How we are still paying for fear of Corporatism in the 1970s.

Life as a Burden on Money

By Gwydion M. Williams

  • How Trade Unions are playing a heavy price for their excessive fear of Corporatism in the 1970s.
  • Why the Coalition’s policies are not about freedom but about a planned policy of ‘Feed the Rich’.

The Coalition’s budget cutting goes way beyond anything needed by the Britain’s modest state debts. It is based on a view of the world that sees money as the key to everything. Opponents must not accept the enemy’s terminology and say ‘Free Market’. When they say ‘free’ they mean their sort of freedom, freedom for the things they value. ‘Feed the Rich’ would be a much better description of the policies that Thatcher began, Blair and Brown bowed down to and the Coalition now pursue with ignorant enthusiasm.

Freedom is always socially defined. The ‘Free World’ in the early days of the Cold War praised itself as a repository of virtue without much concern about large number of non-white colonies held in subjection. Colonial wars in Indochina, Malaya, Kenya and Algeria could be justified in those terms. The USA up until the early 1960s felt very content with itself despite segregation in the South, criminal intimidation to prevent Afro-Americans voting in the South and racism throughout the society. At that time, the rights of women were much more advanced in the ‘unfree’ countries of the Soviet Bloc than in the ‘Free World’.

***

The 1960s changed many things, mostly for the better. In the West, the Youth Revolt basically succeeded, with fringe values becoming mainstream. An equally valid shift in the Soviet Bloc was smashed by the 1968 invasion of Czechoslovakia.

The USSR had been very successful economically under Stalin. It should have then moved on, as China did after Mao. Instead it engaged in an incoherent ‘de-Stalinisation’ that made no particular sense, discrediting the system without actually changing it.

Leninism has given rise to a great many highly effective political movements. But there has been no effective Leninist movement that saw any marked difference between Lenin and Stalin. The history of both the numerous Trotskyist fragments and the main pro-Moscow Communists show that those who based their politics on the supposed difference achieved nothing politically, fail in the long run to hold what they have. And the former Soviet Union was wide open to Solzhenitsyn exposing the continuity. They should simply have defended the past as being justified in the context: the senseless slaughter of the Great War, and then the need to build a strong economy before the growing forces of Fascism invaded.

Post-Stalin Russia dismantled a highly successful planned economy. They moved to something described as Market Socialism, but which would be better described as a Bureaucratic Commodity System, which proved very bad. After the Soviet collapse they turned against their own past and started copying blindly from the West. But in Russia, Fundamentalist Capitalism with no social restraints was even worse than Brezhnev’s ‘Period of Stagnation’. The economy shrank and like expectancy slumped, with the population actually shrinking. In politics, Yeltsin set a horrible example by shelling his own parliament during a dispute that could probably have been solved by negotiation. One of his main opponents was a Chechen who was happy to work within the broader framework of the Russian Federation. That man was swept aside: the Chechens turned to separatism and banditry.  Two groups of broadly pro-Western liberals existed as a significant force in Russian electoral politics in the 1990s and both have vanished into well-deserved oblivion, failing to cooperate even when this might have been a path to survival. Russian Communism revived, only Yeltsin’s final phase prevented them getting re-elected. That and Putin’s succession and re-assertion of Russian interests. He’s probably prevented a much more drastic rejection of western values, either a restored Communism or some sort of Russian Fascism. But all you get from the mainstream Western media are protests, “how dare he deal with Russian realities instead of sticking to the West’s failed fantasies.

***

To return to Britain, in the 1970s, working people in Britain were offered a major advance and turned it down. Workers Control would have made employees equal ‘stakeholders’ with the owners of the business. Incomes Policy would have meant the society as a whole taking responsibility for fairness and deciding who earned what. This was the deal offered by the Tories under Edward Heath, and repeated in an improved form by Labour under Wilson and Callaghan. It wasn’t defeated by the right, which at that time was demoralised and timid. It was defeated by the left.

The opposition was based on two rival delusions:

  • The traditionalists thought that the excellent system that had been built after World War Two could continue for ever. That it would be successfully assaulted and cracked open in the 1980s was outside their understanding of the world. But the world is never limited by the limits of human understanding.
  • The Hard Left saw the deal as a sell-out to capitalism. It was true that what was on offer didn’t promise immediate socialism. But if it had been taken up it would have been a huge step forward. It would have kept a large mass of sympathisers encouraged that things were getting better. The Hard Left rejected this, in the belief that they could get something much better if this weak reformism was avoided. They turned out to be bunch of vain little fools.

The left in Britain was paralysed by fear of accepting formal limits and state role. It is notable that successful political movements since the 1960s have shown no such fear: have sometimes demanded a much larger state role in particular areas. This applies most notably to the Feminist, Green and Gay movements. They are not state-worshipers, but they accept that practical politics means that you work with the state, seeking to modify its role. The state is an agency to get things done, and to maintain coherence in a society where everyone interacts all the time and you are routinely dependent on strangers. Mainstream Leftist fear of the state has led to 30 years of economic error and loss.

The left had had an attitude of “don’t take ‘yes’ for an answer”. Sensible reforms were opposed because they did not offer an immediate and total solution. The New Right did always stick to the possible. They met the desire for both individualism and stability by promising both. Such promises made the New Right project a bit of a ‘Ponzi scheme’, but it has not yet collapsed.

Thatcher fed on the discontent of the 1970s and the Leftist fear of the state. People were ready to change existing values. The actual changes – the withdrawal of the state from many areas – hasn’t restored old-fashioned values. It could not restore the Bourgeois Respectability that made the system viable in the 19th century. People close to Thatcher were on the whole a lousy example of Bourgeois Respectability. Jeffery Archer was typical of them in having a huge admiration for cheats and cheap crooks.

If Thatcher had been a proper Tory, something very different might have resulted. A proper Tory might have saved a lot more of the old values. That didn’t happen. New Right policies have worked by feeding on greed and selfishness. That’s not wealth-creating or decency-creating. Old-fashioned values that were under threat in the early 1980s are now pretty much dead: this was obviously not Thatcher’s intention but it was the predictable result of her work.

The ‘Big State’ is denounced as an anomaly. The real anomaly is that huge chunks of human life have been reduced to the ‘cash nexus’, exchanges between strangers with social values marginalised. It’s not a human way to live. And it’s not even given us more material wealth. Britain’s economic record 1975-2000 was slightly worse than 1950-1975.

The Thatcherite ‘revival’ did more harm than good. And while Thatcher did genuinely believe in old-fashioned decency, she hadn’t the least idea how to defend it and actually let it wither and die. ‘Good riddance’, a lot of people will say (including some Tories, though mostly not in public.) But we also need some sort of public morality, even though the Judeo-Christian view of sex and marriage has been rejected by a majority and even those who practice it for themselves don’t mostly want the law to impose it on others.

***

Globally, the advanced economies no longer have Ruling Classes in the way they used to. Instead there is an “Overclass” that is pervasive but weak. It rules because the mass of the people distrust government. It feeds on ordinary people’s desire for Empowerment and the delay in responding to it. But it doesn’t actually empower more than a small minority.

Empowerment by Self-Interest was supposed to do the trick. It was also supposed to be Enlightened Self-Interest, but mostly it was not. More generally, the defects of this system were

a) It could be you but probably will not

b) Even if you do something major you may get little reward. A surprisingly large number of those who did work of long-term benefit to humanity got little out of it in terms of cold cash.

c) Achieving financial success damages many, and favours many who were already maladjusted.

d) You end up with a very nasty world in which everyone mistrusts everyone else, and religious fervor of the sort that seemed to be dying in the 1960s is reviving all over the world.

Up until the crisis of 2008, the financial system seemed to be generating ‘free money’. Actually money flowing out of the financial system has to come from somewhere, and the voids left behind by the money flowing out of the financial system in bonuses and hedge-fund profits were exposed in dramatically in the crisis, which remains unresolved. Bankers can generate a little extra wealth by reducing transaction costs, but they have mostly flourished by consuming the essentials of the system, reducing its usefulness.

Across the North Atlantic area, the weakened financial system was bailed out by the state or by several governments working together. This should have been taken as proof that capitalism independent of the state was not in fact possibly in the modern world. But once the media had dampened down the vast anti-state prejudice for long enough to prevent a financial collapse, it was re-started to justify a new round of cuts. And Britain, unfortunately, has largely accepted it. Britain seems locked into a pattern of decline that’s very similar to other fallen Empires, you know something is wrong but the answer is always more of the same failed remedies. It could well go on for decades. It could well include more pointless wars like the one currently being waged on Libya.

On the other hand, the world looked pretty dismal in the mid-1930s, and did indeed get worse, but then drastically better. The game is still worth playing.

 

First published in Labour & Trade Union Review, 2011

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