As the economy is moving rapidly into the kind of situation we experienced in the 1980s with mass unemployment, the disappearance of numerous businesses and repossessions of houses, it is unsurprising that people's thoughts turn back to that era. Many, including myself hoped we would never experience anything like it again in my lifetime and until the middle of 2008 it seemed that possibly we never would. It is terrible that the greed of bankers has brought back this situation that causes so much misery to millions of people. Fortunately this time we seem to have governments in power who rather than saying that there is nothing they can do, or even worse, as was said in the UK by its government in the 1980s, this kind of suffering is somehow 'good' for us, they are now trying to rein in the reckless bankers and keep the economy stimulate rather than facing huge contraction.
Okay, so this is old news now. However, what brought it back to mind this weekend was the references to the anniversary of Margaret Thatcher coming to power 4th May 1979. She held office until 28th November 1990 so bracketing the 1980s and the evils of that decade will always be associated with her. I saw an article in 'The Guardian' about the anniversary and worried that it would begin to rehabilitate Thatcher (who unfortunately still lives, she was born 1925). I was heartened to see that it was written by Germaine Greer and that she has charged at Thatcher's record with full force. There are very accurate descriptions: she '... had scant regard for democracy and no scruples whatsoever.' Greer is right that Thatcher did not have a systematic plan to smash British society (though she had a very clear plan to smash trades unions especially the coalminers' NUM), but like Hitler she was an opportunist who took advantage of things like the Argentinian invasion of the Falklands Islands to advance her wrecking of UK society and industry. Unlike George W. Bush, she did not do this because she particularly favoured the very wealthy, though they clearly benefited from her policies, but because of the twisted ideology that she subscribed to, part based in a misunderstanding of Hayekian attitudes mixed in with New Right economic and social thinking from the USA and above all an incredible arrogance that what she did was right. Perhaps people can only become politicians if they have that focus, but Thatcher's was untempered by anything like reference to God or democracy and in fact was simply reinforced by her clear contempt for almost everyone she dealt with.
Though we did not know it at the time, increasing evidence has come to light about how corrupt she was, especially in arms deals which in particular benefited her son, the buffoon and attempted coup creator, Sir Mark Thatcher, Bart. He made £20 million from the arms deal his mother did with the Saudis in 1985. Thatcher tried to overthrow the government of Equiatorial Guinea in 2004 but as with many of this incompetent's projects it failed. Back to his mother. Like the US President with which she shared most affinity, Ronald Reagan (president 1981-9) she believed in supporting right-wing dictatorships across the world notably President Suharto of Indonesia (dictator 1967-98) and especially General Pinochet dictator of Chile 1974-90. With Reagan she adopted a harsh line towards the USSR and helped bring the world closer to nuclear war 1979-83 than it had been for almost two decades. I remember the terror of waking up to loud bangs in the early Eighties, thinking that the nuclear war that Thatcher so clearly wanted had come. Thatcher was harsh in personality and terribly patronising (and her use of the pronoun 'we' when referring to herself, something usually reserved for royalty), but worse than that, as many people observed to me at the time, she seem to revel in blood letting. This is most obvious when you saw coverage of her at the time of the Falklands Conflict, though she referred to the loss of British forces, it appears in her face as if she was energised by the recognition of those deaths. Perhaps she could not suppress the impact of the knowledge of how it would benefit her election campaign, perhaps she did simply enjoy conflicts; she seemed happiest atop a tank.
In the international sphere, Thatcher directly contributed to the deaths of thousands of people through permitting arms sales to dictators. However, a lot of this was oblivious to the British public. The more immediate suffering was how she wrecked the economy and thrust unemployment above 4 million (though never admitted this through using skewed statistics). Industry was changing in the UK as across the world. As early as 1974 service industry had outstripped manufacturing in terms of contribution to the economy and of course this was going to continue. However, there were many different ways to handle this change. Thatcher adopted the one which was to cause most misery to the most people in the UK (and I will throttle the next person who tells me 'well, of course we knew it was necessary', I wish I could send them back to 1983 and make them someone with a family, thrown out of their jobs, humiliated by being told they were a 'dole scrounger' and to 'get on their bike' to search for the work that was not there). She adhered to a strongly monetarist policies and shut down the coal industry and sold off the nationalised sector to greedy exploiters who have made millions in profits (and personal income) and left us with a fragmented far worse set of utility and transport companies (I will also punch the next person who tells me that the railway system, which they never use, must be better than it was when first privatised [I know that was under John Major but it was part of the flow of Thatcherite policy]), whose greed simply fuel the inflation Thatcher was so supposedly against. Of course, none of this mattered to Thatcher, she did not really believe society existed, she just saw 'families and individuals'. Thus, schools and hospitals were forced to make cut-backs from which many have still not really recovered. The privatisation of hospital cleaning under Thatcher has directly led to the various 'super-bugs' infections which infect thousands of people across the UK and kill many. Poor literacy and numeracy levels and still too high levels of people leaving school without qualifications goes back to Thatcher.
The worst legacy of Thatcher's regime is the myth of getting rich quick. 'Everyone can be a millionaire so everyone has to try' was how the The sung it in 1986. The implication was that it was only the lazy who were unemployed and if you worked hard you would always succeed in Thatcher's Britain and yet it was a lie right from the start. Those people who were seen being successful, notably the City of London financiers and stockbrokers were in most cases privileged to start with. People bought into the myth, partly as a way to escape the gloom and yet in fact they just got into debt through over consumption to try to buy the glamorous 1980s lifestyle and in particular to try to buy their council house many of which were to be repossessed 1990-3 as the bubble burst and people had to count the cost. As unemployment figures of the 1960s showed, there are some people who cannot work, probably 50,000 in the UK population. However, the bulk of the population is keen to have a job. No-one should feel guilty at being thrown out by an employer who sees cutting labour costs as the easy option and less personally painful that cutting their salary or bonuses. It is this culture established and lauded under Thatcher that has led us into a repeat of the unpleasant days of the 1980s once again.
Thatcher fuelled an attitude that divided British society against itself. British communities have probably never been as strong or amenable as people have believed, but they certainly were not as hostile and vigilante focused as they became following Thatcher's policies. The division of the 'deserving' and 'undeserving' is one we are still haunted by and so many people can be dumped into the 'undeserving' category notably asylum seekers, immigrants, students, people from other regions. There has always been North-South tension in the UK, but it was sharpened by the Thatcher years and it seems only now that it has began to reduce, but perhaps the recession will make it worse. Thatcher spoke of the 'enemy within' referring to anyone with left-wing or trade union connections and she gave a free rein to the police and security service in a way that has never been recaptured. She established a sound foundation for the steps we continue to take towards authoritarianism in the UK even today. That 'enemy within' mentality of course extends into communities especially since it received the jolt of anti-Islamic propaganda in the 2000s. However, without Thatcher's legacy such tendencies would not have fallen on such fertile ground.
The perverse attitude of Thatcher which has done so much harm to the UK (and its spread was her greatest success) was the 'community charge', better known as the poll tax, which was charged at the same rate on people no matter what their income was. Some of the poorest got reductions, but a millionaire would pay the same as someone earning less than the average wage (and of course in those pre-minimum wage days, low wages were ridiculously low, the figures mean nothing now but on the eve of the introduction of the minimum wage in 1999 at £3.60 per hour for people over 21, I knew people working at £1.90-2.00 per hour, which shows how much the jump was). This was Thatcherite 'equality' and how perverse this was led to the poll tax riots of 1990. Of course, you can tell the severity of the regime by how often there was rioting under Thatcher. The UK is not a country particularly known for forceful political protest, but the 1980s saw a lot of it. Even riots sparked by local tensions such as the St. Paul's (Bristol) Riot of 1980 and the Brixton Riot of 1981 were in part caused by the police feeling they had Thatcher's backing to using harsh and often racist measures. If you think of the Handsworth riots (1981 and 1985), riots in Leeds, Liverpool (Toxteth), Broadwater Farm in 1985 (at which a policeman was beheaded) and riots connected with the Miners' Strike 1984-5 only apartheid South Africa and Sri Lanka experiencing a civil war faced anything similar at the time. The level of fury at what was being done to the people of Britain was immense. This in a country in which such protest has always been less common than elsewhere in Europe, except during the Thatcher years.
Thatcher was anti-intellectual. Again, education needed reform, but she thrust universities back into the elitist system and fostered the hostility to students that I see very visibly in my own neighbourhood even today. No other country in Europe has such hostility to learning as the UK. Somehow it is seen as a 'luxury' and again students are condemned as 'lazy'. In other countries people are proud not only to see their own children go to university, but proud to see other children in the same street, district, town go. Through the 1980s studying was dismissed as taking you away from the getting rich quick which was your duty; all successful entrepreneurs bragged that they 'went to the university of life' not noticing how the UK was slipping further and further behind rivals where even waiters are trained. The UK has only kept its head above water by importing intelligent, skilled, qualified people from across the world, notably Asia. If every doctor of Asian background (and I mean immediate background, not children of Asians who had settled in the UK in previous decades) was suddenly removed from the UK then the health service would collapse immediately. Look at successful businesses in the UK and you will find a huge number are led by 'outsiders' because too few indigenous British people, no matter what their race, has been encouraged to study or had the funding to continue to the levels needed to make a successful business and intellectual country.
Some people will regret that Margaret Thatcher was not killed in the bombing of the Grand Hotel where she was staying in October 1984. I will look at the implications of that incident in a counter-factual soon. However much I wish Margaret Thatcher had been eliminated from the UK I know that the response would have effectively made the UK a police state immediately and democracy (which Thatcher was no fan of, she disliked even working with ministerial colleagues, she was Gaullist, almost dictatorial, in wanting to dominate all aspects of politics) would have been suspended. I wish her corrupt arms dealings could have brought her and the Thatcherites of the time down and humiliated them for a generation in the way Nixon was removed from office and shunned because of his corrupt actions. Margaret Thatcher damaged the UK in so many different ways, some that were immediately obvious, some that we are only now seeing the consequences of. There are very few politicians that you cannot find one good thing that they have done for the country they dominated, but Thatcher is certainly one of them and the UK would have been a far better place if she had never been born.
Showing posts with label privatization. Show all posts
Showing posts with label privatization. Show all posts
Saturday, 11 April 2009
Wednesday, 6 February 2008
The Death of 'Democratic' Capitalism
Many people would argue that capitalist economies by definition are exploitative. That they rely on comparatively cheap labour to produce items to sell to consumers who are generally the cheap labour themselves and their pay is kept at a level which is only sufficient to allow them to buy those things in the long-run and not to advance through accumulating their own wealth so they can establish their own exploitative businesses. However, for most of the 20th century and certainly following the Second World War, there was a gradual movement away from that crude form of capitalism towards something more tempered. Most visibly we saw the evolution of welfare states across Europe which meant that by the 1960s most people were guaranteed housing, schooling, health care, public transport, etc. which allowed them to accumulate enough to allow them to enjoy things like holidays and consumer goods. This in turn boosted the consumer industry and capitalists found it was quite a good idea to keep this going especially as heavy industry began to decline in the 1970s and the service industry sector boomed. In the UK it is now sustained by credit rather than decent salaries, so is pretty fragile, but elsewhere in Europe and other industrialised parts of the world it is still roughly in place. The Communist states provided the basics for their people but had very little to offer in consumer items and with the fall of Communism they gave up the basics in return for opportunity to have access to such consumer items, and even more sharply than in the West, those who could get access did well, those who could not (the majority) were worse off, hence the continuing popularity of the Communists in the post-Communist countries as after the First World War.
As the Italian historian Donald Sassoon (see 'One Hundred Years of Socialism: The West European Left in the Twentieth Century' (1998)) who has spent his life looking at Socialism, has argued, actually more things that Socialists aim for such as health care, education, care of the elderly, decent salaries and working conditions, etc. are not achieved when capitalism is in crisis but when it is booming. I have termed this 'democratic capitalism' in that while consumers and workers are still effectively exploited, they also receive protection from the worst fluctations of the capitalist economies. In addition, there is an element in this 'democracy' which tends to get overlooked. The workers and the big capitalists are the usual focus of commentary on our economies, but I would argue, that those who make the jump and stop working for someone else and begin running their own business are also a characteristic of that democratic element. In the same way one would contrast say a monarchy in which only members of the royal family could run the country with a democracy where, in theory, anyone can be elected prime minister, and also take up many other lower positions locally, regionally and nationally to which they would have no access in a monarchy or a dictatorship. In the UK small business people gained this right gradually from the the 18th century onwards and while it took time for such people to be accorded anything like the access to influence that big businesses (especially those based on land) had, by the 20th century they had clearly won it. Thus, I see the ability of people to turn from workers to running small businesses as a further element of the democratic capitalism we once had. Of course many business go bust and these people return to the workers, but like someone who loses an election, generally they can try again.
So, you might be thinking, well this is a common example of capitalism with big business, small business and employees, with protection for those people who need it. However, I am arguing that such a form of capitalism is now dead and that we have almost reverted to the unfettered capitalism of the mid-19th century which meant the rich were immensely wealthy and the bulk of the population lived vicariously; in addition, the rich shaped all governmental policy and behaviour and anyone beneath them had no power. In addition, the ability to make the jump from worker to small business person is being crushed by the all encompassing corporations. In 1996 Michael Heseltine when Deputy Prime Minister (1995-7; he had been Secretary for Trade & Industry 1992-5) advised large companies effectively not to settle their bills to small businesses knowing that once they collapsed they would not be liable for the debt. This came from a leading Conservative and the party was supposed to be the one that backed business people whatever their size. Heseltine of course had become a millionaire at the age of 30 in 1963 so could be scathing of those struggling with small businesses. What this seemed to mark was a shift in the UK from backing any capitalism to backing the capitalism of the super-rich (or turbo-rich as they seem to be being called now). This was aided through the Thatcher years (1979-91) by selling off utilities which became very profitable businesses. On the surface this seemed to benefit small investors, but of course by the 1990s all their shares had been bought up by the big investment companies. Similarly encouragement to allow people to buy their council houses seem to be the democratisation of house ownership, but in fact with the slump of 1990-3 engineered by Thatcher's government and that of her successor John Major (1991-7) they lost control of these to the hands of multi-property owning landlords who rose to be millionaires too. Thus, the 1980s and 1990s saw the squeeze put on those people who would normally have been rising capitalists in favour of the richer.
Of course, Thatcher also ran through the welfare state stripping it of funds, making people feel guilty about using it and blaming anyone who did (which is one reason why millions of pounds of benefits go unclaimed each year), banning councils from building social housing, wrecking union rights, forcing public sector jobs to go to private companies paying the lowest wages, not allowing pensions to rise with inflation and so on. She did a very good job of stripping away so much of the safety net that had taken decades to construct. This is why the UK saw the rise of the underclass who have dropped out of society that no longer makes an effort to support them. Pressure on ordinary people came from many directions. I have noted how invidious the utility companies are and just today are reports about the percentage of poor families with children who cannot afford to heat their homes properly. Due to the use of metered utilities poor people actually have to pay more for their fuel than rich people, the same goes for food as they cannot access out-of-town stores that have the cheaper food; they cannot get bank loans and even legitimate loan companies can charge quite legally many times as much interest as those richer people can access. Thus, the system is engineered in the UK that once you have fallen into the poor category you are never going to get out. Increasingly, nor are your children, as schools become more selective, and as I have noted in previous posts even intelligent poor children fall quickly behind at school, they are condemned to live the same lives as their parents, however hard they might work. Due to the attitudes fostered in the 1980s such people are made to fill guilty and portrayed to the rest of us as lazy and deserving of their situation. Every class has lazy people in it, but poverty is an incredible motivator and I believe the greatest scroungers are among the rich.
So, for over twenty years, Britain has been moving to a less democratic capitalism, in which those who have least ability to pay are paying more. This was shown most sharply by the so-called Community Charge (better known as the Poll Tax) introduced to Scotland in 1989 and to the rest of the UK in 1990 and scrapped in 1993 following some of the most severe civil unrest the UK had seen for almost a decade. This tax was deemed 'fair' because everyone in a district no matter what they earnt paid the same amount to live in a house or flat in that district no matter how scummy or luxurious the property was or if they just rented one room in a house or had a whole mansion to themselves. About 1 million people disappeared from records overnight as they sought to avoid being stung by this tax which made up much more of your outgoings if you were poor or if you were rich. Even now in a borough like Tower Hamlets (small but densely populated, in East London) there are 60,000 (out of a population of over 200,000 people) fewer on the census register than registered with local doctors, because of the lingering fear of being found, despite the shift to the Council Tax which is based on property size.
Despite this steady erosion democratic capitalism it has now entered a new phase going beyond even the rich of the past. Even they are weak in the new set-up. This has been highlighted in a new book 'Who Runs Britain? How the Super-Rich are Changing Our Lives' by Robert Peston (2008) which though apparently flawed, highlights how that the people who run the UK are these so-called 'turbo-rich', going beyond the plutocrats of the past in their wealth and power. Of course Thatcher laid the ground for this by scrapping restrictions on taking capital generated in the UK out of the country, though this was simply jumping the gun as the EU insisted on it for all member states by 1990. Now, if a wealthy individual dislikes the government's policies they can simply threaten to shift some of their wealth elsewhere. Apparently, according to Peston the 1000 most wealthy people in the UK (out of a population of 62,000,000) owns £360,000,000,000 (€496 billion; US$716 billion) equivalent to 50 times the economy of Uruguay; roughly the same as the economy of Taiwan or Indonesia (which are the 20th and 21st richest countries in the world; about £10 billion more than even oil-rich Saudi Arabia in 22nd place). Beneath this 1000 must be many more billions owned and think of this replicated across the USA, Germany and Japan. In past postings I have referred to a map which showed the percentage of people living in various parts of the UK who were wealthy enough to be exempt from the norms of social behaviour. These 1000 people are rich enough to be exempt from the norms of government behaviour. They can murder people, make them disappear, drive them out of their homes and business and no-one can stop them.
You may say, well there have always been the rich. What is worsening the situation is the permitting of things like equity funds which simply buy up successful businesses and then load them with debt like a parasite draining their host rather than allowing that business to grow, pay better wages and employ more people. The richer you are the smaller a percentage of your income goes on tax. Multi-national companies learned this as early as the 1910s with oil companies leading the way. Peston claims that the tax 'efficiencies' of the super-rich deprive the government of equivalent to the rest of us paying 5p in the £ (i.e. a 5% tax rate) and so equivalent to hundreds of schools, hospitals, houses, battleships, space rockets, whatever you want to spend it on. This is just what we lose through their tax fiddles. They have distorted the economy of the whole South-East of England as I have noted before, pushing the cost of housing out of the reach of the bulk of even well-off people, and because their friends in the Thatcher regime smashed social housing, people cannot fall back on that as they would do in the past. It is almost as if these super-rich want to rub our noses in the muck to show how deprived we actually are. They are further pushing into health care, prisons, the Post Office, all the utilities, places where we previous got a bit of leeway if were not that rich, or in fact just comfortable. It is as if it is not only their greed wishing to earn more than whole states, it is that they feel they have to get us back for the 20th century when they were pressed a little bit to contribute to the rest of the population who actually power the businesses that they suck money from. Now we are being told, you stepped out of line, accept your station, here is the whipping to remind you not to get cocky again, not to ask for a welfare system, but to fight with each other for health and a house and an education so that you have no strength and we can pay you as low as we like to.
This is what the New Right agenda of the mid-1970s was working to. It was put into action in the 1980s and 1990s in the UK and the USA effectively forcing other more reluctant countries to follow suit (now with Sarkozy in France even the last outpost of a welfare society is being dismantled) and the countries coming out of Communism to rush blindly down the same path. As I have noted before Bush has favoured the super-rich as his core constituency and has engineered wars on their behalf (I think they fear fundamentalist Islam because it does not support consumerism and Iraq was just about the oil supply and business opportunities anyway). In Britain Blair was too enamoured of the Thatcher image to challenge it and even courted the super-rich. Maybe a Labour victory in 1992 was the last chance to reverse it, maybe it was too late by then, it certainly is now.
So what is our future? Well, probably by 2030 we will look very much like 1830. The welfare state is crumbling so fast in the UK that free at point of need dentistry is all but gone and health care will follow. Schooling is increasingly segregated and opportunities increasingly limited. There will always be a few people who will break out, but increasingly it will be because they win the lottery or a talent show than through hard work. Optimism will be sapped from us, the sense that we can achieve, especially through establishing our own businesses, will be taken from us. We are returning to a kind of feudal society in which we remain in our place in society and the bulk of us get the basics we need to surivive at the sufferance of our suppliers. Once we become old or no longer useful we are discarded. I think if even Winston Churchill, the Conservative prime minister (1940-5; 1951-5) let alone the ministers of Clement Attlee's Labour governments (1945-51) would look in utter horror at beggars so numerous on Britain's streets. We are charging back to the Victorian era with the plutocrats farther reaching and more powerful than ever before.
Suddenly while writing this a quote came back to me which I managed to track down and now it seems eerily prescient. It was made in 1983 by Neil Kinnock warning the audience about what would happen if Margaret Thatcher won the election (which she did with a large majority). He was Shadow Cabinet spokesman on education at the time but went on to lead the Labour Party to defeat in 1987 and 1992. He was condemned as a 'windbag' but actually was more a old school speaker who used rhetoric in the way Welsh politicians of the past like Aneurin Bevan and David Lloyd George did, so was increasingly out of step with the 'sound bite' era rising in the 1980s. This, I think seems a classic and it may weaken my argument to refer back so far for a comment and to someone unsuccessful, but I do not think it weakens the warning which is probably even truer now than it was 25 years ago.
"... I warn you.
I warn you that you will have pain — when healing and relief depend upon payment.
I warn you that you will have ignorance — when talents are untended and wits are wasted, when learning is a privilege and not a right.
I warn you that you will have poverty — when pensions slip and benefits are whittled away by a government that won’t pay in an economy that can’t pay.
I warn you that you will be cold — when fuel charges are used as a tax system that the rich don’t notice and the poor can’t afford.
I warn you that you must not expect work — when many cannot spend, more will not be able to earn. When they don’t earn, they don’t spend. When they don’t spend, work dies.
I warn you not to go into the streets alone after dark or into the streets in large crowds of protest in the light.
I warn you that you will be quiet — when the curfew of fear and the gibbet of unemployment make you obedient.
I warn you that you will have defence of a sort — with a risk and at a price that passes all understanding.
I warn you that you will be home-bound — when fares and transport bills kill leisure and lock you up.
I warn you that you will borrow less — when credit, loans, mortgages and easy payments are refused to people on your melting income.
...
— I warn you not to be ordinary
— I warn you not to be young
— I warn you not to fall ill
— I warn you not to get old."
As the Italian historian Donald Sassoon (see 'One Hundred Years of Socialism: The West European Left in the Twentieth Century' (1998)) who has spent his life looking at Socialism, has argued, actually more things that Socialists aim for such as health care, education, care of the elderly, decent salaries and working conditions, etc. are not achieved when capitalism is in crisis but when it is booming. I have termed this 'democratic capitalism' in that while consumers and workers are still effectively exploited, they also receive protection from the worst fluctations of the capitalist economies. In addition, there is an element in this 'democracy' which tends to get overlooked. The workers and the big capitalists are the usual focus of commentary on our economies, but I would argue, that those who make the jump and stop working for someone else and begin running their own business are also a characteristic of that democratic element. In the same way one would contrast say a monarchy in which only members of the royal family could run the country with a democracy where, in theory, anyone can be elected prime minister, and also take up many other lower positions locally, regionally and nationally to which they would have no access in a monarchy or a dictatorship. In the UK small business people gained this right gradually from the the 18th century onwards and while it took time for such people to be accorded anything like the access to influence that big businesses (especially those based on land) had, by the 20th century they had clearly won it. Thus, I see the ability of people to turn from workers to running small businesses as a further element of the democratic capitalism we once had. Of course many business go bust and these people return to the workers, but like someone who loses an election, generally they can try again.
So, you might be thinking, well this is a common example of capitalism with big business, small business and employees, with protection for those people who need it. However, I am arguing that such a form of capitalism is now dead and that we have almost reverted to the unfettered capitalism of the mid-19th century which meant the rich were immensely wealthy and the bulk of the population lived vicariously; in addition, the rich shaped all governmental policy and behaviour and anyone beneath them had no power. In addition, the ability to make the jump from worker to small business person is being crushed by the all encompassing corporations. In 1996 Michael Heseltine when Deputy Prime Minister (1995-7; he had been Secretary for Trade & Industry 1992-5) advised large companies effectively not to settle their bills to small businesses knowing that once they collapsed they would not be liable for the debt. This came from a leading Conservative and the party was supposed to be the one that backed business people whatever their size. Heseltine of course had become a millionaire at the age of 30 in 1963 so could be scathing of those struggling with small businesses. What this seemed to mark was a shift in the UK from backing any capitalism to backing the capitalism of the super-rich (or turbo-rich as they seem to be being called now). This was aided through the Thatcher years (1979-91) by selling off utilities which became very profitable businesses. On the surface this seemed to benefit small investors, but of course by the 1990s all their shares had been bought up by the big investment companies. Similarly encouragement to allow people to buy their council houses seem to be the democratisation of house ownership, but in fact with the slump of 1990-3 engineered by Thatcher's government and that of her successor John Major (1991-7) they lost control of these to the hands of multi-property owning landlords who rose to be millionaires too. Thus, the 1980s and 1990s saw the squeeze put on those people who would normally have been rising capitalists in favour of the richer.
Of course, Thatcher also ran through the welfare state stripping it of funds, making people feel guilty about using it and blaming anyone who did (which is one reason why millions of pounds of benefits go unclaimed each year), banning councils from building social housing, wrecking union rights, forcing public sector jobs to go to private companies paying the lowest wages, not allowing pensions to rise with inflation and so on. She did a very good job of stripping away so much of the safety net that had taken decades to construct. This is why the UK saw the rise of the underclass who have dropped out of society that no longer makes an effort to support them. Pressure on ordinary people came from many directions. I have noted how invidious the utility companies are and just today are reports about the percentage of poor families with children who cannot afford to heat their homes properly. Due to the use of metered utilities poor people actually have to pay more for their fuel than rich people, the same goes for food as they cannot access out-of-town stores that have the cheaper food; they cannot get bank loans and even legitimate loan companies can charge quite legally many times as much interest as those richer people can access. Thus, the system is engineered in the UK that once you have fallen into the poor category you are never going to get out. Increasingly, nor are your children, as schools become more selective, and as I have noted in previous posts even intelligent poor children fall quickly behind at school, they are condemned to live the same lives as their parents, however hard they might work. Due to the attitudes fostered in the 1980s such people are made to fill guilty and portrayed to the rest of us as lazy and deserving of their situation. Every class has lazy people in it, but poverty is an incredible motivator and I believe the greatest scroungers are among the rich.
So, for over twenty years, Britain has been moving to a less democratic capitalism, in which those who have least ability to pay are paying more. This was shown most sharply by the so-called Community Charge (better known as the Poll Tax) introduced to Scotland in 1989 and to the rest of the UK in 1990 and scrapped in 1993 following some of the most severe civil unrest the UK had seen for almost a decade. This tax was deemed 'fair' because everyone in a district no matter what they earnt paid the same amount to live in a house or flat in that district no matter how scummy or luxurious the property was or if they just rented one room in a house or had a whole mansion to themselves. About 1 million people disappeared from records overnight as they sought to avoid being stung by this tax which made up much more of your outgoings if you were poor or if you were rich. Even now in a borough like Tower Hamlets (small but densely populated, in East London) there are 60,000 (out of a population of over 200,000 people) fewer on the census register than registered with local doctors, because of the lingering fear of being found, despite the shift to the Council Tax which is based on property size.
Despite this steady erosion democratic capitalism it has now entered a new phase going beyond even the rich of the past. Even they are weak in the new set-up. This has been highlighted in a new book 'Who Runs Britain? How the Super-Rich are Changing Our Lives' by Robert Peston (2008) which though apparently flawed, highlights how that the people who run the UK are these so-called 'turbo-rich', going beyond the plutocrats of the past in their wealth and power. Of course Thatcher laid the ground for this by scrapping restrictions on taking capital generated in the UK out of the country, though this was simply jumping the gun as the EU insisted on it for all member states by 1990. Now, if a wealthy individual dislikes the government's policies they can simply threaten to shift some of their wealth elsewhere. Apparently, according to Peston the 1000 most wealthy people in the UK (out of a population of 62,000,000) owns £360,000,000,000 (€496 billion; US$716 billion) equivalent to 50 times the economy of Uruguay; roughly the same as the economy of Taiwan or Indonesia (which are the 20th and 21st richest countries in the world; about £10 billion more than even oil-rich Saudi Arabia in 22nd place). Beneath this 1000 must be many more billions owned and think of this replicated across the USA, Germany and Japan. In past postings I have referred to a map which showed the percentage of people living in various parts of the UK who were wealthy enough to be exempt from the norms of social behaviour. These 1000 people are rich enough to be exempt from the norms of government behaviour. They can murder people, make them disappear, drive them out of their homes and business and no-one can stop them.
You may say, well there have always been the rich. What is worsening the situation is the permitting of things like equity funds which simply buy up successful businesses and then load them with debt like a parasite draining their host rather than allowing that business to grow, pay better wages and employ more people. The richer you are the smaller a percentage of your income goes on tax. Multi-national companies learned this as early as the 1910s with oil companies leading the way. Peston claims that the tax 'efficiencies' of the super-rich deprive the government of equivalent to the rest of us paying 5p in the £ (i.e. a 5% tax rate) and so equivalent to hundreds of schools, hospitals, houses, battleships, space rockets, whatever you want to spend it on. This is just what we lose through their tax fiddles. They have distorted the economy of the whole South-East of England as I have noted before, pushing the cost of housing out of the reach of the bulk of even well-off people, and because their friends in the Thatcher regime smashed social housing, people cannot fall back on that as they would do in the past. It is almost as if these super-rich want to rub our noses in the muck to show how deprived we actually are. They are further pushing into health care, prisons, the Post Office, all the utilities, places where we previous got a bit of leeway if were not that rich, or in fact just comfortable. It is as if it is not only their greed wishing to earn more than whole states, it is that they feel they have to get us back for the 20th century when they were pressed a little bit to contribute to the rest of the population who actually power the businesses that they suck money from. Now we are being told, you stepped out of line, accept your station, here is the whipping to remind you not to get cocky again, not to ask for a welfare system, but to fight with each other for health and a house and an education so that you have no strength and we can pay you as low as we like to.
This is what the New Right agenda of the mid-1970s was working to. It was put into action in the 1980s and 1990s in the UK and the USA effectively forcing other more reluctant countries to follow suit (now with Sarkozy in France even the last outpost of a welfare society is being dismantled) and the countries coming out of Communism to rush blindly down the same path. As I have noted before Bush has favoured the super-rich as his core constituency and has engineered wars on their behalf (I think they fear fundamentalist Islam because it does not support consumerism and Iraq was just about the oil supply and business opportunities anyway). In Britain Blair was too enamoured of the Thatcher image to challenge it and even courted the super-rich. Maybe a Labour victory in 1992 was the last chance to reverse it, maybe it was too late by then, it certainly is now.
So what is our future? Well, probably by 2030 we will look very much like 1830. The welfare state is crumbling so fast in the UK that free at point of need dentistry is all but gone and health care will follow. Schooling is increasingly segregated and opportunities increasingly limited. There will always be a few people who will break out, but increasingly it will be because they win the lottery or a talent show than through hard work. Optimism will be sapped from us, the sense that we can achieve, especially through establishing our own businesses, will be taken from us. We are returning to a kind of feudal society in which we remain in our place in society and the bulk of us get the basics we need to surivive at the sufferance of our suppliers. Once we become old or no longer useful we are discarded. I think if even Winston Churchill, the Conservative prime minister (1940-5; 1951-5) let alone the ministers of Clement Attlee's Labour governments (1945-51) would look in utter horror at beggars so numerous on Britain's streets. We are charging back to the Victorian era with the plutocrats farther reaching and more powerful than ever before.
Suddenly while writing this a quote came back to me which I managed to track down and now it seems eerily prescient. It was made in 1983 by Neil Kinnock warning the audience about what would happen if Margaret Thatcher won the election (which she did with a large majority). He was Shadow Cabinet spokesman on education at the time but went on to lead the Labour Party to defeat in 1987 and 1992. He was condemned as a 'windbag' but actually was more a old school speaker who used rhetoric in the way Welsh politicians of the past like Aneurin Bevan and David Lloyd George did, so was increasingly out of step with the 'sound bite' era rising in the 1980s. This, I think seems a classic and it may weaken my argument to refer back so far for a comment and to someone unsuccessful, but I do not think it weakens the warning which is probably even truer now than it was 25 years ago.
"... I warn you.
I warn you that you will have pain — when healing and relief depend upon payment.
I warn you that you will have ignorance — when talents are untended and wits are wasted, when learning is a privilege and not a right.
I warn you that you will have poverty — when pensions slip and benefits are whittled away by a government that won’t pay in an economy that can’t pay.
I warn you that you will be cold — when fuel charges are used as a tax system that the rich don’t notice and the poor can’t afford.
I warn you that you must not expect work — when many cannot spend, more will not be able to earn. When they don’t earn, they don’t spend. When they don’t spend, work dies.
I warn you not to go into the streets alone after dark or into the streets in large crowds of protest in the light.
I warn you that you will be quiet — when the curfew of fear and the gibbet of unemployment make you obedient.
I warn you that you will have defence of a sort — with a risk and at a price that passes all understanding.
I warn you that you will be home-bound — when fares and transport bills kill leisure and lock you up.
I warn you that you will borrow less — when credit, loans, mortgages and easy payments are refused to people on your melting income.
...
— I warn you not to be ordinary
— I warn you not to be young
— I warn you not to fall ill
— I warn you not to get old."
Wednesday, 2 May 2007
This isn't the Age of the Train
The title of this post comes from a 1970s television advertisement promoting the use of the railways in the UK: 'This is the Age of the Train' it would say. It was fronted by a man now called Sir Jimmy Saville, a successful DJ of the time and charity fundraiser, back on (cable) television now, again hosting 'Jim'll Fix It' which for many years gave children and some adults the chance to have dreams come true, like meet a favourite celebrity.
Anyway, putting Sir Jimmy aside, how different is the railway network in the UK today? In 1993 it was privatised in the last of the big sweep of selling off state run industries that had started under Margaret Thatcher in the 1980s. As with all privatisations, many people benefited both from the share deals and from running the companies. The service is now provided by a range of companies, none of which is particularly good. In particular it is a nightmare if you want to pick up connections across the country. Trying to travel to York from Southampton and back recently would have meant going on 4 different companies' trains excluding the London Underground section. Costs have risen so much that it is now cheaper to fly from the South of England to Scotland or even Yorkshire rather than take the train. The far systems are a nightmare and the people who staff the call centres often have little idea about what the best one is for you. On more than one occasion I have seen people suffer heavy fines because, unknown to them, they had got the wrong sort of ticket. In one case the guard would not even issue a receipt to show that the passenger had paid the fine leaving them open to a repeat fine when the next guard came on duty.
GNER (a.k.a. Great Northern) a company that runs trains in North-East England (and I know many of you will know much of what I am saying, but I include the background for people from other countries, not alive at the time and for the time when my words are still drifting around the internet and the world has altered a great deal) apparently has the worst reputation with up to 9 different sorts of fares for the same service and penalties of up to £100 if you happen to have got the wrong ticket. Fortunately I have not travelled with them ever, but most other rail companies behave similarly if to a lesser extent.
In 1996 even the Conservative Party who had been behind privatisation admitted it had made a mistake separating the rail service from the responsibility for track and services. There are 27 companies running services in the UK at present, though some of these overlap in ownership like Virgin Trains West Coast and Virgin Trains Cross Country. Disasters such as Southall - 1997, Ladbroke Grove/Paddington -1999, Hatfield - 2000, Potters Bar - 2002 can be seen as a result of the division of track and service responsibility. Though, note, worse casualties happened at Clapham in 1988 and there was the Purley crash in 1989 both before privatisation.
People forget that Otto von Bismarck, the German Imperial Chancellor 1871-90 began the nationalisation of railways in Germany a task completed by the end of the First World War. Under a Conservative government in 1923 the number of companies was reduced to only 4, so all the nostalgia for the multiple train companies of the Victorian era when each company serving a town would have its own station (even a comparatively small place like Oxford had two stations next door to each other and Birmingham had three companies each with passenger and with freight stations) is misplaced. Fortunately it seems that Scottish trains may be brought back under unified state control.
At a time when we are trying to reduce pollution, how come the UK has adopted a path that drives people as fast as it can from using railways because of cost, poor service, confusing regulations and difficulty in scheduling a journey over different parts of the country? It has driven me to driving. The personal price is I save money, but get more stressed and get to read fewer books.
Anyway, putting Sir Jimmy aside, how different is the railway network in the UK today? In 1993 it was privatised in the last of the big sweep of selling off state run industries that had started under Margaret Thatcher in the 1980s. As with all privatisations, many people benefited both from the share deals and from running the companies. The service is now provided by a range of companies, none of which is particularly good. In particular it is a nightmare if you want to pick up connections across the country. Trying to travel to York from Southampton and back recently would have meant going on 4 different companies' trains excluding the London Underground section. Costs have risen so much that it is now cheaper to fly from the South of England to Scotland or even Yorkshire rather than take the train. The far systems are a nightmare and the people who staff the call centres often have little idea about what the best one is for you. On more than one occasion I have seen people suffer heavy fines because, unknown to them, they had got the wrong sort of ticket. In one case the guard would not even issue a receipt to show that the passenger had paid the fine leaving them open to a repeat fine when the next guard came on duty.
GNER (a.k.a. Great Northern) a company that runs trains in North-East England (and I know many of you will know much of what I am saying, but I include the background for people from other countries, not alive at the time and for the time when my words are still drifting around the internet and the world has altered a great deal) apparently has the worst reputation with up to 9 different sorts of fares for the same service and penalties of up to £100 if you happen to have got the wrong ticket. Fortunately I have not travelled with them ever, but most other rail companies behave similarly if to a lesser extent.
In 1996 even the Conservative Party who had been behind privatisation admitted it had made a mistake separating the rail service from the responsibility for track and services. There are 27 companies running services in the UK at present, though some of these overlap in ownership like Virgin Trains West Coast and Virgin Trains Cross Country. Disasters such as Southall - 1997, Ladbroke Grove/Paddington -1999, Hatfield - 2000, Potters Bar - 2002 can be seen as a result of the division of track and service responsibility. Though, note, worse casualties happened at Clapham in 1988 and there was the Purley crash in 1989 both before privatisation.
People forget that Otto von Bismarck, the German Imperial Chancellor 1871-90 began the nationalisation of railways in Germany a task completed by the end of the First World War. Under a Conservative government in 1923 the number of companies was reduced to only 4, so all the nostalgia for the multiple train companies of the Victorian era when each company serving a town would have its own station (even a comparatively small place like Oxford had two stations next door to each other and Birmingham had three companies each with passenger and with freight stations) is misplaced. Fortunately it seems that Scottish trains may be brought back under unified state control.
At a time when we are trying to reduce pollution, how come the UK has adopted a path that drives people as fast as it can from using railways because of cost, poor service, confusing regulations and difficulty in scheduling a journey over different parts of the country? It has driven me to driving. The personal price is I save money, but get more stressed and get to read fewer books.
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