Liz Truss' recent signalling of her ultra neoliberal intentions crashed the UK economy, sending the value of the pound plummeting and wiping almost £65 billion off UK pension funds (had it not been for the Bank of England stepping in to buy up UK bonds)... clearly the global markets didn't like the sound of these policies!
So does this maybe mean the end of neoliberalism....?
It's a working theory I've got...
I mean we've had 40 years now of extractive policies in which various public sector services have gradually been privatised with tax payers money steadily being siphoned off to the private sector through public private partnerships and think about what this means...
Corporations have got used to working with the British State in partnership on very long term contracts to provide stripped down services for a profit and the markets know this.
In other words, Britain is set up for long-term profit extraction and the state is a central actor which enables this (think of the gradual privatisation of education and the health service)... Corporations need the state to keep those contracts in place, and corporations need the state to maintain a certain level of tax revenue to be able to maintain its role as the taker of people's taxes and hander of these taxes to the corporations.
This is a system which works very nicely in a high GDP/ high income/ high tax country like the U.K.
But what Liz Truss has just offered the markets is a slash and burn package which cuts taxes and puts this model at risk.
Sure we can cut taxes and deregulate and the private sector will have a field day for a few years, maybe a decade, but then the party's over, Britain's fully extracted, people are much poorer, the state reduced drastically in size, and we've got basket case Britain.
But then what..? Where next to extract from?
I mean there are options... India, South America, Africa...?
But there are also radical uncertainties - what with the climate crisis, pandemics, zealot-wars.... from a purely risk-management perspective you simply cannot guarantee being able to move into another part of the world to extract from if you're a massive corporation.
So maybe the markets are saying 'if it ain't broke don't fix it' or 'this current balance of taxation and regulation is working' - in other words maybe this is as good as it gets, the markets don't want change in these current uncertain times!