OK, it’s been a while. Let’s just say life has been filled with sick neighbours needing caring for, loved ones with serious work hassles – about as serious as they get actually – and CJ trying to get some work done. I have also lost a couple of days to POLTERWOTSIT, my little poltergeist based blog, chronicling the “Doncaster Poltergeist” (Parts 1, 2, 3, 4). I have been strangely absent from my favourite forums, and have barely responded to comments on this blog, even the interesting discussion on Eostre, though I was pleased to read Cavalorn’s excellent Live Journal article where he writes much sense.
Still I suppose it’s time to comment on the General Election, and talk politics. Please don’t change the channel — you all know that I am an old lefty who will vote Lib Dem because I live in Cheltenham, but for reasons to do with economic policy and supporting the public sector (I’m still likening our position in some ways to 1947, and see public sector spending as one potential way out: I’m sure the economists among you can tell me why this is a hopelessly naive assessment) I want to see Brown re=elected. Bet that really scares and outrages a lot of people? Hey we can differ. 🙂
Anyway I had a good laugh at this —
And here Labour effectively capitalise on my fears – the fear of a return to Thatcherism. I lived through the eighties, and I must say that my thinking is still scarred by it — not so much by Thatcher, as by the fear of thermonuclear annihilation at any moment, that wonderful gift to my generation of the Cold War. You wonder that religions and apocalyptic cults boomed in the period after the horrors and genocide of WW2? When has fiery eschaton (‘end of the world’) coming out of a clear blue sky, with a four minute warning heralding the final Trump, ever seemed more realistic? It’s hard to disengage and be realistic about the strengths and weaknesses of Thatcher’s experiment with Libertarianism without taking that constant unease in to account…
So why were the eighties bad? They weren’t. For CJ, it’s in some way forever 1987, and I’m still an 18 year old student leaving home and living through “interesting times”; still dress a bit like it’s the eighties, and my musical tastes have not really evolved much beyond the goth/indie/alternative scene of those years. In some ways I’d like to see a return to the eighties; not the real eighties of urban riots, the miners strike, the housing boom that was to end catastrophically in the early 90’s, or terrible sitcoms on TV — no the eighties I miss are the times I was a student, discovered girls (I was a very late developer) and made many of the friends I still hold dear today. Nostalgia is not what it was…
So why do I bang on about the dreadful legacy of Thatcherism? For the same reason it’s hard to find a New Labour supporter among the twenty somethings and teenagers of today. We lived through a long period of Tory rule, and while i quite liked John Major as a bloke from what I saw of him, and many Tories were brilliant politicians and great thinkers, the social experiment that was conducted in those years scarred many of my generation. So why this feeling among my younger friends that we need to have a change of government?
The human heart seems to hanker for change; “the grass is always greener” as the proverb has it. After three governments of any party one wants to try the alternative, wants to see if they can do better. We all have Messianic Expectations – the new guys will get in, make all right with the world. It’s why like many other traditional Labour supporters who welcomed the 1996 victory of Blairite Labour as if we had all our birthdays and Christmases come at once, disillusionment soon set in. When Labour stopped being “Socialist”, when Labour seemed to turn it’s back on students and followed the old Tory funding plans, when Labour seemed to fail – and they did in my eyes – to meet working class British interests, I realised what we were seeing was not Labour at all. Blair was a Democrat, as in the US party: he took us back to the Thatcherism that Major and IDS had repudiated to some extent. Blair’s Britain was the party of Middle England, and there is much to be said for that I suppose…
So I became a fierce critic of Blair, but in years when the Tory party self destructed over Europe: now under Cameron they seem to be mounting a credible alternative. What of Brown? I have said before Gordon Brown saved the world, and I’ll say it again: Gordon Brown saved the world by his bail out plan. While the Americans dithered, little old Britain again, perhaps for the last time, became a world power, as Brown and Darling (sounds like something from Blackadder IV doesn’t it?) hammered out a plan that prevented the banks collapsing and complete melt down. I don’t know how far we were from no food in the shops, but I do know that a lot of people would probably not have been paid and things got very hairy indeed if it was not for that commitment to a plan. They may have failed to forsee the disaster – they had a couple of years notice, and failed to act, and for that they should be rightly criticised – but when they finally acted, it was decisive. The only question is does the parent who rescues the baby from the burning house deserve the praise when their carelessness allowed the baby to be their in the first place? In thsi case the conflagration was general – the fire started in the USA, and no one had tried to regulate efficiently for fear of stifling the market and causing a recession – so we trusted the bankers…
So Brown was the man with a plan. Sure it’s a plan that has plunged us in to massive debt – still insignificant compared with the USA’s – but that worked in 1948, when we borrowed through the Bretton Woods agreement and set up the NHS on the yankee dollar; it can work now. The trick is to keep the public sector expanding, so we have a safeguard against the vagaries of market and private sector failures.
A brief digression in to Theory…
I’m surprised by how many people i know who seem to not understand the most simple economic and political ideas. I humbly forgive those who know all this: I’ll offer a short synopsis.
Capitalism believes in a free market.State intervention is kept to a minimum: the market sets prices, and so competition will always lead to an efficient market price. The job of the state is to regulate and protect that free market, and allow people to prosper through their own hard work. It’s a beautiful idea, and since Adam Smith put it forward in 1776 it has proven its worth. Huzzah for Capitalism! 🙂 The problem is that a free market is subject to ups and downs – boom and bust. Gordon promised an end to boom and bust, and then presided over a bust, and I don’t mean Edwina’s bosom – that was the Major years…
Communism is more complicated, because it is far more than an economic theory, it’s also a theory about history, sociology and the nature of reality. The basic idea however is that the State looks after workers, and sets prices, taxes, and has huge amounts of control of every aspect of citizens life. Eventually it will wither away and be replaced by a utopian paradise, but er, that never really happened. Still Communism is complicated like I said – but think State control, representing workers interests through the Party.
Socialism (in the UK sense) has strong links with the cooperative, Trade Union and though many do not relaise it Christian movement of the 19th century. The basic principle is that social justice prevails, reigning in the excesses of capitalism. It does not endorse the Free Market as Capitalism, or State Regulation as in Communism: instead it favours a Mixed Market approach – some industries such as water, power, trains, postal services, and other necessary parts of the infrastructure are controlled by the State directly – much like our NHS (National Health System, or the US postal service), and other parts are in the hands of private companies, and subject to competition and the market. This process is called a planned economy, because in theory the government has some control over what happens in the long run. Unfortunately the results of Labour’s policies will come to bear on the Conservatives if they win: many economic policies, like business management strategies can only be fully understood years later when the consequences become apparent. It’s not so much planned as do something, hope it works and hand it on to the next guys…
There is another factor involved here, that I briefly touched on in my discussion of Brown and the Credit Crunch above – globalization. The bonuses and problems inherent in this can be discussed another time; but the internet, phones, and a shrinking world has meant that now we do far more business than ever with the rest of the world, and whatever the British politicians do, a boom or bust may be as much to do with events on the far side of the world as events here. The role of government has changed from trying to control their own country by dictating a management strategy, to trying to weather the ups and downs of global events.
There are other types of economic system – of which perhaps the most important is Anarchism. Anarchism is the ultimate end of communism in Marxist theory, where the State ceases to exist, and it’s a utopian in many ways ideal where people don’t need a Government at all: all state regulation is removed, and a genuinely free market develops, where people govern themselves, and while you still have laws, you don’t have any kind of State at all. There are many many types of anarchist thought — left anarchists such as Anarcho-syndicalsist where workers running their own industries and setting up communes which trade with others; Right Wing anarchists are generally today called libertarians, and they believe in the Free Market, being super-capitalists – let the Market decide, get rid of all state regulation, and people will strive to get rich and better themselves. As Thoreau wrote “that government is best that governs least”…
Thatcher the Anarchist?
So what was acceptable in the eighties? Why does the spectre of Margaret Thatcher still arouse such strong feeling in many of my generation? And why do New Labour think that poster might work? Down here in Cheltenham the eighties were boom years, likewise in the City of London. Why would others fear a return to the decade of Duran Duran and Spandau Ballet, other than fashion sense?
The most important thing to recognise was that Thatcher was a revolutionary. What she created was basically “New Conservatism”: while she could be authoritarian, imperious, and a promoter of a mythic England she loved, she also had that small business hatred of over-regulation and bureaucracy, a fear of Big Government that tried to impose answers from above. Thatcher was in many ways an anarchist – she dismantled the State, and tried hard to reduce governmental control in every sector, from finance to industry. Thatcherism has often been described as the politics of “I’m alrtight, Jack” — self interest, everyone out for themselves – but it was far more than that. One of the basic principles of Free Market capitalism is that there si an “invisible hand” that regulates the markets – I’m not sure if Smith felt it was the hand of god, but basically it is self-interest – give people the mean to make money and better themselves, cut any red tape in their way, lower taxes, and everything will work out fine – because people will act rationally in thei rown economic best interests. Get rid of the “nanny state”. This was actually a radical departure from older Conservative theory, which had seen paternalism – where the State looks after peoples best interests – as key.
So Thatcher adopted a lot of libertarian ideas, from right wing think tanks in the States — she gave people new options, new possibilities, to sink or wim. And let’;s face it, huge numbers prospered amazingly. She pretty much reversed the ratio of people who rented to people owning their own homes – give people a nice home of their own, and hey what happens? They become better citizens, because they are stakeholders in society. They become wealthy, and prosper. This was a miracle that benefited a generation; but it was at the expense of a credit based mortgage driven society, and the sale of the council house stock. When you sell someone their council house they benefit, but when you need council houses you ain’t got none. New Labour compounded this disaster by failing to build new council houses – it’s all downhill…
But Thatcher presided over an economic boom. She followed a fiscal policy that ended post war austerity and the drab misery of the 70’s – a decade we would all probably happily forget – and she made us a nation of entrepreneurs. There were scandals, there were bad times – but she made people rich, allowed them a shot at their dreams, made the yuppie work ethic and aspirational culture leave the City and New Romantic clubs and gave Britain a kick in to the 21st century, two decades early. It was a golden age – marred only by the shadow of the Cold War…
Except — she did this at a terrible price. To dismantle the nationalised industries meant huge redundancies – as unemployment headed for one in ten again, pretty much the situation when she came to power, everything fro the buses to British Telecom was effectively flogged on E-bay. Thatcher distrusted the State so she dismantled it, and as the pit closures and the privatisation led to a wave of industrial action similar to that in the Winter of Discontent of 1979, she smashed the unions power, tilting the balance in favour of the employer over the employee. The result was a Ravaging of the North not seen since William the Conqueror — whole communities shattered as their traditional industries failed to be competitive when the government relinquished control and allowed them to be privatised. New Labour have followed in this path: but interestingly while Blair brought in more and more employment legislation to give rights to workers, Brown has largely dismantled it, and replaced it with “Guidelines” and “consultation”. No one is interested it seems in employees rights any more – the emphasis these days is on supporting the employers, as wealth-creators.
Now to understand why Thatcher destroyed the unions, you have to understand that the unions were in the 1970’s still a major political force. Old style commie union leaders used strike action as a way to bring down governments, and in fact it was this kind of mass industrial unrest in the Winter of Discontent (1979) that brought down Labour and allowed Thatcher to sweep to power. Thatcher believed that the unions prevented economic growth, and she took decisive action, and used the police to try to prevent what she saw as revolutionary action by striking miners and flying pickets.
Hugh used to ask me with each new sell off “given that we owned this company as a people, and can’t afford to buy shares in the stock market in the new privatised one, where is our pay off?” I liken it to parents who decide to sell their children’s inheritance; the new privatised companies were not run for social benefit, but to make a profit for the shareholders, obviously enough. Has competition brought down the price of phones, gas, water, in real terms while providing a more efficient service etc, etc? I honestly don’t know, I have never seen the figures. I do know that many of the coal mines closed in the eighties would now be profitable again if they were not flooded, but hey, hindsight is easy.
What the eighties saw was sudden jump in the difference between the haves and the have nots in our society – a pattern that has continued relentlessly ever since, with the successful entrepreneurs, CEO’s, small business folk and managers seeing a greater and greater share of the pie. Wealth has become concentrated in fewer and fewer hands – not quite as much as in the twelfth century I suspect, but the disparity between rich and poor continues to grow. In fact we have new factors now like Information Poverty – why Brown’s “broadband in very home” pledge is so vital, however he manages to pay for it…
So the eighties was a revolution in British society: the breakdown of the old class system, the creation of a “new middle class” of home owners, the devastation of whole communities, the collapse of old certainties like “job for life”. Many prospered; if I had left uni a couple o years earlier I might have done well — many others sunk without trace. It was the decade fo the North/South divide, of boom-town London, and of immense wealth and immense poverty. It all came down crashing down with the collapse of the Stock Market and then housing market in the early 1990’s which were a hang over for the part of the decade before — all presided over by Conservative administrations who had to deal with the real cost of Thatcher’s experiment, and who repudiated Thatcherism in the same way the USSR repudiated Stalin. It’s been hard to find anyone with a good word for Thatcher for a long time, outside of neo-con Americans and Libertarians, and while I appreciate her courage (in the Yes Minister sense – her ideas were often “courageous”, the Poll Tax the most so) Thatcher was arguably a great success. You could probably say the same of Blair..?
To me, it’s all irrelevant now. We are stuck with the legacy of the eighties, and I’m too old to fight on the barricades if Thatcher Mk 2 comes along. I want a quiet life. Yet what was acceptable in the eighties is probably not acceptable in 21st century Britain…
Even if Cameron were a new Thatcher, America does not have anyone close to the quality of a Reagan to follow. We are stuck with a puppet lacking original thought or the conviction to choose one side of the aisle or another. Even if this watered down Obamacare is his undoing, there is nobody waiting in the wings to give a crap about.
“the fire started in the USA” – but that’s not the only fire.
Our other fire is the debt. Massive, clunking debt. Brown spent more than all British governments IN HISTORY PUT TOGETHER. Now before think to yourself, “Well, we did need a few new hospitals and schools”, let me remind you that capital projects under Brown were paid for by the Private Finance Initiative which don’t appear on the books.
So, he’s spent more money than all British governments in history put together and that’s NOT INCLUDING the new hospitals and new schools.
What the hell has he spent the money on?
And it’s not like the Private Finance Initiative is a good deal. Under PFI, a company builds a new hospital or school, then leases it (rents it) back to the government for 25 years. After 25 years… ta-da… ownership returns to the company! Us taxpayers are paying mortgages on these capital projects but we won’t even end up owning the property!
So, the debt is Brown’s fire alone.
But wait, there’s more… let’s examine your idea that the banking crisis is something that was isolated to America and only affected banks which invested in the American housing bubble. Unfortunately you’ve then got to ask yourself… why was Britain one of the FIRST western European nations to enter the “global” recession and one of the LAST to leave? (In January it was a close call whether we’d even exit recession before Spain, ffs).
Brown said he was “prudent”. Wrong.
Brown said he’d created “an end to boom and bust”. Wrong.
Brown said his policies would mean that “Britain is well placed to exit recession early”. Wrong.
Brown has spent more money than all British governments put together and after all that spending we don’t even own a single new classroom or hospital ward!
Let us, once and for all, kill this idea that Brown is a competent economist.
OK, owing to work commitments I’m going to have to respond in bits – but I oppose PFI as much as anyone. When the Major administration brought in PFI I thought it was nuts – so did Labour, but New Labour reversed their tune, and even Darling, a firm critic of PFI, was converted. As far as I know the only party committed to ending PFI is the Lib Dems – and let’s face it, they ain’t going to be forming a government any time soon?
So I welcomed George Osbornes criticism of PFI last year, and promise of reforms. I understand WHY successive administrations adopted PFI – as I said at the beginning of my piece, spending your way out of an economic downturn as in 1948 through public works programmes is actually a viable strategy as was demonstrated then – and we have paid off Bretton Woods loans to the USA; I suspect that many nations have adopted the apparent US maxim that credit rating is what matters in international debt, rather than the size of the national deficit. Are we storing up a huge disaster for future generations? Quite possibly, and it alarms me as much as you — I’m also ideologically opposed as a socialist to the dismantling of the public sector in to quasi-privatised private initiatives directly funded by the taxpayer. PFI was simply a method of raising money through loans: but as the assets were left in the hands of the private sector, I agree the whole thing is deplorable: the pFI contractors take on power without responsibility, and in the long term 30-50 years — it’s a recipe for disaster, which can only end in privatisation of key infrastructure. I loathe the PFI in the same way I suspect the NHS Foundation Trusts policy: you end up with a management heavy, bureaucracy obsessed and ultimately profit orientated section of the key infrastructure.
However i don’t see PFI as Brown’s fault. It’s another radical “economic experiment”, and i suspect it will end in tears — but at least UNISON and others do continue to oppose it – their simple explanation to members here – http://www.unison.org.uk/pfi/index.asp
PFI is a going to cost the tax payer far more than Public Sector pensions – four times more where we stand now i think. If you can show me Osboirnes proposed reforms of the pFI system I will be interested. For now i must dash…
CJ, this may help: http://www.pppforum.com/government/article.asp?p=264
Basically reform PFI with two key pledges. First bring all PFI onto the balance sheet so that PFI commitments show up as government debt, and are budgeted appropriately. Secondly, pay by outcomes not by specification. Under Labour, payment is dependent on millions of words of detailed small print. Whereas under the Conservatives each contract will have a short list of 3-6 goals and payment only happen when those goals are met.
Now frankly as someone who is Head of Software Development for an in-house government quango, I know that elected and unelected government officials change their mind more often than I change the batteries in my wireless mouse. So there’s no way I’d bid for any government contract where they said they could change the spec and not pay for the work already done to fit the old spec.
Having said that, these contracts run into millions and occasionally billions so I don’t doubt that some stupid contractor will try it, but it’ll all end in tears… in court.
Frankly though the real solution is in our Conservative commitment to drop large IT projects and instead focus on open standards. This will allow multiple contractors to provide small, inexpensive, modular software that interoperates with other small, inexpensive, modular software made by lots of other different contractors, rather than having monolithic mega-systems.