From
David Harvey's A
Brief History of Neoliberalism
Part
11 – The Reagan/Thatcher neoliberal legacy: a bizarre form of a
sinister political doctrine from which it would be difficult one to
escape
But
Thatcher had to fight the battle on other fronts. A noble rearguard
action against neoliberal policies was mounted in many a municipality
–– Sheffield, the Greater London Council (which Thatcher had to
abolish in order to achieve her broader goals in the 1980s), and
Liverpool (where half the local councillors had to be gaoled) formed
active centres of resistance in which the ideals of a new municipal
socialism (incorporating many of the new social movements in the
London case) were both pursued and acted upon until they were finally
crushed in the mid-1980s.
She
began by savagely cutting back central government funding to the
municipalities, but several of them responded simply by raising
property taxes, forcing her to legislate against their right to do
so. Denigrating the progressive labour councils as ‘loony lefties’
(a phrase the Conservative-dominated press picked up with relish),
she then sought to impose neoliberal principles through a reform of
municipal finance. She proposed a ‘poll tax’ –– a
regressive head tax rather than a property tax –– which would
rein in municipal expenditures by making every resident pay. This
provoked a huge political fight that played a role in Thatcher’s
political demise.
Thatcher
also set out to privatize all those sectors of the economy that were
in public ownership. The sales would boost the public treasury and
rid the government of burdensome future obligations towards losing
enterprises. These state-run enterprises had to be adequately
prepared for privatization, and this meant paring down their debt and
improving their efficiency and cost structures, often through
shedding labour.
Their
valuation was also structured to offer considerable incentives to
private capital –– a process that was likened by opponents to
‘giving away the family silver’. In several cases subsidies were
hidden in the mode of valuation –– water companies, railways, and
even state-run enterprises in the automobile and steel industries
held high-value land in prime locations that was excluded from the
valuation of the enterprise as an ongoing concern.
Privatization
and speculative gains on the property released went hand in hand. But
the aim here was also to change the political culture by extending
the field of personal and corporate responsibility and encouraging
greater efficiency, individual/corporate initiative, and innovation.
British Aerospace, British Telecom, British Airways, steel,
electricity and gas, oil, coal, water, bus services, railways, and a
host of smaller state enterprises were sold off in a massive wave of
privatizations.
Britain
pioneered the way in showing how to do this in a reasonably orderly
and, for capital, profitable way. Thatcher was convinced that once
these changes had been made they would become irreversible: hence the
haste. The legitimacy of this whole movement was successfully
underpinned, however, by the extensive selling off of public housing
to tenants. This vastly increased the number of homeowners within a
decade. It satisfied traditional ideals of individual property
ownership as a working-class dream and introduced a new, and often
speculative, dynamism into the housing market that was much
appreciated by the middle classes, who saw their asset values rise ––
at least until the property crash of the early 1990s.
Dismantling
the welfare state was, however, quite another thing. Taking on areas
such as education, health care, social services, the universities,
the state bureaucracy, and the judiciary proved difficult. Here she
had to do battle with the entrenched and sometimes traditional
upper-middle-class attitudes of her core supporters.
Thatcher
desperately sought to extend the ideal of personal responsibility
(for example through the privatization of health care) across the
board and cut back on state obligations. She failed to make rapid
headway. There were, in the view of the British public, limits to the
neoliberalization of everything. Not until 2003, for example, did
a Labour government, against widespread opposition, succeed in
introducing a fee-paying structure into British higher education.
In all
these areas it proved difficult to forge an alliance of consent for
radical change. On this her Cabinet (and her supporters) were
notoriously divided (between ‘wets’ and ‘drys’) and it took
several years of bruising confrontations within her own party and in
the media to win modest neoliberal reforms. The best she could do was
to try to force a culture of entrepreneurialism and impose strict
rules of surveillance, financial accountability, and productivity on
to institutions, such as universities, that were ill suited to them.
Thatcher
forged consent through the cultivation of a middle class that
relished the joys of home ownership, private property, individualism,
and the liberation of entrepreneurial opportunities. With
working-class solidarities waning under pressure and job structures
radically changing through deindustrialization, middle-class values
spread more widely to encompass many of those who had once had a
firm working-class identity.
The
opening of Britain to freer trade allowed a consumer culture to
flourish, and the proliferation of financial institutions brought
more and more of a debt culture into the centre of a formerly staid
British life. Neoliberalism entailed the transformation of the older
British class structure, at both ends of the spectrum.
Moreover,
by keeping the City of London as a central player in global finance
it increasingly turned the heartland of Britain’s economy, London
and the south-east, into a dynamic centre of ever-increasing wealth
and power. Class power had not so much been restored to any
traditional sector but rather had gathered expansively around one of
the key global centres of financial operations. Recruits from
Oxbridge flooded into London as bond and currency traders, rapidly
amassing wealth and power and turning London into one of the most
expensive cities in the world.
While
the Thatcher revolution was prepared by the organization of consent
within the traditional middle classes who bore her to three electoral
victories, the whole programme, particularly in her first
administration, was far more ideologically driven (thanks largely to
Keith Joseph) by neoliberal theory than was ever the case in the US.
While from a solid middle-class background herself, she plainly
relished the traditionally close contacts between the prime
minister’s office and the ‘captains’ of industry and finance.
She frequently turned to them for advice and in some instances
clearly delivered them favours by undervaluing state assets set for
privatization. The project to restore class power –– as
opposed to dismantling working-class power –– probably played a
more subconscious role in her political evolution.
The
success of Reagan and Thatcher can be measured in various ways. But I
think it most useful to stress the way in which they took what had
hitherto been minority political, ideological, and intellectual
positions and made them mainstream. The alliance of forces they
helped consolidate and the majorities they led became a legacy that a
subsequent generation of political leaders found hard to dislodge.
Perhaps
the greatest testimony to their success lies in the fact that both
Clinton and Blair found themselves in a situation where their room
for manoeuvre was so limited that they could not help but sustain the
process of restoration of class power even against their own better
instincts. And once neoliberalism became that deeply entrenched in
the English-speaking world it was hard to gainsay its considerable
relevance to how capitalism in general was working internationally.
This is
not to say, as we shall see, that neoliberalism was merely imposed
elsewhere by Anglo-American influence and power. For as these two
case studies amply demonstrate, the internal circumstances and
subsequent nature of the neoliberal turn were quite different in
Britain and the US, and by extension we should expect that internal
forces as well as external influences and impositions have played a
distinctive role elsewhere.
Reagan
and Thatcher seized on the clues they had (from Chile and New York
City) and placed themselves at the head of a class movement that was
determined to restore its power. Their genius was to create a legacy
and a tradition that tangled subsequent politicians in a web of
constraints from which they could not easily escape. Those who
followed, like Clinton and Blair, could do little more than continue
the good work of neoliberalization, whether they liked it or not.
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