Sunday 23 October 2016

Theresa May and Thatcherism

There is a touch of confusion about Theresa May's political posturing. The apparent lurch "to the left" signified by her abandonment of Osbornomics (and, of course, Osborne himself) for soft Keynesianism sits uneasily with a commitment to hard Brexit. The homage paid to official anti-racism is at odds with her immigrant bashing. And her fabled competence, her "no Flash, just Gordon" schtick looks ridiculous when she puts off key decisions, slaps down cabinet divisions, and every time one recalls the three fools she's placed in charge of Brexit. Is May riddled with contradictions? Yes, but the answer doesn't lie in character flaws. One has to look to the nature of her political project, the class relationships underpinning it, and the economic and political crisis engulfing British capital and the British state.

We've talked about Thatcherism and the settlement she imposed after the class battles of the 1980s on many occasions. As British capitalism was gripped by periodic crisis in the 70s, the old social democratic levers of managing economic turbulence couldn't stand up to the winds howling through the global economy. Britain, like other advanced nations, faced the puzzle of stagflation - of rising unemployment and rising prices. According to received wisdom, if you cut incomes then prices would fall. Likewise, if wages rise prices go up. Capitalism wasn't behaving properly. More seriously from the standpoint of British capital, the post-war consensus of state intervention, nationalised industry, and mass workplaces had concentrated large numbers of working people in close proximity. It meant that once the oil shock and Vietnam kickstarted inflation and workers fought to maintain their living standards, the spectre of trade union militancy threatened to cripple strategic industry and render government powerless. As the experience of Ted Heath, and the unhappy relationship between Wilson and Callaghan's governments had with our movement demonstrated, British capital had grounds for concern.

Thatcher captured the Conservative Party for the then radical right. Economically, they sought to restore the sovereignty of capital over the economy by curbing working class power first and then going for the institutional props of the post-war consensus. That was the aim, though - contrary to popular belief - Thatcher and friends didn't have a carefully crafted plan. Her new commonsense only became so through her attacks and victories against organised labour, aided by a slavish, cheer-leading press and an array of think tanks and campaigning organisations that either lent her intellectual credibility or softened up the ideological ground for her market fundamentalism and Victorian morality. Only in retrospect does Thatcherism look inevitable, its precepts obvious when, in fact, they were conjunctural adaptations to struggle. She and her government could have been defeated on a number of occasions. If only it wasn't for the SDP split. The Falklands War. The blunders of the Miners' Strike. Things could have turned out much differently.

As we know, Thatcher won. But what exactly won? Thatcherism promised to make Britain great again, words similar to those we find echoed today in the land over the sea. The last hurrah for the British empire over a sheep-worried rock in the south Atlantic was a personal triumph for Thatcher, and gave her licence to wrap herself in the flag whenever she felt like it. She broke the labour movement and shackled it with the most repressive labour relations legislation seen in an advanced liberal democracy. Resources were poured into beefing up the police, the military, and the surveillance state - strangely, the one part of government no neoliberal ever wants to shrink. The city was deregulated, the nationalised industries shut or privatised, council housing flogged off, and communities full of our people left to rot. The economy boomed and enough of the boats floated upwards - some rising much faster than others as the trend to greater inequality reasserted itself. Yet Thatcher did not solve the crisis afflicting British capital, it was merely postponed. Her asset and credit powered boom turned into a bust. By the time her memory was warming the cockles of Tory hearts made bitter by the Major years, the economy took off again. Yet under Blair and right up to the 2008 crash, the character of British growth followed the pattern established by Thatcher. Sell off state assets and/or use public monies to create artificial markets. Continue subsidising the rich with low corporation tax and top income tax rates. Kowtow to the socially useless but GDP-useful city slickers. Keep house prices going and throw credit around like confetti. Meanwhile the gutting of the real economy continued apace. Neoliberalism was the commonsense, Thatcher's settlement was preserved. Despite some welcome reforms, it was business as usual.

The structural weaknesses of the British economy were thrown open to scrutiny by the crash. From the standpoint of capital, these were the overdependence on financial and service-based industries and precious little manufacturing, the stark imbalance between the south east and the rest, short-termism, the balance of payments vis a vis the rest of the world and, for some, the dependence of regional economies on public sector subsidy. The Tory answer was to blame Labour spending for the crash, and identify closing the deficit between what the government receives and what it spends as the chief task of our time. This very simple narrative, dutifully broadcast parroted by helpful editorial offices, got traction and dominated British politics between 2010 and 2015, and helped the Tories into power. The rhetoric therefore became about rebalancing the economy. Osborne had his policy train sets in the Northern Powerhouse and Midlands Engine, and HS2 was approved with a view to spreading London's prosperity about. Low paid workers were taken out of tax, the public sector shrunk further allowing private providers to miraculously fill in social provision they were previously "crowded out from", and so on. I'm sure readers don't need me to dwell on the last five or so years of failure. Time and again, short-term political interests trumped the long-term health of British capitalism. In the truest sense Dave and Osborne were Thatcher's sons. They destroyed institutional props, gutted local government and social security, privatised whatever they could get away with, and believed that people should make their own way through the mess they made. After all, the market is the be-all and end-all and can organise everything much better than anything else. Far from addressing British economic weakness, they too exacerbated it. Though were happy to hide behind GDP figures and underemployment dressed up as record employment.

To speak of May as continuity Thatcherism seems, at first glance, a bit daft. Her economic platform, such as it is, communes more with the spirit of Keynes. Your Friedmans and von Hayeks are now banished to purgatory. Leaving aside the anti-immigrant nonsense for a moment, on face value it appears to be a programme more in tune with addressing the structural problems of British capitalism. A break with neoliberalism and Thatcherism, then? Yes, and no. Certainly on the overt level of economic management it is. Mouthing one nation rhetoric is one thing, but using it as a basis to inform policy is definitely something Thatcher never did. On the surface, the philosophical objection to state intervention has slung its hook and a full appropriation of Ed Miliband Thought affected. On the other hand, it's not. Neoliberalism is more than an economic perspective, an ideology, a technique. It is a way of being, a mode of subjection, a method of creating human beings of a certain type. At this level, the rational, entrepreneurial, acquisitive, self-interest and self-reliant individual is as much part of May's programme as it was for Blair and Brown, for Dave, Major, and Thatcher (as well as, whisper it, Miliband's). Her cod talk of equality and meritocracy is entirely within the envelope of neoliberal governance. In this respect, it's a continuation, not a repudiation of Thatcherism.

Yet there are those stubborn inconsistencies. How can May see "sense" when it comes to a pro-active, state managed economic strategy and burgeoning inequality, but risk angering business over immigration controls and hard Brexit? It's because, like Thatcher's time in power, hers is a class project. Ultimately, Thatcherism wasn't about fixing the economics of British capitalism. That was a secondary concern. Instead, the objective was the smashing and subordination of the labour movement, of rebalancing the tilt of class relations firmly to the right. The anti-trade union agitation and legislation, state authoritarianism, the scapegoating of minorities, the flag waving, the traditional values, all were moments and supports for Thatcher's project. And it succeeded. This new post-social democratic balance of class forces remained the case throughout the Major years. It wasn't upended by Blair and Brown. Indeed, they were obsequious in preserving this state of affairs. The class relations underpinning capital's dominance were, interestingly, most threatened by Dave. His Tory party grew decadent from the standpoint of his class not just because his motley crew took decisions dysfunctional for British capitalism, but also from the point of view of the maintenance of these class relationships. Letting inequality get out of control, jeopardising the integrity of the British state for incredibly low returns, allowing a hard right party grow legs, and pursuing incredibly narrow, sectional policies so the traditional B team of British capitalism falls to the left and is in the process of becoming something else. In short, Dave's cluelessness and negligence put the Thatcherite class settlement under threat.

Now May's incoherence starts making sense. She's putting the band back together. While the support of British business is unlikely to go anywhere, she can have another go at rebuilding the Thatcherite coalition underpinning the right wing balance of class forces. So the anti-Labour sections of the working class who've had their heads turned by UKIP, and the right leaning sections of small business and the managerial middle class. What they crave is the stability and security of a firm hand. The politics of May's economics is protecting them from the headwinds of global competition, while giving their children a route to a more stable life free of housing and job worries. The crackdown on immigration is to show she's doing something not just about the competition and resource pressures from increasing numbers of migrant workers (exacerbated by the government's scrapping of the Migrant Impact Fund to begin with - some might say deliberately and with these consequences in mind), but also to ease those troubled by the appearance of Polski Skleps, the sounds of strange languages down the town centre, and the very idea people are coming over here and stealing our jobs and sponging off social security simultaneously.

Following the ideas of Stuart Hall, for whom Thatcherism was a hegemonic project that prosecuted class struggle economically, politically, and ideologically, May's project falls short. It's a patching up operation doing what it needs to do to ensure the balance of class forces remains on the right. While it can rely on the media to carry on carrying on churning out the anti-working class, anti-migrant, anti-socialist - especially now it has a lightning rod in the shape of Jeremy Corbyn - her political project could so easily come unstuck. While she affects as a competent, authoritarian figure, during her first 100 days in office May has demonstrated a pronounced tendency to dither, delay, and duck out when things get tough. Qualities one does not associate with competence and getting things done, so perhaps it's accurate to describer her emergent doctrine as 'May-beism'. The second is Tory disunity. When Johnson, Davis, and disgraced trade minister Liam Fox aren't publicly scrapping in the press, it's briefing against Philip Hammond. And, on his part, briefings against hard Brexit fanatics in the Cabinet. Compounding that are europhobic back benchers who think the complexity of withdrawing from a bloc we're economically integrated into is a case of backsliding political silly buggers. And then there are those defenestrated Cameroons like Nicky Morgan and Anna Soubry happy to make known their unhappiness. The third is the politics of managing Brexit, of having a strategy, rolling with the punches, striking a deal (or a transitional deal), and everything that comes with it.

And fourth is the future of the Conservative Party as a viable caretaker of the Thatcherite class settlement. Triangulating to win back the sorts of constituencies Thatcher had in her handbag is one thing. But holding onto those who quite liked Dave's Notting Hill Toryism is another. More difficult is the party's demographic time bomb. The media weaponry arranged in defence of the settlement is growing less effective. The age ranges who lap it up are disproportionately middle aged to elderly. They're the ones most likely to vote, of course, but they're not going to be around forever. A generation is rising that is at the sharp end of inequality, debt, and insecurity. They're socially liberal and hate the idea that Brexit is going to rob them of even more opportunities, the rights and the perks those older voters have denied them. Their displeasure is taking on flesh in the Labour Party and SNP, and to a lesser extent the Greens and LibDems.

Winning over this hard-pressed but socially liberal generation of networked workers is a tough ask for the Tory party, and especially Theresa May's project as constituted. Hence why hers can only be a holding operation. It can win back the kippery and chauvinist sections of the working class, middle class, and small business by peddling the politics of the past, thereby possibly securing elections wins in the near future. Beyond that, as attitude survey after attitude survey show, all three of these constituencies are in historic decline. Winning the future is beyond May's politics and, possibly, the Thatcherite settlement itself. It is therefore down to us - the labour movement, the left, everyone who supports socialist and progressive politics - to define that future and make it ours. Because if we don't, someone else will.


Boffy said...


I agree with most of your account of the Thatcher years and after. I have written the same accounts many times myself. However, there is one aspect of the standard history of the time and which you repeat, I have come to reject. It is the idea that in the 1970's, capitalism had come to an impasse that social democracy could not resolve, that the stalemate in the class struggle had to be resolved in the interest of capital, and that this task fell to Thatcher.

The implication behind this logic is either that politics is driven by conspiracy, or else it was Thatcher or some kind of fascist coup. Either, capital is able to simply choose which governments are elected to best fit its purpose at any one time - an idea sometimes hinted at by Lenin who really didn't understand western democracy - or else the election of Thatcher in 1979 and after was just a fortunate circumstance for capital, and that had the electorate not acted to meet the needs of capital, it would have had to resort to a non-democratic solution, as happened in Germany in the 1930's, or Chile in 1973 etc.

But, the reality is that Thatcher won in 1979, not because capital was able to choose what government was in office to serve its needs, but because a large enough proportion of workers didn't vote Labour. As often stated, had callaghan called the election in 1978, things would probably have been different. Thatcher looked likely to lose badly to a Foot led Labour Party during all the time from 1980, to the Falklands War. Thatcher was under pressure, from the "Wets", even into the mid 80's to abandon the Austrian economics, that was failing, and to go back to Keynesian intervention.

What is right in the standard model is that given the economic conjuncture, social democracy could not keep its side of the bargain. But it was its bargain with the working-class not capital that it could not keep. The bargain required workers to accept the continuation of capitalist exploitation in return for annual improvements in their standard of living. Yet even that is not quite true.

Social democracy could have kept its side of the bargain had it been prepared to fulfil its historic role consistently. That would have required it not to have attacked "capital" as the standard model claimed, but had it been prepared to attack the continued power of those sections of capital that the Tories represent, i.e. the owners of fictitious capital, the large owners of shares, bonds and property.

But, it would also have required a further extension of the social-democratic restructuring, regulation and planning of capital that had proceeded since WWII, and whose basis had also been envisioned in the 1930's by people like MacMillan, now referenced by May.

It would have required the two wings of Labour to have been combined. In other words, had the supporters of the AES abandoned their nationalism, and pushed forward with the support for an expansion of an internationalist policy based upon the EEC, not only would the SDP split have been avoided, but a model for meeting the needs of workers via a continued expansion of industrial capital on a more rational basis would have been laid.

The basic ideas already existed. Germany already had aspects of industrial democracy, (resurrected by May), Wilson set up the Bullock Commission, the EU put forward new draft rules etc. A failure to press forward on these measures, enabled the owners of fictitious capital to continue to exercise power in the boardroom, and to drain resources from investment to pay interest. Money was printed to keep asset prices inflated, which led to stagflation. Workers then found no reason to vote Labour or Democrat in the US, and governments reflecting the interests of the owners of those financial assets were then elected. In fact, those governments acted against the long-term interests of real capital.

Boffy said...

There is an interesting post on the Co-op Party's website today. It doesn't go far enough, but it recognises that where in the 1970's dividends accounted for 10% of company profits, today they amount to a whopping 70%, as I have discussed before.

No wonder growth is sluggish, and the potential for growing profits out of which those dividends could be paid has been restricted.

It rightly challenges the misconception that shareholders are the owners of companies, whereas in fact, they are only the lenders of money-capital to the company, no different than a bondholder, or a bank that gives a loan to the company.

But, precisely for that reason, there is no reason that shareholders should have any right to control company boards, and thereby dictate company policies. Company boards should be wholly elected by the workers in the company, including the salaried day to day managers.

The social-democratic policies of the 1970's, for example set out in the Bullock Report went half way to that, but now its time to push for a rational industrial democracy alongside a rational completion of the bourgeois democratic revolution.

That is a necessary transitional stage on the road to socialism and the co-operative commonwealth.

Igor Belanov said...

"The social-democratic policies of the 1970's, for example set out in the Bullock Report went half way to that"

The proposals of the Bullock Report were hardly social-democratic, and nowhere near industrial democracy.

They resembled the push for public 'participation' in state activities (for example local government) that effectively sought to tie disruptive citizen's movements (in the Bullock Report's case trade unions) into the existing institutional structure and give them more of the responsibility for what was effectively maintaining the status quo. Worker representation in countries like Germany was in effect a conservative move, whatever slight benefits it might have brought workforces.

Anonymous said...

Thank you for your optimism, Phil.

When I look at my family & acquaintances, I see non-voting Brandites, Daily Heil brexiters, libertarian totalitarians, anti-virtue-signaller crusaders, /b/ sexists, and anti-intellectuals. All my generation (20 - 30).

If it wasn't for people like you, I'd have given up hope.

Boffy said...

"They resembled the push for public 'participation' in state activities (for example local government) that effectively sought to tie disruptive citizen's movements (in the Bullock Report's case trade unions) into the existing institutional structure and give them more of the responsibility for what was effectively maintaining the status quo."

That is exactly what social-democracy is!

As Marx put it,

"“The peculiar character of social-democracy is epitomized in the fact that democratic-republican institutions are demanded as a means, not of doing away with two extremes, capital and wage labour, but of weakening their antagonism and transforming it into harmony. However different the means proposed for the attainment of this end may be, however much it may be trimmed with more or less revolutionary notions, the content remains the same. This content is the transformation of society in a democratic way, but a transformation within the bounds of the petty bourgeoisie."

Lidl_Janus said...

Anonymous, it depends on where you are and what your sample size is. There are always some people who go against the grain of what demographics would 'expect' them to do. Consider, for example, that by November 8th there will have been thousands (although probably not millions) of African-Americans who voted for Trump.

Blissex said...

«The city was deregulated, the nationalised industries shut or privatised, council housing flogged off, and communities full of our people left to rot. The economy boomed and enough of the boats floated upwards»

Written like this it seems that the argument is that thatcherism did lead to a booming economy. But the economy boomed because oil prices moderated as both scottish and alaskan oil come into production, and the revenue and export earnings from scottish oil financed thatcherism:

Jim Rogers, a hedge fund speculator, in "Street smarts" wrote:
«The city was deregulated, the nationalised industries shut or privatised, council housing flogged off, and communities full of our people left to rot. The economy boomed and enough of the boats floated upwards»

Written like this it seems that the argument is that thatcherism did lead to a booming economy. But the economy boomed because oil prices moderated as both scottish and alaskan oil come into production, and the revenue and export earnings from scottish oil financed thatcherism:

Jim Rogers, a hedge fund speculator, in "Street smarts" wrote:
«Margaret Thatcher, elected in 1979, takes credit for the eventual British turnaround. And she is responsible for many positive changes. But the fact is that 1979 was also the year that North Sea oil started flowing. You find me an elephant oil field and I will show you a very good time, too.»

And Tony Blair wrote in the LRB in 1987:
««Mrs Thatcher has enjoyed two advantages over any other post-war premier. First, her arrival in Downing Street coincided with North Sea oil. The importance of this windfall to the Government’s political survival is incalculable.
It has brought almost 70 billion pounds into the Treasury coffers since 1979, which is roughly equivalent to sevenpence on the standard rate of income tax for every year of Tory government. Without oil and asset sales, which themselves have totalled over £30 billion, Britain under the Tories could not have enjoyed tax cuts, nor could the Government have funded its commitments on public spending.
More critical has been the balance-of-payments effect of oil. The economy has been growing under the impetus of a consumer boom that would have made Lord Barber blush.»
«The fact that we have failed to use oil to build a productive and modern industry for the future is something historians will deplore.»

This said, thatcherism did have some positive effects on the economy, mostly the reduction in trade union excesses, which it pains me to write, especially as it turned into an anti-trade-union stragegy rather than one against the excesses of some of them. Even today there is an unresolved tension between the power of trade unions in critical services and the interests of all workers.

Blissex said...

«in the 1970's dividends accounted for 10% of company profits, today they amount to a whopping 70%, [ ... ] It rightly challenges the misconception that shareholders are the owners of companies,»

The aim to distribute more earnings as dividends is in part (and perhaps largely) due to pensioners: existing "final salary" pension funds put a lot of pressure on boards to raise dividends out of which to pay pensions, and even individual "money purchase" pension savers tend to go for "income" based funds.

johnny conspiranoid said...

The mid seventies stagflation. Isn't that when credit cards started to appear? A sudden increase in consumer debt allows inflation without wage increases. Of course all parties kow tow to the interests of the lending banks.