MISREADING BREXIT:

Truss correctly diagnosed the root of Britain's problems--two decades of anaemic growth and a productivity crisis caused by structural issues crippling our economy. With a refreshing intellectual honesty and political conviction that has become rare in Britain, she entered office laser-focused on unlocking growth. She planned ambitious supply-side reforms to incentivise enterprise through the tax system, abandoning our national preoccupation with redistribution. She also intended to overhaul burdensome regulation in housing and childcare, areas she had explored for years as an advocate of freedom courted by think tanks in the UK and USA. 

These were good ideas, yet she made monumental unforced errors, including her failure to "roll the pitch" to ensure that voters, the media, her party, and financial markets were sufficiently briefed on her policies. She did the right things in the wrong order, announcing tax cuts and spending increases before any of the reforms or budget cuts needed to fund them. Coinciding with rising interest rates globally, her policies and subsequent lack of leadership and poor communication made her position untenable.

Critics of Truss were gleeful in celebrating her downfall, claiming the "free-market libertarian experiment" has now been discredited for a generation and comparing it to failed ideologies like communism. This is a wilfully dishonest attempt to reframe what happened and what free marketeers believe. In her 50 days in office, Truss did not have the chance to implement anything remotely libertarian. Her signature policy was a huge unfunded and untargeted intervention in the energy market that capped consumer bills for two years. Free-market economists counseled against this. Totally uncosted but estimated at £150bn, it seems more likely that it was this policy that spooked financial markets rather than the proposed £45bn of tax cuts that never made it to Parliament.

The UK is facing a lost generation of growth. Poland, a country whose young used to come to Britain in search of prosperity, is projected to overtake us in economic output by 2030. Average household incomes (£37,000) are lower than in every American state. This year real-term wages are expected to hit 2006 levels while the tax system discourages hard work through marginal tax rates that exceed 70%. There is fear of a "brain drain" with increasing numbers of young people making enquiries about moving abroad in despair at a lack of opportunities, declining living standards, and an ever-rising tax burden. Truss made mistakes, but those celebrating the return of "the adults in the room" must accept that they have been in charge for decades and their tax-and-spend orthodoxy has resulted in managed decline.

Americans and Brits alike should be careful not to learn the wrong lessons from the Truss premiership. Those who value freedom will reflect on its missed potential to prioritise economic growth, reduce the size of government, and promote choice and competition for citizens. The current situation was in no way inevitable and stems more from political naivety and incompetence than poor policy. Truss capitulated to her own party as well as the media, despite most of her tax cuts being popular with the public and business. She performed her first U-turn within weeks of taking office and from then on, her backbenchers knew that with enough pressure they could dilute or reverse her attempts at reform. The same is true of her successor. Truss asked us to take risks but was unable to assure the public and markets. Britain is now doing the opposite of what Truss intended, with Sunak leading us to further decline.

The Conservatives should not assume that there is no demand from voters for a pro-liberty, pro-enterprise agenda.

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