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CHAPTER 1

We Never Bought the Dream

The working class is instinctively, spontaneously social democratic.

Vladimir Lenin

At the end of the 1980s events had come together to create a moment of triumphalism for the Western ruling classes. During the decade, in the USA, Britain and elsewhere, governments and employers had won a series of decisive battles against organised workers. Humiliation in these high profile conflicts sapped workers' enthusiasm for resistance and cleared the way for the dismantling of large parts of the welfare state. Private capital bought out nationalised industries at knockdown rates. Union busting, privatisation and restructuring ripped through society, restoring profit rates, if not productivity. Internationally, a debt crisis had landed a tranche of developing world economies in the laps of the Western banks. At the end of the decade economic failure and discontent led to the collapse of the Eastern European satellites of the USSR. The meltdown of the Soviet Union's state-run economy was clearly imminent.

It was possible to announce a historic victory for the forces of the free market – and the Western democratic model that was apparently its purest political incarnation. When, in a 1989 essay, American political scientist Francis Fukuyama announced the 'end of history', he wasn't saying that nothing more would happen in the world. He was claiming liberal democracy as the 'final form of human government'. 'At the end of history,' he wrote, 'it is not necessary that all societies become successful liberal societies, merely that they end their ideological pretensions of representing different and higher forms of human society'.

This triumphalism had a profound effect on intellectual life. The victory of an economic paradigm was judged to have buried alternatives and ushered in a world beyond ideology in which reason and the free market had synchronised. American commentator and historian Thomas Frank noted that, for some, the free market came to define what it meant to be human:

Only when people act within the marketplace, such thinkers told us, do they act rationally, chose rightly and make their own wishes known transparently. Only then could business give us what we wanted, cater to our freely expressed choices. Markets are where we are most fully human; markets are where we show that we have a soul. To protest against markets is to surrender one's very personhood, to put oneself outside the family of mankind.

Outriding

Britain was an early adopter. Margaret Thatcher, prime minister from 1979 to 1991, was one of the great champions of the free market economics that became known as neoliberalism. At its heart initially was a tight monetary policy to counter rising inflation, antipathy to the 'nanny state' and a deep hostility to working-class organisation. But it evolved into an assault on all the ways that the state had accommodated the demands of working people since World War Two and on the manufacturing base of British capitalism. Rhetorically, Thatcher went one better than Fukuyama, claiming in an interview with Woman's Own two years before the latter's end of history moment that 'there is no such thing as society', just 'individual men and women and their families'. The aim clearly was to discredit collective organisation and ideas, but the guiding thought was that they had been made redundant in a post-ideological world. The impersonal mechanisms of the market were delivering an ideal end-state for human civilisation.

Faced with retreat and rollback on what felt like every front, some of the left internalised this onslaught. In particular, a group of influential intellectuals around the journal Marxism Today popularised the idea of 'new times'. They gave ground to the free market lobby by arguing that capitalism had indeed entered a new phase in which consumerism dominated so effectively it was dissolving class identities. The right had seen the future and run with it, the left had to adapt or die. In the words of one such essay from 1988:

For more and more people it is outside work, outside the formal political structures, in the world of holidays, home interiors and superstores, that they have a sense of power and freedom to express themselves, to define their sense of self, to mould the good life. Thatcherism has not created that scenario, but the current present political culture has certainly capitalised on it. On the current climate the invitation is to 'buy out of politics', to see it only as to do with restrictive bureaucracy and petty nuisance. Life it seems, lies elsewhere.

In the memorable words of the most notable proponent of 'new times', Stuart Hall, 'capital' was marching 'simultaneously across the globe and through the Maginot Lines of our subjectivities'. The sense that the logic of commodity had invaded every aspect of our lives, influencing our behaviour and colonising the way we think and feel, remains influential on the left 30 years later. In his 2010 account of the neoliberals' coming to power, Jamie Peck's starting point is that:

The conventional wisdom can seem ubiquitous, inevitable, natural, and all-encompassing. To many, neoliberalism has become practically indistinguishable from the alleged "logic" of globalization – it seems to be everywhere, and it seems to be all that there is.

The tale of how ideological 'outriders' successfully promoted the neoliberal creed in the corridors of power has been well told recently. Conversion wasn't automatic even amongst the elites; as late as the mid-1980s Margaret Thatcher was still fighting a war against 'the wets', so-called 'One Nation' Tories concerned about the political and social costs of the new model. But the story of neoliberalism's roll-out in wider society is much more about imposition and confrontation than persuasion or incorporation. This story, combined with evidence about popular attitudes at the time, casts doubt on the idea of neoliberal capitalism's total ideological victory. It suggests that the paradigm, in fact, prevailed through a combination of a state strategy of class struggle, some good fortune for Thatcher and her supporters and shortcomings on the part of the opposition.

Labour and the damage done

The British ruling class adopted the new economics piecemeal and pragmatically as a result of the failure of the existing model. A broad social radicalisation at the end of World War Two had eventually forced a cross-party consensus that a mixed economy combining elements of state and private ownership was necessary for economic development. As Britain moved into the long boom, it was possible to meet some working-class aspirations through public spending on housing, health and welfare. But growth rates started to decline at the end of the 1960s, and slumped in the 1970s. For a time, governments met workers' continuing demands by printing additional money, not yet covered by the real economy. They ran into problems in the early 1970s. Inflation more than doubled to 24.6% between 1973 and 1975, and unemployment reached a million by 1975. From the point of view of the capitalist class, inflation was the result of wage demands that couldn't be paid for by current levels of profit.

The slowdown in growth was international, the product of an end of the effects of huge levels of arms spending which had offset a long-term decline in profits. But Britain's economic performance was exceptionally poor, due to low levels of investment and a resulting slide in productivity. As a contemporary economist explained, 'whereas in 1870 Britain enjoyed the highest productivity amongst the major capitalist economies, by 1970, it had one of the lowest'. The turn towards tight money and cutbacks was in fact instigated by Labour. In the words of Financial Times journalist, Peter Riddell, 'If there has been a Thatcher experiment, it was launched by Denis Healey'. Healey was the chancellor in the 1974-9 Labour government which, despite promises of state intervention and redistribution, cut public spending by 9.5% from 1976 to 1978. This was far more draconian than anything Thatcher managed. At Labour's conference in 1976, prime minister Callaghan dramatically renounced the Keynesian project:

We used to think you could spend your way out of a recession, and increase employment by cutting taxes and boosting government spending. I tell you in all candour that option no longer exists, and that in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment.

The Labour government then proceeded to negotiate an incomes policy that had a devastating impact on workers' living standards. In 1977 an Observer economist commented:

The past twelve months have almost certainly seen the sharpest fall in real living standards of Britain's working population in any year for at least a century, including the wars. Indeed to find a comparable fall, it will probably be necessary to go back to the eighteenth or early nineteenth centuries.

The Callaghan government was able to do this because of its close relations with the trade union leaders. Union leaders were all committed to Labourism, and when faced with a Labour government in economic trouble, they could see no alternative but to help bail it out. And the impact of Labourism on workers' organisation ran deeper. The shop stewards' networks that had helped organise industrial struggle strong enough to bring down the previous Tory government were drawn into a strategy of industrial participation. This involved collaborating with management, state and private, and it removed many of them from the shop floor, making them more open to the perspectives of the boardroom. The key structures of the trade unions failed to defy the logic of retrenchment.

But if much of the official labour movement reluctantly accepted the need for restraint, the rank and file would not. In 1979, after three years of punishing pay cuts, ordinary trade unionists rebelled in what came to be called the 'winter of discontent'. Local government workers and lorry drivers led the way with indefinite action in a massive wave of strikes. There were more strike days 'lost' in 1979 than at the height of the anti-Tory resistance in 1972. The country was brought to a virtual standstill. But despite this inspirational self-activity, the context was very different from the heady days of the early 1970s. Labour's capitulation to market logic and its failure to meet aspirations for change had created uncertainty and demoralisation across the board. Some of the radical left effectively supported Labour's line, and influenced networks of solidarity already weakened by participation and sectionalism. The left and the movement reached an impasse that couldn't be overcome by straightforward trade union militancy.

Force and fraud

This was the situation that Margaret Thatcher brilliantly exploited to win the 1979 election. Given Labour had accepted the logic of a tight fiscal policy and attacks on workers' living standards, it was possible for the new leader of the Tory Party to blame the strikers for the chaos and Labour for going soft on them. But exploiting a difficult moment for the Labour movement was not the same as winning consent for an allout onslaught on the working class. The cutbacks that she introduced on gaining office were mild by her later standards, but they generated deep opposition. By 1981, polls showed that she was running the most unpopular government since records began, with an approval rating of just 16%. Across Britain, a cycle of riots expressed anger at the police and outrage at the damage inflicted on urban communities by the new regime.

A number of things saved her. First, Labour was sabotaged by a right-wing split from the party. Four leading MPs quit the party in 1981, claiming it was too left wing, and formed the so-called Social Democratic Party. This fatally split the anti-Tory vote in the 1983 and 1987 elections. In the 12 months of internecine warfare that followed the split, Labour's polling halved from 47.5% to 23.5%. Second, Thatcher was assisted in the 1983 election by whipping up jingoism around the Falklands War. More generally, Thatcher's privatisations, the destruction of swathes of industry and her ideological aggression had a demoralising impact on organised workers already reeling from the experience of the Labour government. Cheap council house sell offs and a series of bargain basement share offers lent some short term credibility to her free market bluster. By 1987, voter turnout had started to decline and in that year's election, 60% of trade unionists voted for someone other than Labour. As one historian of the Tory Party put it:

Thatcher didn't win elections because she won a majority of people to her cause (she didn't) or because she was personally popular (she wasn't). She delivered them because her governments delivered just enough tangible benefits to just enough voters at just the right time in order to defeat an opposition whose record was woeful.

But none of this could have happened without two other things. The first was a conscious and coordinated assault on the organised working class aimed at eradicating its fighting spirit, breaking up its organisation and proving by example that resistance was futile. The strategy had been planned during the years of opposition. Its architect, Sir Nicholas Ridley, recommended picking well-prepared confrontations with key groups of workers while criminalising all forms of solidarity. The set piece of the 'Ridley Plan' was the confrontation with the coal miners that began with the Coal Board's provocative closure of 20 pits in March 1984. The government had prepared by stockpiling coal, reorganising the police force and mobilising agents provocateurs and high level surveillance. Energy Secretary Nigel Lawson compared the operation to 're-arming to face the threat of Hitler in the 1930s'.

The Great Miners' Strike was the longest major strike in European history and involved heroic levels of organisation and solidarity. It was hugely popular amongst most workers precisely because it was seen as a struggle against Thatcher's government and everything it stood for. Trade unionists and socialists organised support groups in every corner of the country, which collected huge amounts of money, food and other essentials to sustain the strikers. There were times during the dispute when Thatcher felt the government might lose the strike, in particular during the summer of 1984, when it looked as if the dockers might open up a second front. Defeat was sealed by the failure of the working-class movement to turn the mood of solidarity into effective action, despite the best efforts of thousands of activists. The Labour leadership never supported the strike and did everything it could to undermine support and distance itself from the strike. The leaders of the trade unions never defied the ban on solidarity action, and the left and the rank and file were not able to deliver sufficient action independently. A devastating defeat, the miners' strike was followed swiftly by assaults on other key groups of organised workers, in particular the printers at Rupert Murdoch's News International. Once again resistance was impressive. The printers struck against new technology and massive redundancies for 54 weeks, and the movement mounted a series of big marches, protests and pickets at Murdoch's new Wapping plant. But once again, practical solidarity never reached the levels necessary to turn the tables on a more and more confident employing class.

Fantasy realism

The second crucial component in Thatcher's success was the Labour leadership's embrace of some of her pet ideas. By the second half of the decade the Labour leadership under Neil Kinnock was in full ideological flight, not just distancing itself from any kind of trade union resistance, but ditching support for nationalisation and increased public spending. Kinnock and his coterie were learning to love the free market. In the run-up to the 1987 election, Brian Gould, campaign manager and guru of the new turn, was arguing 'the idea of owning shares is catching on, and as socialists we should support it as one means of taking power from the hands of the few and spreading it more widely', and in a key document for the election 'New jobs for Britain' Kinnock himself wrote:

We need a workforce that wants to be on the winning side, but we also need those who can manage – and manage to make it all work ... the days of 'Them' and 'Us' are gone now. We are in all this together, and it is only together that Britain will make its way in the world.

(Continues…)

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Excerpted from "How the Establishment Lost Control"
by .
Copyright © 2017 Chris Nineham.
Excerpted by permission of John Hunt Publishing Ltd..
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