From Thatcher to
Euro-Thatcherism
Countdown to war begins
THE WAY for an invasion of Traq by the United States and is allies was cleared by the adoption on November 30 of a
UN Security Councit resolution authorizing the use of force, if rag does not quit
Kuwalt before January 15.
There can now be no doubt about Washington's intentions. The first such resolution provided the cover for the
Korean War.
Today, It is the bureaucratic regimes themselves, which speak in the name of socialism and anti-imperialism, that have directly given their endorsement to unleashing a holocaust against iraq. Washington has the explicit, if hesttant support of Moscow. Desperate to gain the acceptance of the capitalist powers and even to assimilate to the capitalist system, the Soviet bureaucrats nave cast aside pretences of supporting a struggle for a new world order. The Chinese refusal to vote for the resolution reflected nothing more noble than an interest in showing that it can dely international condemnation of its repressive internal policy, in any case, it gave backhanded support to the imperialist effort, abstaining when it could have vetoed the resolution.
Now, nothing stands in the way of a tragedy, possibly of historic scale, in the Middle
East, except the antiwar movements in the Imperialist countries and the nationalist ones in the Arab world, The US antiwar movement, draw-
Ing on the tradition of the mass mobilizations against the war in Vietnam, has already shown signs of taking off. It has gained considerable attention, therefore, from the mass media in the other Imperlalist countries. The polls show that the American people do not want war, It is now essential to step up the antiwar mobiliza tions. They must, and can, stop the war. *
BANT "I'll be glad when we have a classless society - I never could stand the poor." HATCHER fell crushed between the resistance of the working class on the one side and the attempt to pursue a policy independent of European capital on other. replacement by John Major represents the capital towards Europe, but it does not indicate a softening of the attacks on the working class. Quite the reverse - the rise of what can best be described as "EuroThatcherism" means a reorientation toward Europe but the retention of the same policies of mass unemployment and anti-trade unionism that characterized Thatcher herself. This time these attacks will be reinforced by Britain's recent membership in the Exchange Rate Mechanism (ERM) of the European Monetary System.
Underlying Thatcher's resignation and the divisions within the Conservative Party and ruling class which it reflects, was the disintegration of the economic project embarked on by the Tories in 1979. This involved an attempt to use the resources created by North Sea oil to impose a profound defeat on the working class while maintaining an economic orientation and political system rooted in Britain's imperial past — the dominance of the City of London, overseas investment and a military apparatus out of all proportion to the real strength of the British economy, all at the expense of undermining the UK's domestic economy.
For two years after 1979, the Thatcher government allowed British domestic manufacturing industry to collapse. Brit-
GULF CRISIS / BRITAIN THE RESIGNATION of
Margaret Thatcher as British
Prime Minister and her replacement by John Major is the most dramatic explosion in the Tory [Conservative] party for over a decade. The removal of Thatcher signals the end of a particular project of the bourgeoisie and the beginning of a reorganization of British politics. JAMES BROOK ish manufacturing fell by more than 15% - the greatest decline since the aftermath of World War 1. All restrictions on the export of capital were lifted and a net outflow of $200bn took place over the next decade. The balance of payments was funded through North Sea oil revenues and booming financial services. Unemployment soared to over three million on official figures and four million in real terms.
Simultaneously a major reorganization of the UK's domestic economy was undertaken. A programme of privatization began — including telecommunications, steel, the ports, gas, electricity and water. Trade union laws were tightened, with restrictions on picketing, the outlawing of the closed shop [compulsory trade union membership], and the seizure of assets of unions engaged in industrial struggles. Specific groups of workers — above all the miners, but also the steelworkers, dockers and printers — were singled out for exemplary defeat. On the political front, the Labour Party split in 1981 with the formation of the Social Democratic Party — the majority of which went on to fuse with the Liberals after the 1987 election.
After initial hesitations, the ruling class united behind the government's economic programme. British financial capital gained from the widening of the scope of its international operations. The oil companies — a major sector of British capital - gained from the North Sea oil boom. Mayor mesay urinestmens began to rap 3 idly diversify investment abroad
International Viewpoint #196 • December 10, 1990
BRITAIN around 50% of the profits of the top 100 UK firms now come from overseas operations. At the same time the government's calculation was that the resulting unemployment would crush the resistance of the working class, and, on that basis, the domestic manufacturing base of British capital would be rebuilt together with the profits of its manufacturing firms.
Initially, this strategy worked brilliantly for capital. The share of GDP accounted for by company profits soared from under 12% in the depth of the recession in 1981 to over 19% in 1984.
At the same time the revenue from North Sea oil allowed a substantial increase in the living standards of a large proportion of the employed working class — real wages rose by 27% in the decade after 1979.
The working class was split between a large section hit by unemployment and its effects, such as low pay, and another part gaining economically from Thatcherism. In both the 1983 and 1987 general elections, substantial sections of high-paid skilled workers swung to vote for the Conservatives, while, on the other hand, riots broke out in the most deprived inner cities in 1981. With Labour devastated by the 1981 split, Thatcher won three consecutive general elections.
Boom and Thatcher collapse together
But the Thatcher government's economic policy was a product of the rise in commodity prices and the international financial boom after 1979, and it began to collapse with them. The oil price collapse of 1985 severely affected the balance of payments. In the stock market crash of 1987 UK capital lost almost a quarter of its overseas assets.
Sectors of UK capital oriented to oil and international financial operations were no longer able to take the strain of financing the UK balance of payments, which after 1987 has deteriorated into the worst deficit in British peacetime history. Furthermore the huge outflow of capital began to undermine the domestic economy. In 1989 the net outflow of long term capital was $40bn, 6% of GDP. This required foreign borrowing of $40bn, attracted by high interest rates which rose to 15%, with a devastating impact both on UK investment and on the Tory Party's electoral support amongst homeowners with mortgages.
Most fundamentally, despite terrible defeats inflicted on particular groups of workers in struggle - with the number of steelworkers cut by over 50%, the number of miners by 60%, and total defeat of the port workers - the working class was not beaten down severely and comprehensively enough to allow the sustained rebuilding of the profits of domestic industry. In 4 emment workers, defeated the govern- 1988 railworkers, and in 1989 local govment. In 1990 most of the major engineering employers were forced to concede a reduction in the working week from 39 to 37 hours after selective strike actions by unions. The working class was able to resist the attempt to cut its living standards and from 1989 on company profits plunged as the working class successfully defended real incomes — company profits fell from 17% of GDP in mid 1988 to 13% by mid 1990.
Government unpopularity deepened as mass opposition to the poll tax developed. By the beginning of 1990, a sharp economic recession was setting in. The UK economy had arrived in an impasse, both domestically and internationally.
But, while the decisive factor which broke Thatcher was her inability to grind down the working class, the immediate occasion for her resignation was the crisis of orientation provoked by this former fact inside the ruling class in its relation
In the period of the oil boom, Britain's North Sea oil reserves were a major asset for the EEC and also allowed the UK to run trade surpluses with almost all EEC countries. The UK was in a relatively strong bargaining position - achieving significant reductions in its payments to the EEC budget. Thatcher was therefore at first able to maintain a relatively strong position for British capital within the EEC hierarchy despite the run down of the domestic economy.
But with the collapse of oil prices, the UK's bargaining position collapsed also, and the already dominant position of Germany and France was further strengthened. Given Britain's weak domestic manufacturing economy, Thatcher understood that the UK could not participate in the moves towards greater monetary harmonization undertaken by France and Germany without immense economic and political difficulties. The traditional petty bourgeois economic base of the Tory Party would furthermore be destroyed by moves towards European economic union. In the 1989 elections to the European parliament, Thatcher attempted to consolidate the Tory Party around a "Gaullist" attitude to Europe.
But the result was a double debacle. British capital, for which participation in the post-1992 European system is more important than the Tory Party's electoral considerations, found Thatcher's policy unacceptable. Thatcher's Chancellor of the Exchequer [Finance Minister] Lawson, resigned over Britain's delay in joining the ERM. Michael Heseltine, one time defence minister - who had resigned from the government in 1985 because he favoured selling the Westland helicopter company to a European as opposed to a US firm — had steadily built up a proEEC leadership challenge within the Tory Party.
Decisive defeat in Euro-elections
Second, the working class was concerned by the deteriorating economic situation, particularly rising inflation and the effect of high interest rates, rather than Thatcher's grandiose dreams, and was by this time turning decisively against the government. In June 1989, in the European elections, Thatcher suffered her first defeat in a nationwide election.
From autumn 1989 onwards, the writing was on the wall. A token candidate was put up against Thatcher for the Tory Party
December 10, 1990 • #196 International Viewpoint leadership in October 1989.
of Cabinet [the
A series inner-circle of the Government] resignations took place
BRITAIN support for current economic policies and, in particular, membership of the ERM. The latter must be an issue placed throughout the following year - including that of Thatcherite industry minister Nicholas Ridley following SIONS his anti-German outburst. Finally, the resignation of the deputy prime minister, Geoffrey Howe, over Thatcher's refusal to endorse plans for economic and monetary union put forward at the EEC's Rome summit, precipitated Thatcher's downfall.
Confronted with this debacle all three of the challengers for the succession to Thatcher - Chancellor of the Exchequer John Major, Foreign Secretary Douglas Hurd and PLANTU Michael Heseltine - proposed, in different degrees, to rationalize the government's activities in a common direction — eliminating the most extravagant anti-working class provocations, notably the poll tax, and improving relations with the EEC.
But the removal of Thatcher does not represent a shift towards a new and less severe economic order. On the contrary, the core of the policy will be an even more severe drive to force down wages. This is to be achieved through increased unemployment and closer integration with West European capital. This is clear from the policies proclaimed by all sections of the Tory Party, and most notably the new prime minister, John Major. All propose to "build on the achievements of" Thatcher, not eliminate them. No one has sug gested altering the anti-trade union laws — except to further tighten them. No one has talked about reversing the privatizations. No one has proposed to tackle mass unemployment.
The one new policy of the anti-Thatcher camp in the Tory Party was to still further tighten the screw on the working class through ERM membership. This, indeed, will mean stepped up attacks on the working class — leading to a rapid new surge in unemployment and a sustained attempt to reduce real wages.
Thatcher herself was removed because she opposed capital's turn towards Europe and combined this with bourgeois triumphalist attacks on the working class, such as the poll tax, which went beyond what was politically sustainable in the class relation of forces in Britain.
John Major, who was the preferred candidate of both the Thatcherites and big business (he was endorsed by both the Financial Times and the Times) supports acceptance of the turn towards Europe but, at the same time, wants to negotiate the best position for British capital within it. He is Thatcher's ex-chancellor and will maintain her attacks on the working class.
PENSORRY THAT'S THATCHERISM! Major is as hardline as Thatcher on the economy and the market but he does not share Thatcher's ideological opposition to the Thatcherites endorsement of him.
He brings the Tory party into line with the goal of integrating Britain with big European capital whilst pragmatically defending the specific position of British capital within this. Rather than putting forward the messianic British vision of Thatcher, he aims to defend the specific interests of British capital within a European framework.
The same applies on the social level. Major's policy means trying to drive down real wages, but without some of the specifically Thatcherite excesses example, he has gone out of his way to declare his commitment to the National Health Service. His opposition to the death penalty is well known and, unlike Thatcher and many of his own Thatcherite backers, he has in the past strongly opposed racism.
Attack on living standards
But despite the short term honeymoon for the Tories that will follow Thatcher's replacement, the fundamental political problem for British capital is that the attack on working class living standards implied by the present state of the UK economy and ERM membership is so severe that no government implementing these policies can hope to be popular. Current economic conditions and ERM membership would also destroy the support of a Labour government carrying them through. The problem for capital, therefore, is how to carry through a policy whose effects will be rejected by an overwhelming majority of the electorate under
The answer for capital is that every party in British politics must be committed to by all party leaders above "questioning". The Tories must carry the policies through regardless of the electoral consequences. Labour must be forced to promise to maintain such a policy if in government even though it would eliminate any basis for reforms. Such "Euro-Thatcherism" in reality will require a radical reorganization of the political system. cates we are coming to the end of an era in British politics -that of an alternation in government of a dominant Tory party and periodic right wing majority Labour governments. Such a system had its base in the strength of British imperialism. In foreign policy terms it rested on Britain's "special relationship" with the States — on whose role in stabilizing the international capitalist system the security of British overseas investment depended. The stable and subservient British Labour Party has existed as a part of this imperialist system. But this economic system has been in steady decline for the entire twentieth century although Thatcher made a last attempt to save it using the bonus of the resource of North Sea oil.
In the end the balance sheet of Thatcher's premiership is clear. She failed on all her own strategic objectives. Despite the North Sea oil and the disarray of Labour she never succeeded in increasing the Tory vote. She failed to make the domestic economy internationally competitive Her government disintegrated amid the pressure of working class resistance on one side and the new projects of the EEC
Major will equally fail because, essence, his economic project amounts to reorienting British capital into Europe, but trying to maintain Britain's imperial edifice in place. This combination, as with Thatcher, is more than the British economy can sustain. British capital is reaching the end of an historic road — the economy is beyond mere tinkering and even to achieve capitalist economic rationality a radical break with the imperialist past is
The insoluble problem for Major, and any Conservative leader, is that such a reorientation collides precisely with those sections of capital on which the interests of the Tory Party are most firmly based.
Amid Thatcher's fall the outline of what in the longer term will be a new party political system is therefore shaping itself in Britain. The firmest defenders of the European option in Britain are the Liberal Tory party and the right wing of the
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THAT'S ALL?
A bad result for the big bourgeois parties
International Viewpoint #196 • December 10, 1990
BRITAIN / IRELAND
Labour Party. The bourgeoisie must now try to create a system of government which gives permanent hegemony to these forces through Tory or Labour governments and finally through Tory-Liberal or
That will
Labour-Liberal coalitions.
require ending the first past the post electoral system based on Tory pre-eminence and a shift to proportional representation
A NEW shockwave hit the Irish political system with the and coalition government. This would be a shift to a "European" political system.
election of Mary Robinson as President of the 26 County
Such governments would maintain in
Southern State following a three-way contest on November 7.
place the essential anti-working class poli-
Robinson, a non-party feminist and civil rights lawyer cies of Thatcherism while integrating British capitalism into Europe. The interests backed by the Labour Party, Workers' Party, and the Greens, of capital have and will also make new took 38.9% on the first count and then went on to defeat the demands on the Labour Party under Kinnominee of the governing Fianna Fail party Brian Lenihan by nock — to tie Labour into pro-European capital, to bring in proportional represenover 80,000 votes on the second count.
tation, to sever the link with the unions, to
Only two weeks before such an outcome would have seemed break the left in the party, to bring Labour incredible. Lenihan, Tánaiste (deputy prime minister) in the to accept coalition with the Liberals.
The other side of the undermining of the