History Repeating As Farce - Part 1

“Hegel remarks somewhere that all great world-historic facts and personages appear, so to speak, twice. He forgot to add: the first time as tragedy, the second time as farce.”

Marx – The Eighteenth Brumaire of Louis Bonaparte.

Thatcher, the Grammar School educated, shopkeeper's daughter, desperate for the support of millionaires; Cameron, the Eton educated millionaire, desperate for the support of shopkeepers. Thatcher, declaring a war in the Falklands, she had not really intended to wage; Cameron intending to wage a War against Libya, but declaring he was waging anything other than War. Thatcher undermining the fascists by shooting their Immigration fox; Cameron lining up with the fascists and loonies across Europe and undermining himself. Thatcher, the Iron Maiden, mugging the Europeans for Britain's Rebate, before walking away with the loot; Cameron flouncing out of the room, like a Maiden whose honour has been besmirched, without even bothering to find out what price would be placed on her virtue. Thatcher waging open war against “Red Ken”, to prevent any challenge to the central authority of the State; Cameron waging a covert war with “Blonde Boris”, to protect his own authority within the Tory Party. Thatcher slapping around the “Wets”, known as vegetables; Cameron slapping around Nick Clegg like a wet lettuce. Thatcher unleashing the mass of the State to defeat the Miners; Cameron unleashing the mass of Eric Pickles to defeat the Local Government workers.

In the 1980's Thatcher smashed the working class and introduced austerity, which, was the only solution available for Capital, given the economic conditions. Cameron seeks to mirror Thatcher in different economic conditions. But, there are big differences. In the early 1980's, workers had experienced 30 years of economic boom. During, the 1950's, they began to recover from the devastation that had been wrought on them during the 1930's, and the period of War. Their living standards rose, including those elements of the Social Wage, such as better education, which Capital needed to meet its requirements for more technological production. Things, such as home ownership, began to be taken up by workers, who, until then, had only known renting, as a means of meeting their housing needs. It had begun during the 1930's, when workers, experienced rising wages, in new developing industries, in the Midlands and South-East,, and when new building techniques reduced the cost of housing. The introduction of labour-saving consumer durables, in the home, freed up female labour, to meet the growing demands of capital, for an increased labour supply.

Workers found that they could win higher pay, as employers were more than able to pay, in a growing economy, and as the principles of Fordism spread. Large employers effectively entered into a compact with workers, whereby they would ensure that real wages rose, year on year, linked to rises in productivity, in compensation for the workers enduring the tedium of mass production assembly lines, which generated those rises in productivity. The ability to obtain such pay rises, gave confidence to build new Trade Union organisation at a plant level, creating a new force in the shape of the power of the shop stewards, as workers found they could simply down tools rather than wait for full-time union officials to intervene, and often derail their struggle. It created an increasingly reformist consciousness, which was manifest in an increased level of support for Left leaning Trade Union and Labour leaders, as well as for, what were essentially, syndicalist political groups such as the International Socialists. This was both the strength and the weakness of working-class development during the period. Strength in that it saw a rebuilding of rank and file working-class organisation, weakness in that it was diverted into these dead-end political solutions. Just how dead end those solutions were was demonstrated when the conditions that created them disappeared, when the Long Wave Boom ended.

When the Boom began to falter, in the late 60's, Capital began to respond. It was no longer able to so easily accommodate workers' demands. Not only was productivity and profitability falling, but the ability of the State to accommodate the requirements of the other part of wages, the Social Wage, was declining too. It was no longer necessarily in the majority of large employers' interests to agree to pay increases or other improvements, and they began to resist, resulting in strikes becoming more prolonged. The Labour Government also attempted to intervene by introducing anti union legislation in the form of “In Place Of Strife”, but the workers were still too strong, and able through the unions link with Labour to defeat it.

As the Boom turned to recession Governments sought, during the 1970's, to utilise the economic orthodoxy, which from 1949 had successfully cut short every previous recession. But, under the new conditions, that could not work, and instead it only resulted in rising inflation, and then stagflation. So long as employers could respond to rising Money Supply by conceding to wage rises, in the knowledge that the increased cost could be passed on in higher prices, this spiral would continue, and no real solution to the problem of Capitalist profitability could be found. Cuts in nominal wages were difficult to achieve, because, as Keynes discovered, decades before, wages are “sticky downwards”. The best tactic for Capital is reductions in real wages via inflation. But, that required destroying the economic muscle of the working class organised in its Trades Unions.

In the late 1970's, Thatcher, with the help of her advisors, such as Sir John Hoskyns, Sir Keith Joseph, and Frederick Hayek, recognised this and began to plan for dealing with it. The “Ridley Plan”, developed by Tory MP, Sir Nicholas Ridley, set out a strategy for taking on the Trades Unions and defeating them. They would begin with the weaker unions such as the Steelworkers, and move on until they felt able to take on the Miners. Alongside these attacks, they began to introduce new anti-union laws, introducing a small number of measures to begin with, on which they could gradually build. At the same time, the changed economic conditions, of the Long Wave downturn, began to facilitate such a struggle. Under the advice of Hayek, a curtailment of the Money Supply was introduced. This meant that employers not only had an incentive to resist pay rises, but they would now find that if they didn't resist, they would not be able to pass them on. The consequence was a sharp rise in Unemployment, which eventually rose to around 6 million, though the Tories introduced more than 20 changes to the method of calculation to keep the official figure to around 3 million.

But, Thatcher's strategy was clever in another way. Some of the measures used to massage the figures, did so by encouraging workers to voluntarily come off the list of those seeking work. In addition to the mass of schemes run by the Manpower Services Commission, such as YTS, which paid young workers a bit more than dole to do a training course, there were things such as the Enterprise Allowance Scheme, which paid people more than their dole, if they would set up their own business. Comedian Alan Davies, in a documentary series, a while ago, described how he and other comedians, at the time, used it to obtain additional money by describing themselves as a business. But, there were many other such changes. They introduced a measure whereby workers, over 59, could obtain a higher rate of benefit, if they basically signed to say they were not looking for work. They encouraged a development of people being switched on to Incapacity Benefit, which often paid more than dole, so that the unemployed figure was reduced. All of this was designed to reduce the likelihood of workers putting up fiercer resistance to being made redundant.

In reality, the political strategy of the working-class, including that of the political leadership from the Left, was completely incapable of responding to this. It relied on “more militancy” defeating bosses, who now were likely to go bust and shut down if they did concede. It relied, on the other hand, on electing a Labour Government, who would be pushed to take action against Capital in a way it had never shown itself likely to do, on the basis of past performance. And, because it was incapable of responding to this situation, the working-class increasingly recognised it had no answers, and turned away. Had, Thatcher been defeated in 1984 over pit closures, as she had been a couple of years earlier, it would have been a temporary victory, until they came back stronger. The strategy of the “revolutionary left” was essentially that, a strategy for revolution. The only real solution to the Miner's Strike, for example, would have been if it had escalated into a struggle for power by the workers. But, although I remember attending meetings of the National Labour Briefing Editorial Board, in Birmingham, at the time, and hearing from Chris Knight that we were in a situation of dual power, in many of the coalfields, living in one of those coalfields, and being on picket lines every day of the strike, I could only smile, because the reality was quite different.

And, the other side of that reformism took a decisive twist to the Right too. If repeated industrial defeats signalled the failure of Syndicalism, Economism and Luxemburgism to provide a solution, then the other side was the increased concern for Labour Lefts to concentrate on getting a Labour Victory. The Left inside the Labour Party quickly fractured into Hard and Soft Lefts, and the Hard Left amounted to little more than the revolutionary sects, who were themselves bitterly divided against each other. I remember perfectly well how former Lefts, argued for keeping our heads down, not to rock the boat etc., which was most shamefully displayed in the attitude towards the Miners and others such as those opposing the Cuts. I remember at the time being a Councillor for a supposedly Left-wing LP Branch, and nominating Eric Heffer for Leader, and finding he received no votes, whilst the vast majority went to Kinnock. All of these defeats, industrial defeats, and political defeats, ate away at the working-class, and set the ground for Thatcher to smash the class, and its ability to resist. Once that was done, the road was open to pump money into the economy, so that inflation could rise, whilst wages did not, thereby raising the rate of profit. And, in order to compensate for falling real wages, the increased Money Supply and deregulation of the Financial and Credit Markets, which Thatcher introduced, meant that workers were encouraged to borrow like there was no tomorrow, and, in the process, put into hock all of those real assets that they had built up during the post-war period. Increasingly, workers, as well as being wage slaves, were turned into debt slaves.

Cameron, by contrast, has come to power during a period where the global economy is at a fairly early stage of a New Long Wave Boom. The reality of that is hidden because of the relative decline of developed economies such as that in Britain, and as a result of the recession in those economies, which is a consequence of the Financial Meltdown of 2008, which was itself a consequence of the build up of debt during the 1980's and 90's, and of the relative decline of the developed economies compared to the BRIC and other rapidly growing economies. The smashing of the working class, during the 1980's, set the scene for a rising rate of profit, within the global Capitalist economy, and, on the back of that, large surpluses were built up at the same time that large debts were accumulated. The BRIC economies, and others, accumulated massive surpluses, stored in Sovereign Wealth Funds, Private Investment Funds, Government Reserves, as well as private balances. Large companies accumulated huge amounts of cash, on their Balance Sheets, whether they were in the BRIC countries or in the developed economies. At the same time, household Balance Sheets, and those of small businesses, who had been encouraged to borrow on a massive scale, since the 1980's, accumulated huge debts, only sustainable on the basis of a secular downward trend in interest rates from 1982 onwards, made possible by increasing Money Printing, and by setting those debts against increasingly unsustainable and inflated assets, such as property and shares, that were themselves a product of that huge Money printing.

In other words Cameron has come to power under conditions, which are in many ways the opposite of those, which confronted Thatcher. In place of a Long Wave Downturn, Long Wave Boom; instead of a strong, militant working-class, a working-class that is smashed and demoralised; instead of a working-class that had built up real assets, a working-class that has been reduced to debt slavery.

Forward To Part 2