From
David Harvey's A
Brief History of Neoliberalism
Part
10 – How Margaret Thatcher systematically destroyed the British
industry along with the trade unions
While
there were many elements out of which consent for a neoliberal turn
could be constructed, the Thatcher phenomenon would surely not have
arisen, let alone succeeded, if it had not been for the serious
crisis of capital accumulation during the 1970s. Stagflation was
hurting everyone. In 1975 inflation surged to 26 per cent and
unemployment topped one million. The nationalized industries were
draining resources from the Treasury.
This set
up a confrontation between the state and the unions. In 1972, and
then again in 1974, the British miners (a nationalized industry) went
on strike for the first time since 1926.
The
miners had always been in the forefront of British labour struggles.
Their wages were not keeping pace with accelerating inflation, and
the public sympathized. The Conservative government, in the midst of
power blackouts, declared a state of emergency, mandated a three-day
working week, and sought public backing against the miners. In 1974
it called an election seeking public support for its stand. It lost,
and the Labour government that returned to power settled the strike
on terms favourable to the miners.
The
victory was, however, pyrrhic. The Labour government could not afford
the terms of the settlement and its fiscal difficulties mounted. A
balance of payments crisis paralleled huge budget deficits. Turning
for credits to the IMF in 1975–6, it faced the choice of either
submitting to IMF-mandated budgetary restraint and austerity or
declaring bankruptcy and sacrificing the integrity of sterling, thus
mortally wounding financial interests in the City of London. It chose
the former path, and draconian budgetary cutbacks in welfare state
expenditures were implemented. The Labour government went
against the material interests of its traditional supporters. But
it still had no solution to the crises of accumulation and
stagflation. It sought, unsuccessfully, to mask the difficulties by
appealing to corporatist ideals, in which everyone was supposed to
sacrifice something for the benefit of the polity.
Its
supporters were in open revolt, and public sector workers initiated a
series of crippling strikes in the ‘winter of discontent’
of 1978. ‘Hospital workers went out, and medical care had to be
severely rationed. Striking gravediggers refused to bury the dead.
The truck drivers were on strike too. Only shop stewards had the
right to let trucks bearing “essential supplies” cross picket
lines. British Rail put out a terse notice “There are no trains
today” . . . striking unions seemed about to bring the whole nation
to a halt.’
The
mainstream press was in full cry against greedy and disruptive
unions, and public support fell away. The Labour government fell, and
in the election that followed Margaret Thatcher won a significant
majority with a clear mandate from her middle-class supporters to
tame public sector trade union power.
The
commonality between the US and the UK cases most obviously lies in
the fields of labour relations and the fight against inflation. With
respect to the latter, Thatcher made monetarism and strict budgetary
control the order of the day. High interest rates meant high
unemployment (averaging more than 10 per cent in 1979–84, and the
Trades Union Congress lost 17 per cent of its membership in five
years). The bargaining power of labour was weakened.
Alan
Budd, an economic adviser to Thatcher, later suggested that ‘the
1980s policies of attacking inflation by squeezing the economy and
public spending were a cover to bash the workers’.
Britain created what Marx called ‘an industrial reserve army’,
he went on to observe, the effect of which was to undermine the power
of labour and permit capitalists to make easy profits thereafter. And
in an action that paralleled Reagan’s provocation of PATCO in 1981,
Thatcher provoked a miners’ strike in 1984 by announcing a wave of
redundancies and pit closures (imported coal was cheaper).
The
strike lasted for almost a year, and, in spite of a great deal of
public sympathy and support, the miners lost. The back of a core
element of the British labour movement had been broken. Thatcher
further reduced union power by opening up the UK to foreign
competition and foreign investment. Foreign competition demolished
much of traditional British industry in the 1980s –– the steel
industry (Sheffield) and shipbuilding (Glasgow) more or less totally
disappeared within a few years, and with them a good deal of trade
union power.
Thatcher
effectively destroyed the indigenous nationalized UK automobile
industry, with its strong unions and militant labour traditions,
instead offering the UK as an offshore platform for Japanese
automobile companies seeking access to Europe. These built on
greenfield sites and recruited non-union workers who would submit to
Japanese-style labour relations.
The
overall effect was to transform the UK into a country of relatively
low wages and a largely compliant labour force (relative to the rest
of Europe) within ten years. By the time Thatcher left office,
strike activity had fallen to one-tenth of its former levels. She had
eradicated inflation, curbed union power, tamed the labour force, and
built middle-class consent for her policies in the process.
Comments
Post a Comment