adhere to strict logic but their power should not be underestimated; after all, the Brexit referendum was won by the Leave campaign largely on a feeling that something was amiss. The new prime minister will therefore need to present two simultaneous faces to the electorate: one which is sympathetic and open to immediate relief for people’s financial straits, and another which is nevertheless optimistic for the future, mapping out a way for the UK to recover and find a new and prosperous place in the world.
Whether the victor is Sunak or (as seems more and more likely) Truss, the new PM must accept the new political landscape. It is not enough to wait for the medicine of Hayek and Friedman to turn the ship of state around: the passengers demand access to lifeboats now. Unaffordable energy bills are already landing in inboxes and on doormats, and wages are being overmatched by daily expenses. If the new iteration of Conservatism does not address these problems with urgency, then electoral disaster in 2024 seems inevitable.
Rab Butler once said that politics is the art of the possible. Perhaps we might instead say that, as the cost of living crisis mounts, politics has become the art of the necessary as well as the desirable. Enough is enough, comes the cry. The new prime minister cannot afford to appear deaf.