Blair’s going, going, gone, and Gordon Brown will be off to the Palace soon to kiss hands. We’ve already had some reflection here at LP on Blair’s legacy (and, incidentally, I think his new choice of role as a Middle East peace envoy is quite bizarre in a way), but I wanted to make some observations on John Quiggin’s post on “Thatcherism after Blair”. John argues that Thatcherism can now be seen within its historical context:
In some respects, this was a necessary response to the times. Demands on the postwar welfare state had outrun state capacity, and a combination of retrenchment and refurbishment was inevitable. Since the political right was correctly pointing this out at a time when the left was still recovering from the impossibilist fantasies of the 1960s, it was probably inevitable that the adjustment would come with some of the ideological baggage of Thatcherism.
He points to its continuing legacies, but I think misses the mark somewhat when he makes some inferences from the fact that Thatcher only managed to restrain the growth in the size of the state marginally. In fact, Thatcher had far more of an impact on the economic base of the United Kingdom than that, as was made plain at the time, and afterwards, by observers as ideologically distinct as Tom Nairn and some of her own Ministers.
The real effects of her embrace of monetarism were to smash the manufacturing base of Britain, and manufacturing capital, and accentuate the secular trend towards both the internationalisation of its economy and the centralisation of wealth in finance capital, the Home Counties, and spatially and in terms of power, The City itself.
Where Thatcherism has been eclipsed has been in the rather spiteful nature of its political tone, as John observes, but the fact that the British economy (otherwise superficially similar to ours over the last decade) is now mainly a service-based economy, albeit with a focus on high value-added services, is her true legacy.
She was, in many ways, the first globalising domestic politician economically speaking, and Blair’s “cool” and meritocratic Britain is a nice match with its economic base. Conversely, the growth in wages inequality and the emergence, particularly after the expanded EU opened its labour markets, of a low paid underclass is also her legacy, one that Brown tried to respond to in some ways with an emphasis on labour standards and a fairly traditional redistributive social democratic fiscal approach.
All that makes Brown’s Britain, as a possible precursor to how a possible Ruddian Australia “after the mining boom” might look, quite an interesting case study to observe.
Update: More on Brown and Blair at Blogocracy.
http://www.smh.com.au/news/world/old-politics-out-vows-brown/2007/06/28/1182624022070.html
That’s interesting - as it partly relates to Brown’s own Scottishness and the impact of the SNP victory in the May elections and partly to fears about multiculturalism.
Not to put too fine a point on bit, but weren’t substantial parts of British manufacturing doomed in the long run anyway?
But why were they doomed, Robert? Manufacturing is still flourishing in Germany, even if some of the actual production is outsourced to Eastern Europe.
It was a conscious choice on the part of Thatcher to accelerate a trend, as I said. It’s open to debate whether or not it was a sensible one, but I think the transformation of the British economy towards a services-based one is an important development, and one whose implications both economic and social deserve analysis.
Fair point, Mark.
I would also agree that Thatcher was brutal, and needlessly so, in the ways she implemented change, leaving much of the social costs on those least able to afford it.
But, at least according to legend, the British manufacturing sector was notoriously mismanaged (with union help in that respect) through the 1960s and 1970s. The awful quality of british motor vehicles from that era is certainly legendary. Furthermore, the British government had repeatedly tried to intervene to save the manufacturing base, and it was still falling down around its ears.
That’s true, Robert, and as I’m suggesting, the reasons why go further than just the particular conjuncture of the 1970s - the whole “decline of Britain” debate is about that - whether it was in part a disdain for “mechanicks” caused by an aristocratic class structure and the preference for a classical over a technological education, whether it was because of the power of financial capital in The City, etc. But it’s worth remembering that it wasn’t a necessary choice, and there was a lot of thinking going on at the time about how manufacturing could be revived. Government intervention was more protectionist really - in the sense of bailing out failing industries to ward off closure or foreign takeover. But that wasn’t the only possible type of intervention.
I think what I’m trying to argue is that economic choices matter - and that they’re nowhere near as forced by “the global economy” as we might believe.
Margaret Thatcher and I have at least one thing in common. I am getting old.And that may have as many values of similarity about it as disimilarities.I have even been looking lately to see if I am indeed,an emerging Lizard, but, I guess shape shifting has always been a problem for me. I do however think it very sad that Labor looks at Britain for inspiration,so we will once again, not decide that with a bit of working on the edges,Australian responses should be tried first rather than adopting British global make. After all they are competing with Irish global make…And we have Nicole Kidman.!?
The ‘doomed’ concept can only emerge retrospectively, I think. Otherwise it has potential as a neoliberal ‘force of the market’ pretext for anything at all.
Update: More on Brown and Blair at Blogocracy.
Alexander Downer also had some thoughts about Blair’s legacy.
It’s debatable whether a nation that rids itself of a manufacturing sector that produces mass-produced consumer durables is ipso facto suffering decline.
Certainly, proud possession of such a sector has not guaranteed a perch at the top of the developmental tree.
If the aim of nation-building was to encourage the development of a large middle class and an even spread of wealth, then the manufacturing model is the go.
Bui it is precisely those societies that are now under huge pressure from the Chinese manufacturing sector. Even Germany is attempting to renegotiate the social compact between capital, the state, and labour.
Britain has more or less withdrawn from the manufacturing sector. North Sea oil tax revenues eased the transition. But Britain has been quite successful at shackling its financial services sector to the tax burden of quite an expensive social wage.
And it would appear that the financial services sector in Britain continues to be quite dynamic despite this impediment.
People are less likely to change their bankers than their brand of television?
Well, it’s more about being an entrepot and a hub for large financial transactions and trades, Katz, than retail banking, I think.
Adam Gall
I would be very interested to know what it is you mean when you use the word “neoliberal.”
Yup, London is now a funkier, sexier, dirty, bigger version of Zurich or Geneva. It’s where money generated elsewhere gets washed, put to work and then taken out for a night on the town. And unlike those boring Swiss towns, there’s much more interesting opportunities for your surplus capital a few minutes from your front door - whether it’s bespoke supersnob tailoring and antiques, top of the line call girls or rubbing shoulders with Damien Hirst, Dary Bussell and Madonna at a private Mayfair gallery viewing. And for an added frission, no one does nostalgia de la boue quite like the Brits.
Back OT, we’re all living in a Thatcherist world now - where the pollies loudly announce how they’re responsible financial managers while subsiding key industries and mates on the sly. Maggie, for all her talk, was not adverse to seeing billions of taxpayer sponduliks quietly propping up the defence and energy sectors.
I agree though that Brit manufacturing was getting pretty bloody moribund in the 60s and 70s and definitely needed hosing out. I think you can lay the blame there at both bloody-minded marxist unions and snobbish, clubby, slow-witted management.
Anyway that was then, this is now. Where China builds everything, India processes everything, Europe provides the style and the US the entertainment. And anybody who gets rich off this new world order buys a pad in London (and/or New York), sends their money on well-hedged missions of discovery and joins the overripe party circuit.
Well put Nabakov, but I would add to your elegant summation the following. When the music stops or falters, the question for the ‘political economy is like racing at Le Mans ‘ brigade, is whether the middle class, or at least that section of it still dependent largely on their own exertions for their status and comfort, will be content to wear the complete consequences of the real risk they now carry, or will they get a bit stoppy/bolshie and demand some fundamental reaccounting?
The idea that we have reached a new political and economic ‘order’ which can be expected to run interrupted for the next 10 years, let alone 50, is absurd. The question as always, is, who will do what to whom, when it all starts to unravel?
“at least according to legend, the British manufacturing sector was notoriously mismanaged (with union help in that respect) through the 1960s and 1970s….”
I seem to recall that Ronald Dore had some interesting stuff to say about this sort of thing in “British Factory, Japanese Factory”… –but oops, I’ve just been hit on the head with another coconut, and now I’ve forgotten it all again.