Until very recently phrases like “Thatcherite revolution” and ‘‘economic
miracle” were never far from the lips of most political commentators. They insisted that society had changed fundamentally and irreversibly, and that the economy in Britain had undergone a glorious transformation since the dark days of the 1970s.
The events of 1989 have clouded this analysis somewhat and opinion polls are now suggesting that faith in the Tory Party to administer capitalism is on the wane. But in the long run-up to the next General Election the Conservatives will no doubt trot out the old line that things have all been very different under them and that we’ve “never had it so good”. For this reason alone it’s worth comparing their claims and promises with reality.
A few years ago Mrs. Thatcher went on record as saying this:
I came to office with one deliberate intent — to change Britain from a dependent to a self-reliant society, from a “give it to me” to a “do it yourself nation”; a “get up and go” instead of a “sit back and wait for it” Britain.
In making this statement she was developing the ideas of Nineteenth Century self-help and laissez-faire, where the hardworking and thrifty succeed and the lazy and spendthrift are supposed to exist on the merest basic subsistence. A society based on these principles is intended to ensure that individuals work hard instead of expecting other people or the state to give them handouts of some kind. This view extols the virtues of what is now known as “entrepreneurship” while denigrating supposedly lazy workers, those who receive state benefits and others who don’t find favour in the columns of the Daily Express.
So using Thatcher’s statement of intent as a basis, the question which must be asked is whether, after years of her Conservative Governments, Britain is now a place in which the hard working have the wealth and where the lazy exist at subsistence level. Now if this were the case, there really would have been an economic miracle of sorts. For it is the hard working people, who perform all the useful functions in society, who are being paid at subsistence level (as they have been throughout the history of capitalism) and those who have most of the wealth who can afford to be lazy. Far from this situation being changed in any way, Mrs. Thatcher and her Governments have tried to ensure it continues as it is. Thatcher’s pronouncement was intended to justify ideologically the present state of affairs, not encourage a change. In this sense. Thatcherism is fundamentally a defence of the status quo dressed up as social change.
The vast bulk of social wealth in Britain and the rest of the world is produced, distributed and administered by the wage and salary slaves who comprise the working class. But it is one of the great ideological achievements of Thatcherism that the reality of this situation continues to be inverted in a large number of peoples’s minds. Instead of the owning capitalist class being seen as a bunch of socially useless scroungers they are revered as the “real achievers” in society, possessing a mystical quality known as entrepreneurial skill.
Contrary to the Tory ideal, Britain has not been transformed from a “give it to me” society then — although this is not because so-called lazy workers still exist. It is because we, the working class, hand over the products of our labour to the capitalists who then sell them on the market with a view to making profit. We are living in a “give it to me” society but it is the working class that does the giving and the capitalist class that does the taking!
When Thatcher talks of “getting up and going for it” she is of course referring to budding members of the owning class, who do not need to get up at seven o’clock in the morning and go to work! The capitalists are really the “sit back and wait for it” class, as having invested their capital all they need do is sit back and wait for the profits to roll in. All governments, whether of the left or the right, have perpetuated the myth of capitalists as the achievers of society, and none has done so with more vigour than the three Thatcher administrations. The reality is that the capitalist class are not the achievers and creators of society but. to use Marx’s term, the “functionaries of capital”. Achieving and creating is the lot of the workers.
Just in case the working class doesn’t fall for the Government’s nonsense about who creates the wealth in society, the Conservatives have one more trump card to play. This is the idea that there has been some sort of miracle in the performance of the British economy which has benefitted virtually everyone, irrespective of class. As you might expect, the entrepreneurs have been in the forefront of this “miracle” in their creation of the new “business culture”. but they have apparently been ably assisted in the pursuit of their historic task by the far-sighted policies of successive Thatcher governments. Or so they like to tell us.
Indeed, Government Ministers have argued that unlike the bad old days of the 1960s and 70s, inflation has been falling since Thatcher came to office, that unemployment is falling after the deepest depression since the 1930s, that output and productivity have risen faster than in any other Western European country, and — momentary aberrations excepted — strikes are a thing of the past. We’re also told that we’ve all been made richer and freer by the benefits of privatisation and so-called “popular capitalism”. Even if these claims were shown to be true, it would be necessary to ascertain what benefit, any, there has been for the working class. However, most of them are patently false.
Inflation, the main policy concern of the Thatcher governments, is a strikingly obvious example of the hollowness of their claims. The Conservative Party election manifesto of 1979 stated that:
Under Labour prices have risen faster than at any peacetime period in the three centuries in which records have been kept. The pound today is worth less than half of its 1974 value. On present form it would be halved in value yet again within eight years. Inflation on this scale has come near to destroying our political and social stability. To master inflation, proper monetary discipline is essential with publicly stated targets for the rate of growth of the money supply.
The Tory boast that they have been able to deal with inflation is entirely bogus as the value of the pound has been halved yet again since 1979. In fact within a year of the Conservatives gaining office the Retail Price Index was showing average price rises of 21.9 per cent and it has averaged over 7 per cent in the years since. This has been a higher increase in the general price level than occurred under any other post-war government, with the exception of the last Labour one.
All three Thatcher administrations have continued the post-war policy of issuing an excess of inconvertible paper currency. The Retail Price Index has actually seen a dual effect for much of the period since 1979. for while the Treasury has been instructing the Bank of England to issue even more notes and depreciate the value of the currency further, there has been a general downward trend in world commodity prices caused by the depression of the late 1970s and early 1980s. If the Government hadn’t been issuing an excess of notes and coins it is likely that, instead of price increases at the 3 or 4 per cent mark they reached a few years ago. prices would actually have been falling — just as they did in capitalism’s depressions before the Second World War.
The Conservatives under Thatcher have never stated, despite their anti-inflationary rhetoric, that they are after a situation where the value of the currency is appreciating instead of depreciating — leading to falling prices. This is partly because sections of the capitalist class (particularly borrowers) favour inflation, for although interest rates rise when other prices do they tend to do so to a lesser extent. The biggest borrowers are the industrial and agricultural sections of the capitalist class, who have significant clout both as pressure groups on the government of the day and supporters and financiers of the Conservative Party.
Especially important is the fact that falling prices put the capitalist class as a whole in a difficult position when it comes to wage bargaining. Putting the onus on trade unions to restore real wage levels in a time of inflation is much easier than pleading with them to take pay cuts when prices are falling.
Now that price rises have reached the 8 per cent mark again (the level they were at when Thatcher attained office) the Chancellor argues not that this is a blight on society which threatens social stability, but that it is a product of success. Using pre-1979 accounting methods, the total number of unemployed in Britain is still around the two and a half million mark, yet we are told the economy is ‘overheating’ and that this has had an adverse effect on the RPI. This is only true, of course, to the extent that commodity prices are rising again now that the economy is slowly coming out of the slump — and this has had nothing to do with government policy here or anywhere else.
In the depth of the last recession the Government argued (correctly for once) that high unemployment and slow rates of growth had little to do with them as capitalism was in the slump phase of its trade cycle. All they could do was let it take its course. But now that the unemployment total is gradually on its way down (aided and abetted by over twenty changes in the way the figures have been calculated) the Government claims that this has been a product of their economic policies. Indeed. Conservative politicians such as Lord Young and Norman Tebbit have often argued that the greatest success of the Thatcher governments has been the increases in output and productivity that have occurred in recent years. It is true that Britain, according to the Government’s figures, has seen output rise at a higher rate during the last 3 or 4 years than other European countries, and this has led Tory spokesmen to hail their promotion of ‘entrepreneurial spirit’ and their attacks on the trade unions as a great success. The actual situation, as you might imagine, is rather more modest; averaging increases of output in Britain over the last 10 years, the rise is really no greater than other ten-year periods from recent economic history (for example 1969-79).
What is more important from the working class point of view is that, even in phases of the capitalist trade cycle when output and productivity have been rising, all sectors of society do not automatically benefit. The working class is responsible for increased production of goods but has to struggle to obtain any benefit from this changing situation — and the owning class, needless to say, try to stop this from happening. For instance, most of the industrial and employment legislation of the Thatcher Government was designed to reduce the effectiveness of trade unions and therefore restrict workers’ abilities to offset both the depreciation of real wages due to inflation, and attempts to obtain benefits from increased productivity. Thankfully, this industrial legislation hasn’t been nearly as effective as the Tories hoped, and most members of the working class who have managed to hang on to their jobs have seen their real wages increase.
Indeed, ever aware of the potential power of an organised working class, the Conservatives have attempted to use aspects of their economic policy to diffuse the class struggle. The most notable of these has been the privatisation of state-owned sectors of the economy along with the promotion of “popular capitalism”. The 1987 Conservative General Election Manifesto stated:
Britain is now in the forefront of a world wide revolution in extending ownership. One in five British adults now own shares compared to one in ten Frenchmen and one in twenty Japanese. Owning a direct stake in industry not only enhances personal independence, it also gives a heightened sense of involvement and pride in British business. More realistic attitudes to profit and investment take root and the foundations of British economic achievement are further strengthened.
The hope is that workers swallow the crazy idea that anyone with a few hundred shares in British Telecom or the TSB is a member of the privileged owning class and therefore has profits as their main priority. Although it is often claimed that people have fallen for this propaganda of “popular capitalism”, every time workers fight for improved pay and conditions they are still, of necessity, proving that their real interests are those of wage labour rather than capital. People with a few hundred shares are no more members of the capitalist class than those people who have interest bearing accounts with banks or building societies. They cannot live off the tiny amount of capital that accrues to them and are still forced to sell their abilities to an employer in order to live.
At the moment, “popular capitalism” and the “economic miracle” are both in trouble. In a recent letter to ex-Chancellor Lawson, the Chairman of the International Stock Exchange, Andrew Hugh Smith, stated:
Even though the level of share ownership has grown enormously, the percentage of shares held by private investors continues to fall and is now around 20 per cent . . . this trend damages the Government policy on share ownership. (Guardian, 23 October).
What is more, in the light of the share price crashes of October 1987 and 1989, the notion of “popular capitalism” as one long gravy-train has been dented further. And with millions on or below the Government’s official poverty line, with unemployment still really at slump levels and with house repossessions on the horizon for thousands struggling with their mortgage repayments, the working class has been confronted with an “economic miracle” that is a complete mirage.