The Tory Crisis Didn’t Start With Liz Truss and It Won’t End With Her

It’s often said that the Conservatives are one of the most successful political parties in the world. Right now, it’s hard to see why.

Dominic Cummings warned a Truss premiership would be a “guaranteed fiasco”. Little could have prepared us for how correct he would be. Co-authors of Britannia Unchained and advocates for the party’s libertarian streak, Truss and her chancellor Kwasi Kwarteng’s attempt to deepen the Thatcherite counter-revolution failed miserably. Their mini-budget, consisting of tax cuts and headlined by the energy price freeze, created a mess in the markets that Jeremy Hunt, architect of the NHS’s collapse, was enlisted to clean up. Hunt undid the mini-budget, reversing tax cuts and limiting the energy price freeze to April. He now stands beside a new PM, Rishi Sunak. This story doesn’t begin with Truss, however, but with the Conservative party itself.

A deep rot.

The Tories, seen as the party of order, are the political instrument through which the interests of Britain’s capitalist elites have been best represented for well over a century. Yet these interests are by no means uniform. Capitalists – for whom “competition becomes a fight among hostile brothers”, as Karl Marx put it – have different and often competing interests. For capitalism to survive, particularly in nation-state form, a “collective capitalist” is required to put the interests of capitalism as a whole above those of the individual profiteer.

The Tories have been adept at constructing the “collective capitalist” ever since the days it transformed itself from the party of aristocrats into the party of capital. However, the neoliberal era has eroded the party’s capacity to manage capitalism. For while Margaret Thatcher broke the labour movement, destroyed the welfare state and reconstituted class rule in the interests of finance, real estate and the FTSE 100, she also eroded the associational cultures on which her party relied – among them, the networks of elite clubs that provided the local basis for working-class identification with Toryism.

Today’s Conservatives, as Richard Seymour argues, more closely resemble a “middle-class protest party” made up of “professionals, middle managers, supervisors [and] business owners” who, whilst not necessarily income-rich, often find themselves insulated from the economic and political crises that affect the majority of the population. This is in part because the vast majority of the Tory membership consists of asset-rich homeowners of pension age. who​​ have, perhaps until this past year of high inflation and increasing interest rates, remained “a) materially invested in the system, b) relatively protected, and c) in relative decline.” No wonder then that, as the prophet of Tory decline Phil Burton-Cartledge contends, this predominantly retired cohort of Tory members, shorn from the collectivities and oppressions of the labour market and afforded a certain degree of privatised freedom and leisure, is hostile towards the “woke”, socialist and apparently fiscally imprudent.

Second, the national elite the Tories represent has drastically changed. The national capitalism of post-imperial Britain has been superseded by a globalised capitalism, whose elite is far less internally coherent, lacks forms of collective association, and is much more international in character. Whilst it’s true that graduates of Oxbridge and Eton remain disproportionate among Tory cabinet members, a shrinking minority of current Tory MPs attended these conventional elite institutions. Since the 1980s, the Tories have stopped representing anything resembling the country’s once compact, cohesive, national bourgeoisie. Similarly, as Duncan Thomas has argued, “where this elite intersects directly with the Conservative party, it is no longer as captains of industry, but as representatives of those sections of capital least suited to taking any kind of broad strategic view” – namely financial capital, the third reason for the Tories’ decline.

If a concern of state managers has always been that capitalists alone are incapable of a long-term view, this is even truer for financial capitalists, whose day-to-day activities consist of what Thomas describes as “fomenting in constant, chaotic change” such as “mergers, downsizing, the immediate maximisation of shareholder value, takeovers, and restructures”. The 2019 revelation that the lion’s share of donors to the Conservative party came from finance – £18m of this from just five hedge-fund backers – only adds to this story of Tory short-termism.

A fourth factor in Tory decline concerns changes within the state itself. As the late Neil Davidson has detailed, while the elected political wing of state managers has become increasingly depoliticised – such as Gordon Brown’s granting independence to the unelected Bank of England – so too has the unelected, non-political wing of the government – the civil service – become increasingly politicised. Over time, the corporate takeover of the civil service throughout the neoliberal period has gone hand-in-hand with the diminishing gap between the two major parties, enabling the state bureaucracy to furnish itself as an extension of the party in power.

Last but not least, these dynamics have implications for the relationship between the state and its subjects. Whilst the depoliticisation of the electorate and atrophying of civil society, were facts of life before 2008, this has been less and less true over the past decade. The Scottish independence and Brexit referenda, Corbynism and the recent surge in trade unionism all typify a world that this out-of-touch caste of professional politicians is ill-equipped to deal with. The Tory party – or Labour for that matter – can claim vanishingly few cadres able to ride out this crisis, let alone reinvent capitalism to deal with it.

Taken together these developments begin to build a picture of why the Tories are, in James C Scott’s words, unable to “see like a state”. Torn between their politically revanchist membership and their distorted capacity to act as a “collective capitalist”, Conservatism is and has long been in disarray. The defeat of Trussonomics was simply the latest, most disastrous episode.

Trussonomics versus the markets.

Truss and Kwarteng entered office remarkably isolated: narrowly victorious amongst the Tory membership, disliked by the parliamentary party, distrusted by the Treasury and Bank of England. Somehow, this did not dampen their resolve. Quickly rolling out the mini-budget without consulting the Office for Budget Responsibility, sacking Treasury chief Tom Scholar and doing little of the legwork to prepare for their economic agenda, Trussonomics was already dead in the water.

Trussonomics wasn’t some kind of elite vanguardism, but rather a “hauntology”: incapable of escaping history, it was a deferral to models of past Tory glory, in particular Thatcher’s “heroic years”. At their core, hauntologies symbolise the absence of strategy – an absence made clear by the markets when they exercised one of the biggest displays of raw class power in recent history. Neoliberal gatekeepers, such as Andrew Bailey and the Bank of England, showed in practice the difference between pure neoliberalism as an unmoored ideology and the financial power of a neoliberal system whose interest in the stability and maintenance of its legal, economic and political dominance trumps all.

Within hours of the mini-budget, speculators and currency traders were offloading the pound, sceptical of how unfunded tax cuts could be paid for by borrowing in this daunting economic situation. This dynamic caused borrowing rates to rocket, threatening the solvency of pension funds and eventually providing the Bank of England the means with which to throw the gauntlet down to the government. As James Meadway has argued, in threatening the withdrawal of its bond-buying support programme – which it claimed was the difference between pension funds paying out or not – the Bank of England broke the government. 10 days later, Trussonomics was ditched and Hunt installed to restore neoliberal order.

Although the sheer scale of financial power weighed against Truss and Kwarteng should scare even the tamest social democrats, Hunt – and his “economic advisory council” of unelected capitalist heavyweights – haven’t seen off the crisis yet. Sunak, who acknowledged in his closed-doors inauguration speech that the Tories face an “existential crisis”, will initiate another miserable period of phased-in austerity in a bid to repair Britain’s credibility with the global financial order. This will find opposition in many places, not least the 2019 cohort of Tory MPs who won their seats off the back of Boris Johnson’s “leveling up” ticket.

The British state is sclerotic, dysfunctional and in collapse. The NHS, schools, local authorities and all remaining welfare services have been slashed beyond breaking point. The social crisis tearing through the working classes of this country is of a scale unseen in our lifetimes. Packed-out food banks, in-work poverty, unpaid energy bills – in this context, austerity will be deeply unpopular, risking confrontation with large swathes of the population, not least a resurgent trade union movement. Perhaps there are some sections of the Tory party happy to do capital’s bidding in full recognition that it will cost the Conservative’s the next election and enable the electoral victory of a capital-friendly Keir Starmer government.

For now, one wing of unelected state managers and their friends in the global neoliberal order has essentially imposed the direct, unelected rule of capital in a bid to stymie the continued failings of the elected, political wing of state managers. Sunak and Hunt, the men installed to enact the will of the markets, will do so enthusiastically. Alongside dissent among the general population, these new “market disciplinarians” will face other problems as well though. Truss and Kwarteng made the fatal mistake of pursuing policies that hurt the party’s own base by provoking interest rate rises and jeopardising the “upward trajectory of the housing market”. This is in no small part a reason behind their recent electoral collapse. These issues will not abate, with one poll conducted on 20 October putting the Tories 39% behind Labour. Many Conservative MPs dread losing their seats and prefer a dose of damage limitation which doesn’t involve cuts. Although the austerians will be reluctant to entertain such panicking, it will certainly cause them further headaches.

Faced with solving the problems posed by a nation in decline, running on a low-growth, low-productivity, low-wage economic engine, the prospects for Toryism appear grim. From the top, right through to the very sinews of the superstructure and down to its base, the crisis is existential. For the party of order, the bottom line is that the state, as currently occupied by the Tories, is incapable of organising a power bloc with the potential to renew British capitalism. As these ‘market disciplinarians’ do their utmost to directly preserve ruling class domination, the question is: can anyone else?

Things can only get better?

In all likelihood, there won’t be a general election until the Tories are constitutionally obliged to hold one. However, nothing is guaranteed. Given the clear public desire for an election and the dictatorial intuitions of the current government, the left should not refrain from calling for one. These desires represent a yearning to kick the Tories out of power, and if current polling is anything to go by, they show a clear opportunity to inflict an almighty blow on the conventional party of British capitalism.

Whilst radicals should embrace the call for an election based on the political space it may afford, there should be no illusions about a Starmer government. The fact the Labour party is now a safe, reliable pair of hands for both capital and empire is surely weighed into the market disciplinarians’ bullishness. Labour’s “sound money” green growth agenda may be an improvement on what the Tories are offering, but it will face massive fiscal constraints, and Starmer – the ruthless friend of the British state that he is – will gladly accede to the markets.

In this environment, the left should refound itself as a project independent from both parties, organising for radical wealth redistribution, planetary climate justice and working-class sovereignty. After 40 years of neoliberalism, it’s unclear what it will take for the Tories to rebuild themselves as a party capable of revitalising British capitalism. Between the uptick in trade unionism, the rise of campaigns such as Don’t Pay and Enough is Enough and the militancy of climate activists, we should ask ourselves how our side can build a competing power bloc, one capable of liberating the working class.