The Rule of Unelected Ruling Class Judges - Part 13 – Conservative Social Democracy v Reaction (2)

Conservative Social Democracy v Reaction (2)

This period of the 1980's can be analysed in the framework of Marx's theory of Historical Materialism. A set of changed material conditions create a set of new social relations, which have their reflection in the political superstructure. The political superstructure then has a feedback on to material conditions. 

One of the material conditions that Thatcher faced was high levels of inflation. The policy initially adopted by Thatcher was Austrian School control of the money supply. There is a difference between this theory and that of Friedmanite Monetarism, though the two are frequently conflated, because both are right-wing in nature. Both share with Marxism the correct understanding that inflation is a monetary phenomenon, and results from a depreciation of the currency. In economies with fiat currencies, this depreciation results from printing more money tokens than are required for circulation of commodities, so that each token is devalued, causing prices measured in these tokens to rise. The same effect can be achieved by increasing the amount of credit money in the economy. 

But, Friedman argued that the Depression of the 1930's was caused by the Federal Reserve adopting a monetary policy that was too tight. It is that approach that has been followed by Alan Greenspan, and more enthusiastically still by Ben Bernanke. By contrast, Mises argued that it was caused by the Federal Reserve having a monetary policy that was too lax, which lowered interest rates and encouraged a speculative “crack-up boom”. Marxists argue that both are wrong. The crisis that actually began after 1914-20, was due to an overproduction of capital. Capital expanded to a point where the social working day could not be expanded further, so as to produce additional absolute surplus value. On the basis of the existing technologies, nor could productivity be raised fast enough to increase relative surplus value. As the demand for labour-power rises, so wages are also raised, squeezing profits. A point is then reached, as Marx describes in Capital III, Chapter 15, where any additional accumulation of capital causes all wages to rise, so that no additional surplus value is produced, and, in fact, the amount of surplus value even falls. The additional capital has not acted as capital; it has been overproduced, profits fall sharply and a crisis ensues. The solution to this can come neither from raising interest rates, nor from lowering interest rates, tightening monetary policy or loosening monetary. It can only come from raising the rate of profit, which requires a new technological revolution. 

In 1979, Thatcher is faced with high levels of inflation approaching 20%. At the same time, throughout the 1970's, unemployment had risen, confounding Keynesian theory, as stagflation set in. Thatcher, to reduce the inflation, adopted the Misean/Austrian School solution, as recommended to her, by Hayek. A similar policy was adopted by Reagan in the US, via the Federal Reserve Chair, Paul Volcker. By the end of 1979, UK inflation was over 17%; in 1980 the rate of inflation actually rose further, because tightening monetary policy does not immediately cause the general price level to fall. What it did do was to ensure that those companies already on the edge went bust. One reason that inflation does not immediately fall, is that, as some of these companies go bust, so the mass of commodities in circulation falls, those companies that do not go bust, in any sphere, have less competition, and take advantage to raise prices, to boost their own profits. Unemployment began to soar towards 3 million. 

The Buttskellite conservative social-democrats in the Tory Party, the so called “Wets” had seen it before, in the 1930's. They baulked, and opposition to Thatcher mounted, as it looked like her days were numbered. She had won the leadership by what was effectively a palace coup. A group of Tory MP's, in challenging Heath, had gone around asking MP's to back Thatcher on the basis of her having no chance of winning, whilst having calculated that if they could get enough to support her on this basis, she could actually win. Now, it looked like the Tory establishment would strike back. But, rather like Trump today, Thatcher used the power of the position of Prime Minister, and the fact that she had the support of a majority of Tory rank and file members to brazen it out. 

Initially, the collapsing economy and soaring unemployment saw the Tories standing in the polls fall dramatically. As Michael Foot, the new leader of the Labour Party, led marches against unemployment, in cities across the country, Labour soared to 51% in the opinion polls, further weakening Thatcher's hold on power. But, she was rescued by the SDP, which split from Labour. It was not, at this point, that the Tories standing improved, but that the division of the anti-Tory forces, meant that Labour's vote share declined. 

The Tories had a plan for taking on workers and undermining their trades unions – the Ridley Plan. It involved deliberately picking fights with unions. But, even in this period of the early 1980's. The Tories had to carefully choose which groups of workers they took on. They took on weakly organised workers, and those in unions such as the steelworkers, which had a history of right-wing leadership, and compromise and betrayal. The Tories took on the steelworkers in 1981. But, in the same year, having threatened a series of pit closures, Thatcher was forced to retreat in the face of a threatened Miners' Strike. Not until 1984, were the Tories strong enough to take on the miners. 

In this period, of the early 1980's, Thatcher used tight monetary policy to squeeze inflation out of the system, and thereby forced employers to have to oppose wage rises so as not to go bust. By sending unemployment soaring, she undermined union power, and demoralised workers. The demoralisation was manifest as workers protests increasingly took on a more chaotic and individualistic nature, such as the inner city riots of 1981. 

By the early 1980's, North Sea Oil and Gas had started to bring large revenues into the coffers of the state. Instead of using it positively, to invest in the economy, Thatcher used the revenues to finance growing levels of welfare payments, as unemployment rose. Thatcher introduced 20 changes to the calculation of unemployment, to try to massage the figures. During this period, was also seen the start of moves to switch people from unemployment benefit to sickness benefit, as a means of reducing the figures. The oil revenues also strengthened the Pound, putting an additional squeeze on effective money supply, and forcing UK companies to keep a tighter control on their costs, primarily labour costs. 

At the time many people called Thatcher a fascist, but that is to use the word as merely a term of abuse, not of analysis, and thereby devalues its meaning. Thatcher was not a fascist. She was, by temperament, and by the nature of the position of Prime Minister, as “an elected dictatorship”, a Bonapartist, though her regime itself still could not be defined as Bonapartist. It was certainly characterised as being a strong state, and Thatcher's role within it, became increasingly authoritarian. That was typified in her dismissive attitude to her Cabinet, and particularly of the “Wets”. In the Spitting Image sketch, Thatcher, out to dinner with the Cabinet, orders steak, and when asked “What about the vegetables?”, replies, “Oh they'll have the same as me.”  

But, for millions of workers, life under Thatcher was not funny at all. The period saw all of those things that had been developing in the previous period raised to new heights. The NAFF assisted employers in drawing up blacklists of militant workers who were excluded from employment. In the Miners' Strike, Thatcher showed that she was prepared to use the North Sea revenues not just to pay for rampant unemployment, but to buy in foreign coal from Stalinist Poland. The experience even led arch Stalinist, Arthur Scargill, to temporarily question his admiration for the viciously anti-working class regime in Poland, and the rest of the soviet bloc. Cheap North Sea oil and gas was also used to burn in power stations, often at the cost of the longer-term condition of the boilers. The state had at least 200 leading trades union officials on its books as informants, it routinely, and blatantly opened the mail of labour movement activists, as well as tapping their phones, it sent in agent provocateurs, and bugged the offices of the NUM in Barnsley. It routinely used bully boy tactics to intimidate and arrest pickets; it effectively imposed martial law on pit villages across the country, preventing free movement. At Orgreave it used military personnel in police uniforms, alongside the regular police, who also frequently did not display their numbers on their uniforms to batter the strikers in a pre-planned assault.



It should be borne in mind that these are the same Tories that some Labour MP's, including some, like Ronnie Campbell, from mining constituencies, are aligning with, over Brexit, and in whom they are placing faith to defend workers' rights! 

At the same time, Thatcher implemented a series of populist policies, such as the Right To Buy programme, introduced in October 1980, which enabled council tenants to buy their houses at up to 60% discounts. Consistent with her Austrian School ideology, this was also a means of dismantling elements of the social-democratic state, but that element should not be overstated. The main purpose of this programme was to win votes as a populist measure. In fact, the reality is that the size of the state increased under both Thatcher and Reagan. The privatisation programme that Thatcher is perhaps most remembered for, formed only a very minor part of her agenda in 1979. It is only after the Tories were re-elected in 1983, that privatisation starts to become a major part of their programme, with the start of it beginning in 1984 with the privatisation of BT. 

What really frightened conservative social-democrats, in the 1970's and 1980's, was the potential for rank an file workers, led by militant shop stewards and activists, to take the struggle beyond the normal bounds of social-democracy. Years of experience told them they could rely on the traditional union leaders to compromise, and control their workers. They could not guarantee that, where the rank and file went beyond the limits established by those leaders, or where new leaders of the type of Scargill, themselves went beyond those bounds. The same applied in relation to the struggles against Labour Councils resisting the Tory cuts. The old right-wing Labour Councillors could be counted on to roll over and play dead, and the Labour leadership, now under Kinnock, could be counted on to support them, and oppose any resistance, as Kinnock did both in relation to the Miners Strike, and to the struggles of Labour Councils, such as in Lambeth, Liverpool and elsewhere. But, in many places, those old right-wing councillors had been deselected, or had gone over to the SDP. New radical socialist councillors were in place, who the Tories and Kinnock alike sought to crush, so as to crush any effective resistance. 

Thatcher does not set out to destroy the trades unions, but to more effectively incorporate them within the structure of the new conservative social-democratic environment. So, for example, when whole new large-scale capitals are established such as Nissan in Sunderland, Honda in Swindon, Toyota at Burnaston and so on, they are encouraged to do so on the basis of single union agreements. Moreover, Thatcher's government facilitates the incorporation of a whole layer of lay union officials into the union bureaucracy, as convenors become full-time union officials based in the plant, etc. For these capitals, the union is a direct transmission mechanism, which does away with all of the problems of dealing with thousands of individual workers, and their shop stewards, which becomes a controlling mechanism sitting on top of those individual workers, acting against the kind of unofficial, wildcat action that characterised the 1950's, 60's, and 70's. 

Thatcher's policies, themselves conditioned by material conditions, thereby feedback on to material conditions, and change them. Thatcher facilitates the clear out of zombie capitals, she undermines the power of unions to resist, she facilitates new technologies being introduced, which further undermine union organisation and wages. The consequence is a rise in the rate of profit. The mass of profit rises faster than the demand for money-capital for new investment, as the economy enters a period of stagnation, and intensive accumulation. This process is facilitated by other material changes. Across the globe a whole series of former colonies, and developing economies reach a stage of development, at least in parts of these economies, where infrastructure, and the existence of other facilities is sufficient to sustain modern industry on a profitable basis. Large scale manufacturing, using very high levels of fixed capital, which requires only unskilled machine minding labour to operate, begins to find it profitable to relocate to these areas, where large amounts of this unskilled, low wage labour is available. 

The deindustrialisation of the developed economies then arises for two reasons. Firstly, the period of intensive accumulation means that the same, or greater, output can be achieved with much less labour. Its not that the volume of material production in these economies falls, but that this production now requires less labour, and the value of this output falls accordingly. Secondly, new investments of capital in these old manufacturing industries are increasingly located in developing economies. 

Marx describes why interest rates hit their peak in the period of crisis. Now, in the 1980's, as profits rise faster than the demand for loanable money-capital, interest rates start to fall. Falling interest rates cause asset prices to rise. But, now these rising asset prices do so in an environment, where council houses are being sold off at 60% discounts, nationalised industries are being sold off at large discounts that see shares in these companies rise by 50% plus in a matter of days after flotation. The stage is set for asset price bubbles to blow up quickly, and for this to have its own impact on consciousness.  The social forces that dominated in the previous conditions, based upon the accumulation or real capital, socialised capital, now fall back, and new social forces come to the fore.  On the one hand, those based upon fictitious capital, whose rapid rise in price appears to be the source of wealth, and on the other, all of that small-scale private capital, upon which the Tory Party is based, and around which is based The Myth of the Small Business.

Forward To Part 14

Back To Part 12

Liberal-Tory Lies – The Deficit and Labour Profligacy

Source: Daily Telegraph.  The line graph shows net debt
as % of GDP, and bar charts shows Budget Deficit in
£billions.  I have provided a further graph below, which
shows the ratio of the deficit to GDP, for the same period.

The Liberal-Tories came into office on the basis of lies. One of the biggest lies at the time was that the British economy was in as bad a state as Greece. It was, of course, nonsense. Britain is an immensely rich country compared to Greece, with a corresponding ability to be able to cope with high volumes of debt, just as very rich people are able to deal with large amounts of debt, much better than are poor people for whom much lower levels of debt are crippling. In fact, having created this narrative, as the grounds for justifying their policy of austerity, only adopted after they saw it work for the Tea Party in the US, as an electoral means of differentiating themselves from Labour, and appealing to their core, it became an Albatross not just around their neck, but a dead weight around the neck of the British economy.

Consumers took them at their word, of the need for austerity, and drew in their horns in relation to their spending, reducing consumption, which is an important aspect of aggregate demand for the economy. Businesses, for the same reason, and seeing this contraction in consumption, began to scale back their plans for investment. That meant the second element of aggregate demand fell too. The three main elements of aggregate demand in the economy are Consumption, Investment and Government Spending.

The Liberal-Tories had cratered the first two, as a result of their politically motivated narrative, and in their June Budget, they also then announced a reduction in the third element, government spending, which both took money directly out of the pockets of consumers by reducing benefits and increasing taxes, and directly decimated some firms who went bust, as government contracts for construction, I.T. and so on were cancelled. Who could expect any other result than that aggregate demand in the economy would, thereby be slashed, and that the growth that had been created by Labour after 2008, would be brought to a halt? Sure enough, by the end of 2010, the economy had stalled. Whatever the technicalities about whether the economy went into a double or treble dip, the fact is that as a result of the Liberal-Tory policies the recovery that was underway was stopped in its tracks, and it was thrown into an unnecessary recession, or at least a period of stagnation.

But, the Liberal-Tories struck lucky in that the underlying long wave boom that began in 1999 provides a basis for growth, even despite the lunatic economic policy of austerity they, and similar political forces in Europe have inflicted. When the three year cycle of growth within this long wave cycle asserted itself, towards the end of 2012, this brought growth to the UK.

They also struck lucky, again as a consequence of the long wave cycle, as the huge investment in primary production after 1999, began to take effect, bringing huge drops in the prices of copper, oil, and foodstuffs, that has had a dramatic effect on inflation. The Liberal-Tories have then been able to take credit for things that have nothing to do with their policies. It has enabled them to again falsify history, claiming that the economy was in dire straits when they came to office, as a consequence of Labour's policies, and that they have turned it round. Over a series of posts, I will examine this falsification.

Here, I look at the main lie the Liberal-Tories tell. That the 2008 financial crisis, and subsequent economic crisis was a consequence of a huge budget deficit caused by overspending by profligate Labour Governments, after 1997.

I have taken the annual budget deficit from 1975 through to the end of 2012, and compared it with the GDP for each year during that period. On this basis, I have calculated the ratio of deficit to GDP, for each of these years. The graph of these ratios is given below. As can be seen, despite the fact of the second slump that began in 1974, and to which every government in the advanced economies responded with fiscal stimulus, the trend of the deficit to GDP was more or less falling between 1975-79. A period of Labour Government. In fact, in 1981, two years into Maggie Thatcher's government, when she, like the Liberal-Tories today, was embarking on a programme of slashing public spending, the ratio rose to 5.63%, a higher figure than any year during the previous government other than for 1975 and 1976, when the global slump was still at its height.

Taking the average ratio for the 1975-79 period of Labour Government, it comes to 5.41%. Bear in mind this is a relatively short period, and a period almost entirely affected by the global slump that began in 1974. By contrast, the average ratio for the period of Tory Governments from 1979-1997 is 3.48%. That is indeed, significantly less on a percentage basis, but reflects a longer period, and the different economic conditions that existed throughout it.

Even so, it hides a wide variety of ratios in different years. As the graph shows, in the years 1992-1995, the ratio rises to at least the levels seen under the previous Labour government, at the height of the 1970's global slump. In fact, in 1993, the ratio rises to 7.7%, way beyond the ratio of any year during the previous Labour government.

So, how does this record, of the uber austere Thatcher, compare with the record of profligacy of Blair and Brown?

Once again, the graph shows the answer. Far from exhibiting the kind of profligacy the Liberal-Tory lies portray, for several years Labour actually ran a budget surplus! But, even after 2001, when Gordon Brown is supposed to have opened the spigots of public spending, in a mad frenzy of profligacy, the ratio does not rise above that during the period of Thatcher's austerity! The reason is not that Brown did not actually spend, but that the spending on various forms of investment in infrastructure, facilitated enhanced economic growth, at a time when the new Long Wave Boom was getting under way. The low ratio of deficit to GDP, was a consequence of higher growth, rather than lower spending, and the two were not unrelated.

On the contrary, the reason that the Liberal-Tories have not been able to eradicate the deficit, as they promised, is not because they have failed to cut, but because they have cut, and in doing so have choked off the economic recovery that was underway under Labour after 2008! The same thing can be seen in Greece, where although spending has been slashed, the debt to GDP ratio has risen, because the economy has been shrunk by around 25%.  In fact, the picture is clear.  The US, which adopted a policy of fiscal expansion, has seen its economy continue to grow, and that growth has also now acted to reduce its budget deficit.  The UK, and other economies in Europe, choked off growth after 2010 with austerity, and have been unable to significantly reduce their deficit to GDP ratios, whilst seeing their debt to GDP ratio rise!

That can be seen in the first graph, at the top, which shows that not only have the Liberal-Tories failed to get the actual amount of budget deficit down to anything like the average under Labour prior to the financial meltdown, but the debt to gdp ratio under them has soared, from around 40% when they came into government to around 70% now.  That is because they have both failed to reduce the deficit, as the US has done by growing its economy, putting people back to work and thereby increasing its tax revenues, and because, although the economy has now started to grow in the UK, that is after three years in which the Liberal-Tories sent it into recession and slow down, so that the ratio of debt to GDP rose, as happened in Greece.  In fact, the policies of the Liberal-Tories have made the UK more like Greece today, than it ever was in 2010!  The main difference is that whereas the Liberal-Tories have only knocked 30% off the deficit here, Greece is now running a current budget surplus!

Taking the period up to 2008, when the financial meltdown occurred, and when, therefore, Labour, like all other governments, responded to bail out the banks, the average ratio of the deficit to GDP was just 1.57%, or less than half the average ratio under Thatcher and Major. Even if this figure is extended to take into consideration the whole period up to 2010, the average only amounts to 2.85%, still well below the average of the Thatcher/Major years.

The notion that the financial crisis, and subsequent economic crisis was due to Labour profligacy is a Liberal-Tory lie. The only years in which the deficit to GDP ratio was higher under Labour than the average under the previous Thatcher/Major government, was between 2008-2010, due to severe and unusual circumstances caused by external events. If anything, those external events could themselves be put down to the policies of monetary expansion, financial speculation, and deregulation of financial markets, introduced by Thatcher and Reagan at the end of the 1980's.

Thatcher – A Disaster For Capital A Bigger Disaster For Workers

There is a strand of thought within the Left that sees all political developments as inevitable consequences of the needs of capital. This kind of crude economic determinism has nothing in common with Marxism. It assumes that there is some kind of single capital logic outside of which historical development cannot stray. If we were to take it literally then either we have to conclude that Socialism is hopeless, because all future development is predetermined, and Capital will always win, or else it is inevitable, in which case there is nothing we as socialists or workers have to do, because history will bring it to us on a plate anyway. It confuses the fact, as Marx demonstrated, that all history can be explained in rational terms, after the event on the basis of the struggle of contending forces, which are ultimately motivated by economic interests, with the idea that only one outcome was ever logically possible.

There was no inevitability of Thatcher or Thatcherism. After the event, we can understand how both Thatcher and Thatcherism arose, and we can understand that in rational terms. We can even understand what economic forces created the conditions for her rise, and continuation, but there was nothing inevitable about it. Arguments that she or someone like her was inevitable, because Thatcherism was needed by Capital, are crude determinism, and also contrary to the facts. The reality is that Thatcher is rightly hated by workers, because she was a disaster for them, but she was also a disaster for capital itself.

There certainly was no inevitability of Thatcher personally coming to power. She faced considerable opposition within the Tory Party itself, before she could even become its leader. All of the Tory grandees opposed her. She won the leadership on the basis of rank and file Tory support, that reflected a Party in her own image. A party of mostly, reactionary, petit-bourgeois. Having done so, there was no inevitability that she would win the election. In fact, in 1978, the odds were that Labour would win the next election. Had Callaghan not delayed in 1978, had he not remained attached to the crumbling Social Contract with the TUC, and provoked the Winter of Discontent, its likely Labour would have won.

Having won the 1979 Election, Thatcher's stay in power for long was also far from inevitable. Her position as leader was not secure. She faced a continual threat from the Social Democratic wing of the party, what came to be known as “The Wets”. Moreover, even at the time of the Election Thatcherism as it came to be known did not exist. There was no mention of privatisation, for example, and Thatcher despite the sound bites was quite capable of making U-Turns when required. When it looked like she would lose against the miners in 1981, over pit closures, she backed down.

Moreover, in 1981, what looked inevitable was that Thatcher's stay in power would be very short lived. At that time she went down as the most unpopular Prime Minister of all time. I well remember, as unemployment soared, marching with tens of thousands of others in Liverpool, London and other major cities, on demonstrations headed up by Michael Foot. At that time, the Labour Party stood at more than 50% in the opinion polls that would have seen it home with a huge majority at the next election. The opposition to Thatcher within the Tory party intensified. There was no inevitability of Thatcher or Thatcherism.

Thatcher was saved by the Falklands War, and by other factors. The other factors included sectarianism on the Left, and poor tactics by the Local Government Left in fighting cuts, and linking up their struggle with that of other workers. Thatcher undoubtedly used the Falklands to engage in sabre rattling to gain support by rallying around the flag, but its unlikely that even she decided to sacrifice hundreds of British troops lives, and of Argentinian lives simply for her own electoral success. The War happened because such sabre rattling has a dynamic of its own that can lead to war when neither of the parties really has any desire for it. Its a lesson that should be born in mind today in Korea. But, there was plenty of opposition within even the Tory Cabinet to the war even when it started. Britain was lucky to win the war even against a third rate power like Argentina, because they nearly ran out of ammunition! Had Britain lost, Thatcher would have been out, and probably Labour would have won the ensuing election. There was nothing inevitable about Thatcher or Thatcherism.

Only after the Falklands did Thatcher's position become secure within the Tory Party, yet even then it was not inevitable that the Tories would remain in power. Had the SDP not split from Labour and linked up with the Liberals, Labour would probably have won the 1983 election. Certainly the Tories would have had a much smaller majority. There was nothing inevitable about Thatcher or Thatcherism.

But, nor can Thatcherism be explained in terms of the needs of Capital. The idea that what modern capitalism needs is the kind of small state mentality that Thatcherism represented, and which Cameron today tries to replicate, is absurd. Since its inception, Capitalism has relied on a powerful Capitalist State standing behind it and supporting it. As Marx sets out in Capital, it was the Capitalist State, and in particular the building up of a huge National Debt that played a major role in the process of primary accumulation of capital. It was the State which provided the military force required by Merchant Capital for Colonial expansion, and modern Big industrial capital is highly tied to the State. In the US, in France, in Germany, in Japan and more recently in places like Taiwan, Singapore, Malaysia and China the State has played a central role in supporting capitalist development including picking industrial winners, and helping finance them, or shape economic policy to meet their needs.

Moreover, under Thatcherism, the size of the State did NOT contract, it expanded! That was not just because she built up the bodies of armed men to batter down workers. The aspect of the State that expanded most under Thatcherism was Welfarism, as mass unemployment swelled the payments of benefits for years on end. Moreover, the attempt to massage the unemployment figures via more than 20 changes to the basis of calculation, also brought about the condition that has persisted since, that large numbers of people were moved off the unemployment register, and on to the list of people claiming Incapacity Benefit. From the perspective of Capital, this represented not some kind of inevitable logic, but a huge waste of resources.

It did have a logic for Thatcher, and the section of society she represented, however. Thatcher, like Cameron today represented the interests not of the dominant section of Capital, but of the class she came from, the small capitalists, the petit-bourgeoisie, and middle class, with all its attendant reactionary, narrow minded, and nationalistic views, that is quite antithetical to the needs of big, multinational, industrial capital. It was that, which led to her vitriolic hatred of Trades Unions – who, in fact, the big, multinational, industrial capitalists had long since learned to live with, and make use of. The section of society that Thatcher represented, like the Libertarians and Anarcho-Capitalists today were the enemy of that Big industrial capital. That is why, as the process of de-industrialisation unfolded, Thatcher rather than intervening in the interests of that industrial capital, instead pursued policies that hastened its demise.

Thatcher not only allowed large scale manufacturing industry to rot, she encouraged it, she pursued policies that hastened it. Policies such as the introduction of Enterprise Zones, worked in that direction, because what they were about was providing support for all those small, inefficient capitalists, who like the zombie companies today, could only exist on the back of cheap labour, and oppressive working conditions. Thatcherism encouraged the development of a low wage-high debt economy, which was quite alien to the needs of big industrial capital, which for decades had learned that the most effective means of extracting surplus value, was via investment in equipment that would raise productivity. The proof of that was what happened when large Japanese industrial companies set up car plants in the country, which over night were some of the most efficient in the world, and profitable from day one, despite paying generally above average wages, and providing better than average working conditions.

In order to create a low wage-high debt economy, the economy which has caused most of the problems the UK suffers from today, Thatcher set about allowing all of these old large industries to go to the wall, in order to undermine the strength of workers. Unemployment rose, and welfare spending rose with it, funded by North Sea oil revenues, that were squandered, whereas they could have been used to restructure British Capital towards more efficient, high value production ready for when the new global upturn began. The argument that this strategy was needed for Capital in order to defeat the Trades Unions does not stand up. It turns a Trades Union movement, which in Britain had been the backbone of reformism, of bargaining within the system for more than a century into some kind of revolutionary force. It portrays the British Trades Unions as more of a threat to Capital than were the more powerful Trades Unions in France or Germany, or Italy, where no such strategy was adopted. There was nothing inevitable about Thatcherism.

In Germany, the kinds of reforms to the labour process that Thatcherism is said to have been needed for, were achieved over a longer period, largely on the basis of consensus with the Trades Unions. The Social Contract had demonstrated the way the British Trades Unions could be incorporated into a similar process in Britain too. Had the Callaghan Government had the resources of North Sea Oil, that Thatcherism squandered on Welfare payments in the 1980's, then it is likely that it would have oiled the wheels of a similar transition. But, its possible that a Tory Government led by one of its social-democratic wing, like Heseltine, might have achieved something similar. What stood against that, was not the interests of Capital, but the weight of all those small capitalists, and backward sections of the middle class that made up the ranks of the Tory Party.

The real British disease in the 1970's, was not too powerful Trades Unions and repeated strikes, it was an already decayed industrial structure, whose real decay was being highlighted by the onset of the Long Wave downturn, in a world where new modern, dynamic industrial powers were rising within the global economy. The problem with the British car industry was not its industrial relations, but decades of under investment, and a continuation of plants in unsuitable locations, such as Longbridge, that resulted in higher than average costs, inadequate investment in research, development, and design and whose consequences were lack of competitiveness and profitability, which lazy managements then attempted to resolve on the backs of the workers, which then resulted in the poor industrial relations.

Unlike, what happened in Germany, Thatcherism did nothing to change that underlying reality. In the end, the attacks on the Trades Unions, and the mass unemployment that facilitated them, and the low wages they were intended to facilitate, did nothing to assist British industrial capital, which continued to decline and disappear. Sometimes it disappeared to China, or elsewhere, but frequently it also simply disappeared altogether as a total loss. So, to say that Thatcher's policies of attacks on workers was needed by this important section of capital makes no sense.

That, of course, is not to say that workers should have settled for a social-democratic solution for Capitalism either. Yet, a look at Germany and the UK today, and the experiences of workers in both countries over the last 30 years, shows which model has been better both for workers and for Capital, and it most certainly was not the Thatcherite model. That is despite the fact that Germany did not have the huge benefit of North Sea Oil that Britain has enjoyed. In Germany, workers wages are higher, pensions are higher, the welfare state provides superior benefits, working conditions are far superior, and workers have not gone through the traumas that British workers have endured. Its society is more equal, and stable. Other European countries that followed a similar social-democratic model show the same benefits. Britain by contrast as a result of Thatcherism and the economic and social conditions it generated, created a more unequal, much less stable society. All social analysis shows that such societies by their nature are less productive than those which are more equal and stable.

Germany, has maintained a large productive sector of its economy, and is still the world's second largest exporter, just behind China. By contrast, Britain's economy has been hollowed out, which by no stretch of the imagination can be described as having been in the interests of Capital. A low wage-high debt economy created by Thatcherism, fostered all of those low value, inefficient sections of capital, as well as unproductive sections of Capital, such as in Financial Services. But, that model based on blowing up asset price bubbles, as a means of encouraging people to borrow to consume, could not go on forever. It has led to the current Financial Meltdown.

That model is also what led to the policy of selling Council houses. Of course, today, the news media only talk about those for whom that was a boon, but they fail to mention that in the house price crash and rising unemployment after 1990, thousands of people who had been encouraged to buy their Council house, had to hand it back, because they could not pay the mortgage! And, of course, that very policy is partly to blame for the lack of social housing today, along with the concomitant policy of preventing Councils from using Capital receipts from sales to build new Council houses. The same economic policy is also what led to the encouragement of people to spend large amounts of money on private Pensions, which became next to worthless in the Stock Market Crash of 2000.

The policy on Council houses was merely emblematic of what Thatcherism was, a great Ponzi Scheme, built on debt, which kept the Tories in office for a long period, by giving huge bribes to its electoral base. It did so at the cost of essentially defenestrating the counties economy and social structure. The policy of privatisation was another example. The industries that had been nationalised, had been so because they were already bust due to years of under investment. Nationalisation was largely a policy for providing the needed investment by the taxpayer, whilst the industry was rationalised at the expense of its workers – sometimes rationalised out of existence – ready to be taken over again. When Thatcher began the policy of privatisation, limits were placed on the number of shares that could be obtained. This was a blatant bribe to the middle class. The offer prices were set artificially low. The middle classes, and better off workers were able to buy their maximum amount of shares, sure in the knowledge they would make a sizeable capital gain within weeks when they sold them. When they did sell the shares were picked up by the banks and financial institutions.

This process of making investing all about short term Capital Gains rather than long term investment for income fed into the Thatcherite high debt model. Combined with the deregulation of banks and financial services culminating in the Big Bang, it set the conditions for the subsequent huge bubbles in property and share prices, and thereby for the subsequent bursting of those bubbles. Increasingly, investing and making money became about gambling on such rapid changes in asset prices rather than investing in actual productive activity. That again is what led to the imbalances in the UK economy, and its over reliance on the banks and Finance houses.

When the Tories complain about the imbalances in the economy, and the lack of regulation of the banks, they should blame Thatcher. When they complain about the lack of any large manufacturing sector, they should blame Thatcher. When they complain about the problems of people stuck on welfare for decades, they should blame Thatcher. When they complain about the inability for ordinary people to buy houses, they should blame Thatcher.

But, there is little to be gained from such blame gains. In the end, the only people we can blame for our condition is ourselves, for failing to take control of our own lives, and leaving it in the hands of our enemies. In one respect, Thatcher was right, therefore, that we should not rely on some benevolent dictator in the shape of the state or politicians resolving our problems for us. But, as Marx pointed out, the days when individual peasant producers could do that have long since gone. The only way we today can resolve our own problems is collectively. That is why workers created Trades Unions, it is why they created Co-operative enterprises and stores, and why they established Friendly Societies and other Mutual organisations so that they could collectively provide for their own welfare and social security. In rejecting Thatcherism, we should not go back to the failed statist models that preceded it, but go forward to rebuild and rejuvenate all of those basic organisations of workers self activity, self-help and self government. If we do that, Thatcherism will actually in the end have done us a favour.

History Repeating As Farce - Part 6

Marx's description wonderfully illustrates the complex dialectical dynamics that operate within the political superstructure. He writes,

“The period that we have before us comprises the most motley mixture of crying contradictions: constitutionalists who conspire openly against the constitution; revolutionists who are confessedly constitutional; a National Assembly that wants to be omnipotent and always remains parliamentary; a Montagne that finds its vocation in patience and counters its present defeats by prophesying future victories; royalists who form the patres conscripti [elders] of the republic and are forced by the situation to keep the hostile royal houses they adhere to abroad, and the republic, which they hate, in France; an executive power that finds its strength in its very weakness and its respectability in the contempt that it calls forth; a republic that is nothing but the combined infamy of two monarchies, the Restoration and the July Monarchy, with an imperial label – alliances whose first proviso is separation; struggles whose first law is indecision; wild, inane agitation in the name of tranquillity, most solemn preaching of tranquillity in the name of revolution – passions without truth, truths without passion; heroes without heroic deeds, history without events..”

Could there be a more poetic refutation of those Marxists who operate with a purely mechanistic, and economic determinist method, and who see in the words of bourgeois politicians the mere reflection of the interests of the bourgeoisie, or of some Capital logic?

“Upon the different forms of property, upon the social conditions of existence, rises an entire superstructure of distinct and peculiarly formed sentiments, illusions, modes of thought, and views of life. The entire class creates and forms them out of its material foundations and out of the corresponding social relations. The single individual, who derives them through tradition and upbringing, may imagine that they form the real motives and the starting point of his activity. While each faction, Orleanists and Legitimists, sought to make itself and the other believe that it was loyalty to the two royal houses which separated them, facts later proved that it was rather their divided interests which forbade the uniting of the two royal houses. And as in private life one differentiates between what a man thinks and says of himself and what he really is and does, so in historical struggles one must distinguish still more the phrases and fancies of parties from their real organism and their real interests, their conception of themselves from their reality.”

Marx also correctly identifies the nature of Social-Democracy, not in terms of specific parties, but as an ideological strand. Here, Marx identifies the ideas that lie behind Social-Democracy with the petit-bourgeoisie, with the particular interests of a social strata that stands between Capital and Labour, and for whom the idea of progress outside the class struggle, or avoiding class struggle seems natural. But, as Engels pointed out in his Prefaces to the Condition of the Working Class, written near the end of his life, what Social Democracy actually became was a form of bourgeois democracy, in which this was institutionalised. It represented an historic compromise between Big Industrial Capital and Labour, manifest in Fordism in production, and Welfarism in the State. As such, for so long as the needs of Capital Accumulation facilitated it, politicians, in all parties, could advance the ideas enshrined within Social Democracy. Those ideas could as easily be advanced by the US Democrats, as German Social Democrats, by French Gaullists as British Labourists. They were manifest in what became known as “Buttskillism” in Britain; the combination of R.A. Butler and Hugh Gaitskill, the former a Tory, the latter Labour Leader, both of whose parties, after WWII, were committed to the ideas of full employment, Keynesian intervention, the Welfare State, and so on that characterise that Social Democratic consensus.

“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. Only one must not get the narrow-minded notion that the petty bourgeoisie, on principle, wishes to enforce an egoistic class interest. Rather, it believes that the special conditions of its emancipation are the general conditions within whose frame alone modern society can be saved and the class struggle avoided. Just as little must one imagine that the democratic representatives are indeed all shopkeepers or enthusiastic champions of shopkeepers. According to their education and their individual position they may be as far apart as heaven and earth. What makes them representatives of the petty bourgeoisie is the fact that in their minds they do not get beyond the limits which the latter do not get beyond in life, that they are consequently driven, theoretically, to the same problems and solutions to which material interest and social position drive the latter practically. This is, in general, the relationship between the political and literary representatives of a class and the class they represent.”

The French bourgeoisie sought to smash the petit-bourgeoisie, and its representatives. It needed to force it out, and provoked it by the bombardment of Rome by French troops. That act contravened Article 5 of the Constitution. Given the Tories War against Libya, their forcing through of the rise in Tuition Fees, Cameron's campaign against AV, and his walk-out from the EU talks, the reckless pursuit of the Health Service reforms, which even Tory Ministers we learn oppose, and consider to possibly have a similar consequence as the Poll Tax had for Thatcher, the question arises of whether he too has learned this lesson from history. The history of all these alliances is that when the stronger partner feels sufficient ground beneath their feet, they create the conditions by which their ally is left with no choice but to jump. But, the other lesson from the coup of Louis Bonaparte is that, Cameron may find that having freed himself of forces to his Left, he is isolated himself with no one to defend him from forces to his Right! The more he relies on Right-Wing populism, which appeals to all of those reactionary prejudices which drive the small business class, reactionary sections of the middle class, and backward sections of workers, the more he is tied to the representatives, in his own Party, of the worst of these elements, the more he is tied to the loony neo-fascist, anti-semitic elements in Europe, the more he strengthens those elements, and weakens his own position.

Of course, the worst thing that Labour could do under such conditions, given the experience of France, described by Marx, would be to provide the Liberals, and Social-Democratic Tories with a home, or to in any way associate itself with them.

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History Repeating As Farce - Part 5

It would be wrong to describe Cameron's coming to power as the same as the coup of Louis Bonaparte. But, Cameron does not have a democratic mandate. No one voted for a Coalition Government. In fact, many of those who voted for the Liberals probably would not have done so had they known what the consequence would be, and that is shown in the, almost total, collapse of Liberal support, and the number of Liberal members who have defected to Labour. In the same way that Marx describes the continual giving ground of parties to their Right, in the Eighteenth Brumaire, so the Liberals have done precisely that in their coalition with the Tories. They have reneged on all their election pledges of note; on liberty, on sleaze, on corruption, on recall of MP's, on Europe, on War etc.

“The bourgeois monarchy of Louis Philippe can be followed only by a bourgeois republic; that is to say, whereas a limited section of the bourgeoisie ruled in the name of the king, the whole of the bourgeoisie will now rule in the name of the people.”

Under Thatcher and her heirs a tiny section of the bourgeoisie, the Money Capitalists ruled. Now its rule is being challenged by the rest of the bourgeoisie, and it is being challenged on the basis of populism. The organised Labour Movement having been driven back essentially into those workers employed by the Capitalist State, made a stand. Their demands were labelled as utopian nonsense, in rejecting the idea that they should pay for the crisis caused by the Bankers. But, of course, from the perspective of the Big Industrial capitalists, this is not such utopian nonsense. These workers are not only the consumers of their products, but the more these workers are asked to bail-out the bankers, the more they are likely to demand higher wages, to cover the costs of the additional taxes they have to pay, to cover the cost of the previously “free” services they enjoyed, which they now have to buy and so on. As Marx, put it in the Grundrisse,

“It is clear, first of all, that the wage paid by the spinner to his workmen must be high enough to buy the necessary bushel of wheat, regardless of what profit for the farmer may be included in the price of the bushel of wheat; but that, likewise, on the other side, the wage which the farmer pays his workers must be high enough to procure for them the necessary quantity of clothing, regardless of what profit for the weaver and the spinner may be included in the price of these articles of clothing."

In the short term, however, Capital will follow the course of least resistance. The Big Capitalists may not like the solutions being pursued by the Tories, which favour the Money Capitalists on the one hand, and the Small Capitalists on the other, but, they have no intention of breaking ranks and allowing the workers to advance their own solutions.

“The demands of the Paris proletariat are utopian nonsense, to which an end must be put. To this declaration of the Constituent National Assembly the Paris proletariat replied with the June insurrection, the most colossal event in the history of European civil wars. The bourgeois republic triumphed. On its side stood the aristocracy of finance, the industrial bourgeoisie, the middle class, the petty bourgeois, the army, the lumpen proletariat organized as the Mobile Guard, the intellectual lights, the clergy, and the rural population. On the side of the Paris proletariat stood none but itself.” (Eighteenth Brumaire, Chapter 1)

The consequence is that a steady rightward march is set in motion.

“During the June days all classes and parties had united in the party of Order against the proletarian class as the party of anarchy, of socialism, of communism. They had “saved” society from “the enemies of society.” They had given out the watchwords of the old society, “property, family, religion, order,” to their army as passwords and had proclaimed to the counterrevolutionary crusaders: “In this sign thou shalt conquer!” From that moment, as soon as one of the numerous parties which gathered under this sign against the June insurgents seeks to hold the revolutionary battlefield in its own class interest, it goes down before the cry: “property, family, religion, order.” Society is saved just as often as the circle of its rulers contracts, as a more exclusive interest is maintained against a wider one. Every demand of the simplest bourgeois financial reform, of the most ordinary liberalism, of the most formal republicanism, of the most shallow democracy, is simultaneously castigated as an “attempt on society” and stigmatized as “socialism.” And finally the high priests of “religion and order” themselves are driven with kicks from their Pythian tripods, hauled out of their beds in the darkness of night, put in prison vans, thrown into dungeons or sent into exile; their temple is razed to the ground, their mouths are sealed, their pens broken, their law torn to pieces in the name of religion, of property, of the family, of order. Bourgeois fanatics for order are shot down on their balconies by mobs of drunken soldiers, their domestic sanctuaries profaned, their houses bombarded for amusement – in the name of property, of the family, of religion, and of order. Finally, the scum of bourgeois society forms the holy phalanx of order and the hero Crapulinski [a character from Heine’s poem “The Two Knights,” a dissolute aristocrat.] installs himself in the Tuileries as the “savior of society.””

That march is seen in the gradual rise of the Tory Right, the support for the narrow interests of the City, the EU walkout, Cameron's use of the Church and Christianity – even the Catholic Blair did not do that saying “We do not do God”. Most recently it is seen in the Tories rapid announcement that they would legislate to allow the continuation of the medieval practice of beginning Council meetings with Christian Prayers, after the Secular Society succeeded in getting the Courts to rule the practice as discriminatory. In an unprecedented move, the Tory Government has sent seven M.P.'s to Rome for consultations with the Pope, and Baroness Warsi has come out with the most hilarious comment that Britain is under threat from a “militant secularism”. That ties in with the attempts of Christian groups to ridiculously claim that they are being persecuted. It is seen in the move from “hug a hoody” to gaol a rioter, in the proposals to restrict even further the right to strike and so on. It is seen in the attempts to free the State from even the most basic requirements of the Rule of Law in relation to the right of trial by Jury, and attempt to free it from the requirements of meeting basic Human Rights as determined by the European Convention and Court. And all the time Cameron looks over his shoulder to the blond haired, dishevelled Crapulinsky in his London fortress.

As I said in my post High Pay, Capital And The Tories, they are several parties merged into one. The historic Tories are the Party of the Aristocracy, and the Aristocracy of Finance. But, as the Aristocracy became Capitalist itself, and as the Liberals attempt to ride both horses – representing the interests of Capital and Labour at the same time – could only be sustained so long as both classes had a common enemy, in the old ruling class, and was destroyed when workers created the Labour Party, to push their independent interests, the Tories became the natural party of the bourgeoisie, particularly the nationally based bourgeoisie. This is played out in the right-wing populism of the Tories.

“The history of the Constituent National Assembly since the June days is the history of the domination and the disintegration of the republican faction of the bourgeoisie, of the faction known by the names of tricolor republicans, pure republicans, political republicans, formalist republicans, etc.

Under the bourgeois monarchy of Louis Philippe it had formed the official republican opposition and consequently a recognized component part of the political world of the day. It had its representatives in the Chambers and a considerable sphere of influence in the press. Its Paris organ, the National, was considered just as respectable in its way as the Journal des Débats. Its character corresponded to this position under the constitutional monarchy. It was not a faction of the bourgeoisie held together by great common interests and marked off by specific conditions of production. It was a clique of republican-minded bourgeois, writers, lawyers, officers, and officials that owed its influence to the personal antipathies of the country to Louis Philippe, to memories of the old republic, to the republican faith of a number of enthusiasts, above all, however, to French nationalism, whose hatred of the Vienna treaties and of the alliance with England it stirred up perpetually. A large part of the following the National had under Louis Philippe was due to this concealed imperialism, which could consequently confront it later, under the republic, as a deadly rival in the person of Louis Bonaparte. It fought the aristocracy of finance, as did all the rest of the bourgeois opposition. Polemics against the budget, which in France were closely connected with fighting the aristocracy of finance, procured popularity too cheaply and material for puritanical leading articles too plentifully not to be exploited. The industrial bourgeoisie was grateful to it for its slavish defense of the French protectionist system, which it accepted, however, more on national grounds than on grounds of national economy; the bourgeoisie as a whole, for its vicious denunciation of communism and socialism.” (ibid Chapter 2)

We can see, within the sections of the Liberals, and within those sections of the Tories, more aligned with Industrial Capital than Money Capital, elements of the same traits described here by Marx. The main difference here would be that, today, these elements are more likely to be advocates of Free Trade than Protectionism, and more inclined to be Europhiles than Little Englander nationalists. But, that is because today the interests of Industrial Capital are served by such policies. It was to protect Money Capital in the City that Cameron flounced out of the EU Summit, as well as to placate the right-wing, Eurosceptic wing of his Party. It is perhaps, an indication of the way the Civil War between the Money Capitalists and Industrial Capitalists is ebbing and flowing that he has now retreated significantly from his earlier position.

“They did not succumb; they passed out of existence. Their history has come to an end forever, and, both inside and outside the Assembly, they figure in the following period only as memories, memories that seem to regain life whenever the mere name republic is once more the issue and as often as the revolutionary conflict threatens to sink down to the lowest level. I may remark in passing that the journal which gave its name to this party, the National, was converted to socialism in the following period.”

We have yet to see the conclusion of this process. Will Industrial Capital defeat Money Capital in the battle for dominance? Will that be achieved within the political confines of the Coalition? Will it require some kind of political realignment, in the same way that the onset of the Long Wave downturn, and the class struggles around it, led to the creation of the SDP? We have already seen the effective destruction of the Liberals as a political force. That in itself makes them hostage to the Tories, because if they bring down the Government, and cause an election, then their annihilation in that election is guaranteed. But, they may be annihilated on a piecemeal basis, as they lose their base at succeeding local government elections, and as the Left of their membership continues to drift into the LP. Speaking of the election of December 10th, Marx wrote,

“ It is sufficient to remark here that it was a reaction of the peasants, who had had to pay the costs of the February Revolution, against the remaining classes of the nation...”

And, of course, that is precisely what the election of 2010 was, except for peasants read, the small capitalists, the petit-bourgeois, the middle classes. They saw in the saving of the Banks, a great burden of taxation heading their way. Of course, they would vote for a Party that talked in populist terms about reducing the size of the State, balancing the Budget and other such nonsense, even if that Party had been advocating at least as much spending as had been its opponents up until just months before the election!

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History Repeating As Farce - Part 4

In 2008, there was a catastrophic illustration of the chaotic and contradiction riddled nature of Capitalism, as the recklessness of the financial markets – which had been stimulated by the policies of Thatcher and Reagan, and their successors, (deregulation, monetarist stimulation etc.) – erupted into the Global Financial Meltdown, which threatened to bring what had been, until then, a reasonably healthy, growing global economy to its knees.

It led to massive state intervention to bail-out the Banks. In fact, it illustrated the truth about Neo-Liberalism. It had nothing to do with shrinking the size of the State. Neo-Liberalism was merely the ideological representation of the interests of Money Capital as against Industrial Capital. The State remained as central as it had always been, but its intervention was now based upon Monetary Intervention, rather than Fiscal Intervention, and that, in turn, was dictated by the needs of Money Capital rather than Industrial Capital. When that Money Capital needed to be bailed-out, the State was there to do it, even if the longer term cost, to pay for it, would be aimed once again at Industrial Capital. But, as I wrote at the time - Where We're Going - it transferred the problem from US and UK and European Banks to the US, UK and European States, whose own sovereign debts and creditworthiness were called into question. That was to manifest itself in the printing of money in the US and UK to cover these debts, and in the peripheral Eurozone crisis for those economies that did not have that option.

The US and UK were left with huge debts to repay. Under such conditions, the question becomes who will pay? In the early 1980's, Thatcherism arose, in large part, because, on the back of the strength that workers had built up, during the Long Wave Boom, from 1949 to 1974, they had been able to resist the demands of Capital, when that boom ended. It was fought out in the great class battles of the early 1980's, culminating in the Miners Strike of 1984-5. It might have been that this was played out once again; the workers and their natural allies amongst the middle class insisting that the Bankers pay for the crisis they had caused. But, as Marx says in the Eighteenth Brumaire,

“The nation feels like the mad Englishman in Bedlam who thinks he is living in the time of the old Pharaohs and daily bewails the hard labour he must perform in the Ethiopian gold mines, immured in this subterranean prison, a pale lamp fastened to his head, the overseer of the slaves behind him with a long whip, and at the exits a confused welter of barbarian war slaves who understand neither the forced labourers nor each other, since they speak no common language. “And all this,” sighs the mad Englishman, “is expected of me, a freeborn Briton, in order to make gold for the Pharaohs.” “In order to pay the debts of the Bonaparte family,” sighs the French nation. The Englishman, so long as he was not in his right mind, could not get rid of his idée fixé of mining gold. The French, so long as they were engaged in revolution, could not get rid of the memory of Napoleon, as the election of December 10 [1848, when Louis Bonaparte was elected President of the French Republic by plebiscite.] was proved. They longed to return from the perils of revolution to the fleshpots of Egypt , and December 2, 1851 [The date of the coup d’état by Louis Bonaparte], was the answer. Now they have not only a caricature of the old Napoleon, but the old Napoleon himself, caricatured as he would have to be in the middle of the nineteenth century.”

And, in Britain, the nation remains spellbound by the ghost of Thatcher, even before she is officially dead. Politicians of all parties and their advisors proclaim, “We are all Thatcherites now!” Labour Prime Ministers invited her to Downing Street, and Hollywood makes films about her. Despite the grim reality of Thatcher's Britain, which caused Public and Private squalor, which hollowed out not just the country's economy, but its morality, the myth has been perpetuated.

Campo, Foggy Osbourne & Cleggy

No wonder then that the Thatcherite mantra about the size of the State (which itself was a deception, because it grew under Thatcher too!) and the need for austerity, to balance the family books like those of a household, appealed, and continue to appeal to a majority in a nation that has not yet exorcised the ghosts of the 1980's. They could not get rid of the ghost of Thatcher as the 2010 Election proved. And now we have Thatcher herself caricatured by Cameron, as he has to be in the second decade of the 21st Century, with Nick Clegg and the Liberals in the role of “The Wets”.

“The social revolution of the nineteenth century cannot take its poetry from the past but only from the future. It cannot begin with itself before it has stripped away all superstition about the past. The former revolutions required recollections of past world history in order to smother their own content. The revolution of the nineteenth century must let the dead bury their dead in order to arrive at its own content. There the phrase went beyond the content – here the content goes beyond the phrase.” (ibid)

In looking for a path forward, workers cannot look back to the 1970's and 80's either, any more than Cameron's harking back to then can provide a solution for Capital. The “more militancy” approach of the 1960's, 70's and early 80's proved a dead-end. It did not lead to some Luxemburgist spontaneous spill-over into revolutionary action or consciousness. It never could have done. It led only to a more militant Economism, Reformism, and Syndicalism, sometimes manifest in industrial struggle, sometimes in electoralism in the Labour Party for demands to be raised on the Capitalist State to act as the workers' benefactor. It is a far cry from Marx's analysis in relation to the State where he wrote,

“ All revolutions perfected this machine instead of breaking it. The parties, which alternately contended for domination, regarded the possession of this huge state structure as the chief spoils of the victor.

But under the absolute monarchy, during the first Revolution, and under Napoleon the bureaucracy was only the means of preparing the class rule of the bourgeoisie. Under the Restoration, under Louis Philippe, under the parliamentary republic, it was the instrument of the ruling class, however much it strove for power of its own.”

Chapter 7.

For one thing, the working-class of today, and its organisations are not those of the 1960's and 70's. The working-class is weak, disorganised and lacks leadership, rather like the workers in France in 1851. But, why would workers want to simply revisit the failed tactics and strategy of those times? Its certainly true that for Big Capital the use of Keynesian intervention, which is one aspect of Reformism, offers a better solution, under current conditions, than Misean, Neo-Austrian austerity, and for similar reasons to those which led to the historic class alliance between Big Capital and Labour, represented by the Social Democratic consensus; a better alternative for Labour too. The stark contrast between the US and the UK demonstrates that. The US, which has adopted significant Keynesian stimulus has seen growth strengthening, and unemployment falling. The UK has seen the opposite. But, a better alternative is not the same as the best alternative!

As I pointed out recently - Civil War In The Capitalist Class these different interests between Money Capital, and Industrial Capital appear to be playing themselves out in a real struggle. Within that context, the ideas that have dominated the previous period can continue to hold considerable sway. Moreover, as I also previously argued - High Pay, Capital and the Tories - we should not equate the statements and actions of some of the bureaucratic managers of Capital with the interests of Big Capital itself. These bureaucrats, rather like the Trade Union and Labour bureaucrats, have interests of their own, separate to those of the class they serve. The Bureaucrats and managers of organisations like the CBI are more akin to the small capitalists than to Big Capital. In the US, this is often more apparent than here. There, Capital is more brutal in bringing these bureaucrats to book, when they step over the line in pushing their own interests as the example of Dennis Kozlowsky and Tyco demonstrated.

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