Katherine the Great

It is hard not to write about the end of the short political career of Liz Truss, harder still to say something funnier than the array of jokes already printed, and impossible to write about the dangerous political asteroid that is Brexit.

Truss’ exit is the logical outcome of the Tory party’s hatred of Europe on one hand and inability and unwillingness to arrest their country’s relative decline, that has consumed British politics, troubled the EU, permanently damaged the UK and likely destroyed the Union. This bonfire may only end when the Tory party itself is consumed by Brexit, and this day may not be far off. Even with a new prime minister, in the context of severe economic stress in the UK we cannot be far away from a general election, which based on opinion polls, would effectively wipe out the Tories.

Truss’ premiership will go down as the worst and shortest in British history, competing with the likes of George Canning who died after 121 days in the role, and Andrew Bonar Law who stepped down with illness after 211 days. Even, Edgar Æthling who ruled England from October 1066 till William the Conqueror stepped in in December 1066, lasted longer.

Equally, Truss will make Lord North (who lost the American ‘colonies’) and Anthony Eden (Suez) look like strategic geniuses.

That the current cabinet is now made up largely of ‘Remainers’ and the political-economic landscape in the UK is in ruins, support the sense that Brexit was a bad idea. That some Tory MP’s and party members still want Boris Johnson as prime minister suggest that pockets of denial remain, and that more ‘pain’ is necessary.

Brexit allowed the most ambitious, least able politicians to come to the fore, and it is time to now reverse this. One recent example of the clash of ability with politics comes in Kate Bingham’s recent book ‘The Long Shot’ where she details the race to find and distribute a COVID vaccine in the UK, and the political machinations involved in the process.

The implosion of the Brexiteers allows many people to say ‘I told you so!’, and I am going to clamber shamelessly onto this bandwagon. It could have been very different.

Some four years ago when I wrote ‘The Levelling’ I created a character called Katherine Chidley. She was based on a very impressive 17th century activist and businesswoman of that name. Born in 1616, Katherine Chidley was one of the most eloquent and prominent women in public life in mid-seventeenth-century England. She wrote widely, ran a business (selling socks to the army) and was the mother of seven children.

In the book (chapter six – much of what follows is directly from this) I imagined a modern politician in her image, newly elected, and thrown into the position of finance minister. As such her aim is to find a formula for sustainable economic growth that will also lead to a balanced society (Liz Truss could have taken this path but didn’t).

Chidley is determined, especially to avoid creating imbalances in debt levels, asset prices, and trade. Minister Chidley has many obstacles ahead; the first is coming to grips with her department and with the nuances of economics and finance.

‘As the new finance minister she might, if not careful, find herself being quickly carried along in the jargon of economics, speaking in terms of deficits and the code of GDP forecasts. Like most professions, finance and economics have their own codes, rituals, and language. To the outsider, most of this is dull and hard to comprehend (even Kwasi got it wrong).

In her first weeks in the job Chidley will see economics and policy making from the inside and will make a journey of discovery, learning to distinguish cosmetic drivers of growth from longer-term, more meaningful factors —such as a focus on investment in human development. They take time to show dividends but are ultimately the ingredients that make countries strong and resilient.

In her first few days in the job, she asks her chief civil servant or “Sir Humphrey” to give

her an honest view of the lay of the land: What is the outlook for economic growth, where does economic growth come from, and, optimistically, how can she improve her country’s level of growth?

An honest mandarin might point out that economic growth, as we have come to know it, is getting scarcer and more constrained. In order to soften that blow the mandarin might heave a great pile of research and policy papers from institutions like the IMF, the World Bank, and OECD onto the desk of Minister Chidley.

Already, Minister Chidley will see that a troubling pattern is emerging. At one level, we see the slowing and transformation of globalization. At another, the end of a very long economic cycle is in sight. There is also a sense of exhaustion, not merely on the part of households and businesses but also on the part of policy makers, especially central banks, who have gone to extraordinary lengths to sustain growth and prevent a deep recession (and who are now confronted by high inflation). This exhaustion may be attributable to the fact that at no point since the late 1990s has there been a full-scale reckoning or  clearing out of the imbalances in the world economic system.

Having listened to this long tale of lower growth, the economic handbrakes of demographics, and lower productivity, Minister Chidley is thoroughly depressed and wishes she had been made a minister of defense instead. Tackling low growth and its consequences will be demanding.

She has two, perhaps three, options. First, worried that there seems to be very little public acceptance that the future could be less rosy than  the past, she asks her mandarin for a quick fix, an economic magic pill.  An infrastructure program like Boston’s Big Dig might fit the bill. A second option is economic nationalism. With the level of growth likely to be lower than it has in the past twenty years, she might take to megaphone politics, point to growing competing economies and tell her voters that she will take back the growth that is theirs.

Third, and the difficult solution practically and politically, she might ask what drives national development and stability in the long term and set about creating a framework to implement those drivers. She is drawn to the idea of country strength, which relies on nations’ developing a policy mind-set that cultivates economic resilience and that invests in intangible infrastructure (education, an inclusive society, research/development, institutional excellence).

Katherine Chidley, and the economic vision that she developed, which I set our four years ago is the anti-thesis of Liz Truss. The only remaining question is how much chaos the Tories must visit upon themselves and their country, until a Chidley character takes the political stage.

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