February 17, 2009


All of us live by the logic of finance: Margaret Thatcher promised wealth for all in her new society. First, though, we all had to become capitalists. (Peter Wilby, 05 February 2009, New Statesman)

In the 1930s, the majority of Britons had not bought (I use the verb deliberately) into capitalism as they have over the past 30 years. Working-class families then accounted for three-quarters of the population, but less than one-fifth owned their home. Few held a bank account and almost none invested in shares or bonds, either directly or through pension schemes. For most of these families their only insurance was against funeral expenses.

Working-class life was based on cash, with surplus income, rare at the best of times, converted into portable possessions. Debt was widespread - it was sometimes the only way a working-class family, even if it had a regular income, could buy new clothes or shoes - but it was small-scale and local. Many were accustomed to existing on the margins of subsistence, and the dole, pitiful as it was, ensured that the Depression just made life more of a struggle. It did not frustrate ambition or aspiration, because most ordinary people had none. The consumer society had not been invented.

The Britain of 2009 is utterly different. The country was changed profoundly by Thatcherism (as the United States was changed by Reaganism), often in ways that were scarcely noticed at the time and are now forgotten. [...]

The new order followed the collapse in the 1970s of the postwar economic and social consensus, known as Keynesianism. Trade unions were weakened, partly by legislation, partly by the decline of heavy manufacturing industry. Labour could no longer drive a hard bargain.

Capital, assisted by deregulation of money movements across borders, held the whip hand. Under the Anglo-Saxon economic model, employers could now hold down wages - if necessary by relocating or threatening to relocate abroad - shed jobs and require longer hours and/or more productivity from their workforces. Faced with the devaluation of their labour, working people had to try and get a slice of the capitalist action. Money, they had to learn, no longer stopped with the wages generated from employment. As Randy Martin, the New York University public policy specialist, puts it in his illuminating book Financialisation of Daily Life (2002), "what once belonged to the workaday world beds down with leisure and domesticity".

This was exactly what Margaret Thatcher wished for. Once, western governments tried to subjugate the working class. The governments of the postwar era, by contrast, tried to pacify it. High wages, good working conditions, decent housing, stable employment, predictable pensions and, crucially, the power of a large state sector to head off deep recession through fiscal intervention delivered the workers’ consent to, even enthusiasm for, a capitalist economy. It also ensured the stable domestic markets that provided the basis for unprecedented economic growth. As the student rebels of 1968 understood, the workers were required not just to produce goods but to consume them, too.

Thatcher offered what you might call a "third way". The working class was not to be enslaved or tamed, but abolished. Everyone would become, in their private if not in their working life, a member of the bourgeoisie, owning a house, acquiring debt to improve themselves, trading in shares and bonds. With such financial commitments, they would be reluctant to sacrifice regular income by going on strike.

Better still, they would vote Conservative, or at least for an alternative party that accepted, as new Labour did, the broad principles of Thatcherism. The spectre of communism or socialism would be exorcised.

That's what she and W understand, while the Right gripes about the "undeserving" homeowners.

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Posted by Orrin Judd at February 17, 2009 6:22 AM
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