A thank you to Brexiteers.

[Artaxerxes]

Which riots were connected to brogdale assertion of 1968 being the year capital took its neo liberal turn?

You’d have to ask them

 

[bimble]

That's the year my dad got here, after the abrupt end of the 'prague spring' in his home country. That whole thing might have boosted the confidence of people like thatcher, if they were watching which i'm sure they were.

 

[The39thStep]

Whenever I see the 1973 OPEC Oil crisis exogenous shock cited as the root of/orgins of the present shit-show, I'm always tempted to say go back further, or at least 5 years before to the events of '68 when, IMHO, capital decided to walk away from the "post-war social contract" or whatever we might call the compromises that capital made in the period when they feared really existing system competition. I think that was the point that increasingly globalised, incipiently financialised corporations realised that whatever they gave to labour it would never be enough and they took the neoliberal turn.

Which blocks of capital in 1968 are you referring to ?

 

[brogdale]

Which blocks of capital in 1968 are you referring to ?

Not sure I understand the question, tbh.

 

[brogdale]

Lets not forget the Barber boom of 72-74

The early years of the 1970s were a period of rapid economic growth.

1. The Bank of England deregulated the mortgage market - meaning High Street Banks could now lend mortgages (not just local building societies). This helped fuel a rise in house prices and consumer wealth.
2. Barber Boom of 1972. In the 1972 budget, the chancellor Anthony Barber made a dash for growth - with large tax cuts against a backdrop of high economic growth.
3. Growth of Credit. It was in the 1970s, we saw the first mass use of credit cards (Access). This helped create a consumer bubble.

By 1973, inflation in the UK was accelerating to over 20%. This was due to:

• Rising wages, partly due to strength of unions.
• The inflationary budget of 1972.
• Growth in credit and consumer spending.
• Oil price shock of 1973, leading to 70% increase in oil prices.

The Economy of the 1970s

See previous decade - 1960s . The 1970s was not just an era of dayglow trousers, lava lamps and the emergence of punk rock. It was a traum...

econ.economicshelp.org

I wonder how much was due to rising wages, but I think it was the start of the boom/bust cycle we'd not seen since before WWII.

Yep, that was when government determined interest rates and tried to juggle a load of macro-economic/political goals simultaneously, not just the 2% inflation target. For a while in the 70's some inflation was not unhelpful as a way for governments to use the 'money illusion' to attempt to persuade workers that nominal wage increases somehow compensated for the beginnings of real-terms falling pay.

 

[brogdale]

And this was the beginning of the end for the working class?

That's quite a reductive take, but my understanding of the 'events' is that it was the combined action of student middle-classes and organised labour that really freaked De Gaulle into calling it a communist insurrection. That, and other destabilising social/socio-economic movements certainly seem to correlate with the rapidly globalising/financialising corporations taking flight from the previous 'social contract' of the post war years and marks the point where productivity and wages started to de-couple.

 

[two sheds]

Yep, that was when government determined interest rates and tried to juggle a load of macro-economic/political goals simultaneously, not just the 2% inflation target. For a while in the 70's some inflation was not unhelpful as a way for governments to use the 'money illusion' to attempt to persuade workers that nominal wage increases somehow compensated for the beginnings of real-terms falling pay.

And what sort of fuckwit would try that again but on a bigger scale? Ah

The parallels between last Friday’s audacious mini-budget, with its extensive tax cuts and its focus on boosting investment and growth, and Anthony Barber’s ill-fated ‘dash for growth’ budget in 1972 have been noted in several quarters. Paul Johnson of the Institute for Fiscal Studies, for instance, described Kwasi Kwarteng’s budget as, ‘the biggest tax-cutting event since 1972’, before noting gloomily that Barber’s budget is generally seen as ending in disaster.[1] And William Keegan, writing in the Observer, recalled Barber’s declared objective ‘To achieve a rate of growth twice as fast as in the past decade’.[2] The following months, both articles point out, would demonstrate the folly of seeking an accelerated rate of growth at a time of serious inflationary pressures.

The next bit's quite entertaining:

What has not been noted, however, is the strange symmetry in the way that both Barber’s budget and Kwarteng’s mini-budget were linked to the European policies of the Edward Heath and Liz Truss governments. One of the key rationales behind Barber’s budgetary radicalism, most historians agree, was to ready the United Kingdom’s economy to exploit to the full the economic opportunities opened up by the flagship policy of the Heath government, namely entry into the European Economic Community. ...


There is hence more than a hint of irony in the way in which a remarkably similar attempt to accelerate the growth rate of the UK economy through fiscal means is now being made by a government of staunch Brexit supporters intent on demonstrating the economic opportunities supposedly opened up by Britain’s departure from the European Union. As Robert Shrimsley wrote in the Financial Times almost as soon as Kwarteng had finished outlining his plans, ‘Finally, the Brexit that economic liberals wanted. While most supporters of leaving the EU were motivated by issues of sovereignty and immigration, a cadre of free-market Tories saw it as the gateway to the fabled Singapore-on-Thames. A lean, deregulated, low-tax state was the only logical economic strategy for a nation putting up barriers with its largest trading market. We are about to see how far down that river this vision takes us.’[5]

Kwarteng, Barber and Europe

The parallels between last Friday’s audacious mini-budget, with its extensive tax cuts and its focus on boosting investment and growth, and Anthony Barber’s ill-fated ‘dash for growth’ budget in 19…

blogs.lse.ac.uk

 

[The39thStep]

Not sure I understand the question, tbh.

Well you have now made reference to France and also described 'other destabilising social/socio-economic movements certainly seem to correlate with the rapidly globalising/financialising corporations taking flight from the previous 'social contract' of the post war years '.

I am wondering where else this taking flight by capital took place ie which countries in 1968

 

[Flavour]

I think brogdale that you can definitely trace a shift in attitude among the ruling class back to 1968, but the forces of the working class were too powerful to be taken on and defeated in open class conflict at that time -- there needed to be another decade of "softening up" organized labor before Thatcher was able to take on and defeat the unions, but even then it was a close-run thing. The 1973 oil shocks provided the external input that allowed the Western ruling class to go on the front foot and begin hacking away at the welfare state and so on, but I'm not sure it's accurate to say this process began in earnest in 1968, at least not in the UK.

 

[brogdale]

Well you have now made reference to France and also described 'other destabilising social/socio-economic movements certainly seem to correlate with the rapidly globalising/financialising corporations taking flight from the previous 'social contract' of the post war years '.

I am wondering where else this taking flight by capital took place ie which countries in 1968

Lot's of questions today The39thStep

I'm not sure I've been saying that capital's neoliberal turn occurred necessarily in 1968, but rather that the accelerated traction and implementation of ideas, (ideology?), and processes that have come to be known as neoliberalism, can perhaps better be traced to that year, rather than, say 1973, which is more widely known as a year of economic upheaval for the UK economy and other developed economies.

I sense that maybe you're not totally convinced by what i've been posting in here? If that's the case, I'm all ears.

 

[brogdale]

I think brogdale that you can definitely trace a shift in attitude among the ruling class back to 1968, but the forces of the working class were too powerful to be taken on and defeated in open class conflict at that time -- there needed to be another decade of "softening up" organized labor before Thatcher was able to take on and defeat the unions, but even then it was a close-run thing. The 1973 oil shocks provided the external input that allowed the Western ruling class to go on the front foot and begin hacking away at the welfare state and so on, but I'm not sure it's accurate to say this process began in earnest in 1968, at least not in the UK.

Yep, that expresses what I was getting at, but just a bit more clearly.

 

[The39thStep]

Lot's of questions today The39thStep

I'm not sure I've been saying that capital's neoliberal turn occurred necessarily in 1968, but rather that the accelerated traction and implementation of ideas, (ideology?), and processes that have come to be known as neoliberalism, can perhaps better be traced to that year, rather than, say 1973, which is more widely known as a year of economic upheaval for the UK economy and other developed economies.

I sense that maybe you're not totally convinced by what i've been posting in here? If that's the case, I'm all ears.

I always think that asking questions is often a sign of interest in the subject matter.

I agree more with@Flavour here at the moment, and as you have now said that you agree with him I suppose we are all in agreement of sorts. Taking the very valid point that Flavour makes about the strength of the working class in , and the example you gave of France , we find ourselves in a somewhat contradictory position of the working class revolt there winning a 10% pay increase, several reforms and the statutory recognition of trade unions in all workplaces yet at the same time Post 1968 wage inequality decreased in France.

the accelerated traction and implementation of ideas, (ideology?), and processes that have come to be known as neoliberalism, can perhaps better be traced to that year, rather than, say 1973,

If we take Italy for example one year after 1968 then we find the working class achieving a 40 hour week and large wage increases and a period where the distribution of wealth to the working class increased. In the UK from 1970 despite the implementation of the Tories Industrial Relations Act ( modelled on some American legislation) we have a period in which wage increases dominate until the end of that decade. So I need some convincing that in 1968 or indeed 1969 or 1970 that we see the accelerated traction and implementation of neo liberalism to any real extent or influence.

I think there were signs of crisis, first in American capital, despite its adventures in Brazil and the Dominican Republic , with its GNP and rate of profit declining in the late 1960s but ironically some of that was to do with the competition from European and Japanese capital.

The second area where I have doubt is this notion of a retreat by capital from some sort of post war social contract . Firstly it's the idea of a post war consensus is greatly disputed in even in UK labour history. Secondly, even though you gave France as an example, I don't see any evidence or even a debate that there was a post-war social contract in France. Where else might this term have been applicable in Europe? Three countries Spain, Portugal and Greece had dictatorships. It certainly didn't exist in the States never mind the other continents or the East European bloc.

 

[brogdale]

I always think that asking questions is often a sign of interest in the subject matter.

I agree more with@Flavour here at the moment, and as you have now said that you agree with him I suppose we are all in agreement of sorts. Taking the very valid point that Flavour makes about the strength of the working class in , and the example you gave of France , we find ourselves in a somewhat contradictory position of the working class revolt there winning a 10% pay increase, several reforms and the statutory recognition of trade unions in all workplaces yet at the same time Post 1968 wage inequality decreased in France.


If we take Italy for example one year after 1968 then we find the working class achieving a 40 hour week and large wage increases and a period where the distribution of wealth to the working class increased. In the UK from 1970 despite the implementation of the Tories Industrial Relations Act ( modelled on some American legislation) we have a period in which wage increases dominate until the end of that decade. So I need some convincing that in 1968 or indeed 1969 or 1970 that we see the accelerated traction and implementation of neo liberalism to any real extent or influence.

I think there were signs of crisis, first in American capital, despite its adventures in Brazil and the Dominican Republic , with its GNP and rate of profit declining in the late 1960s but ironically some of that was to do with the competition from European and Japanese capital.

The second area where I have doubt is this notion of a retreat by capital from some sort of post war social contract . Firstly it's the idea of a post war consensus is greatly disputed in even in UK labour history. Secondly, even though you gave France as an example, I don't see any evidence or even a debate that there was a post-war social contract in France. Where else might this term have been applicable in Europe? Three countries Spain, Portugal and Greece had dictatorships. It certainly didn't exist in the States never mind the other continents or the East European bloc.

Great to hear you think we're all in agreement of sorts! That must something of a first for this thread?

tbh, this whole topic area sounds like one in which you've done quite a bit of reading around. I'm not really sure that I'll be able to add anything much to what you already know. This your field, is it?

 

[two sheds]

Firstly it's the idea of a post war consensus is greatly disputed in even in UK labour history.

Can you expand on that? Ta

 

[The39thStep]

Great to hear you think we're all in agreement of sorts! That must something of a first for this thread?

tbh, this whole topic area sounds like one in which you've done quite a bit of reading around. I'm not really sure that I'll be able to add anything much to what you already know. This your field, is it?

No not really my field as such but feel as though I have an understanding of events of yhat period. I thought your contribution was useful and engaging however I do think that is always important to look at the agency of the organised working class as well as capital.

 

[The39thStep]

Can you expand on that? Ta

Will do tomorrow.

 

[brogdale]

No not really my field as such but feel as though I have an understanding of events of yhat period. I thought your contribution was useful and engaging however I do think that is always important to look at the agency of the organised working class as well as capital.

Glad to hear you thought my contributions were useful. I suppose I'm coming at this from an economics perspective and am interested about what your saying about the economic history of France, Italy and the UK in the 1970s. My take is that for many developed countries the period of early to mid 1970s marked some sort of inflection point beyond which its possible to discern trends of falling factor rewards to labour as neoliberal capital broke from the 'social contract' and ensured that increasing shares of the pie went to profit, interest and rent.

i agree that the agency of the, then still, organised working class ensured some degree of lag beyond 1968, but the period of fruition from neoliberal turn to actual changes in proportion of factor rewards is pretty swift. The FT graph below is a useful indicator of that inflection point in trend across a number of European economies with 1973/4 being a common point. I would argue that changes effected in that year would suggest policy ideas formulated at an earlier point.

 

[Artaxerxes]

Glad to hear you thought my contributions were useful. I suppose I'm coming at this from an economics perspective and am interested about what your saying about the economic history of France, Italy and the UK in the 1970s. My take is that for many developed countries the period of early to mid 1970s marked some sort of inflection point beyond which its possible to discern trends of falling factor rewards to labour as neoliberal capital broke from the 'social contract' and ensured that increasing shares of the pie went to profit, interest and rent.

i agree that the agency of the, then still, organised working class ensured some degree of lag beyond 1968, but the period of fruition from neoliberal turn to actual changes in proportion of factor rewards is pretty swift. The FT graph below is a useful indicator of that inflection point in trend across a number of European economies with 1973/4 being a common point. I would argue that changes effected in that year would suggest policy ideas formulated at an earlier point.

View attachment 373350

I'd assume that was when the crisis allowed "emergency steps" to be used for cover rather than prior planning

 

[Smokeandsteam]

Can you expand on that? Ta

There are 3 contingencies that I’d draw attention to:

1. On the right of British politics there was never a genuine buy in to the ideation of consensus, instead there was an accommodation with it for political expediency reasons. The intellectual roots of Tory monetarism didn’t emerge in 1968 or the 1979 but in the 1950’s: directly in response to the threat posed by the organised working class.

2. The tripartite system essentially incorporated the tops of the trade unions into the managerial state. Whilst this produced significant gains (which the left often overlooks) it also produced tensions.

The rise and growth of the shop stewards movement of the 1960’s was a response from rank and file trade unionists to the top down approach that removed their agency at a local level and which cut them out of the bargaining process. In addition, the trade union bureaucracy was required to hold back and push back against pay and other demands from the shopfloor when it came into conflict with with the agreements struck with government and employers. This led to inevitable tensions and fissures and the inevitable ruck that was ‘in place of strife’ and Donovan.

3. The periodisation on this thread is all over the shop. British capital moved against Wilson in 1964, Benn and the others on the left were warning of a number of developments - that led to the production of the alternative economic strategy - in 1966 the point at which inequality levels reached a low point and British economic growth its highest - that demonstrated British capital’s intentions: to offshore, to move money out of the UK, to agglomerate, to flood imports in: in short to actively undermine key principles of the national economy.

The shrug of the shoulders from the labour right indicated its own lack of genuine commitment to ‘the consensus’. The decision to pursue membership of the EU - opposed by the entire labour movement bar it’s right wing - was (rightly) seen by Benn and others as preparing the ground to accommodate the demands of capital.

ETA: as steps has said this is a particular experience in Britain. Basque steelworkers - living under Franco where their culture and unions were suppressed - wouldn’t recognise the term ‘post-war consensus’.

 

[brogdale]

There are 3 contingencies that I’d draw attention to:

1. On the right of British politics there was never a genuine buy in to the ideation of consensus, instead there was an accommodation with it for political expediency reasons. The intellectual roots of Tory monetarism didn’t emerge in 1968 or the 1979 but in the 1950’s: directly in response to the threat posed by the organised working class.

2. The tripartite system essentially incorporated the tops of the trade unions into the managerial state. Whilst this produced significant gains (which the left often overlooks) it also produced tensions.

The rise and growth of the shop stewards movement of the 1960’s was a response from rank and file trade unionists to the top down approach that removed their agency at a local level and which cut them out of the bargaining process. In addition, the trade union bureaucracy was required to hold back and push back against pay and other demands from the shopfloor when it came into conflict with with the agreements struck with government and employers. This led to inevitable tensions and fissures and the inevitable ruck that was ‘in place of strife’ and Donovan.

3. The periodisation on this thread is all over the shop. British capital moved against Wilson in 1964, Benn and the others on the left were warning of a number of developments - that led to the production of the alternative economic strategy - in 1966 the point at which inequality levels reached a low point and British economic growth its highest - that demonstrated British capital’s intentions: to offshore, to move money out of the UK, to agglomerate, to flood imports in: in short to actively undermine key principles of the national economy.

The shrug of the shoulders from the labour right indicated its own lack of genuine commitment to ‘the consensus’. The decision to pursue membership of the EU - opposed by the entire labour movement bar it’s right wing - was (rightly) seen by Benn and others as preparing the ground to accommodate the demands of capital.

ETA: as steps has said this is a particular experience in Britain. Basque steelworkers - living under Franco where their culture and unions were suppressed - wouldn’t recognise the term ‘post-war consensus’.

I think in some respects you're right to question the periodisation wrt the UK. if you look at the share of the factor rewards pie going to labour in the UK (% of GDP to wages) the inflection point is earlier, as you suggest:


If you set to one side the exceptional spike (73 -75) when GDP fell like a stone and wages lagged, the inflection point for the UK appears to be around 1962.

 

[brogdale]

But the one aspect of periodisation that I would come back to is the thing I was discussing with bimble yesterday, that those voting in 2016 who were then aged around 70+ would have likely had lived, working experience of rising living standards in the decade before the UK joined the EEC. I would argue that lived experience made them a particular target for the L campaigns' spurious arguments that it was joining that caused things to go to shite.

 

[The39thStep]

Glad to hear you thought my contributions were useful. I suppose I'm coming at this from an economics perspective and am interested about what your saying about the economic history of France, Italy and the UK in the 1970s. My take is that for many developed countries the period of early to mid 1970s marked some sort of inflection point beyond which its possible to discern trends of falling factor rewards to labour as neoliberal capital broke from the 'social contract' and ensured that increasing shares of the pie went to profit, interest and rent.

i agree that the agency of the, then still, organised working class ensured some degree of lag beyond 1968, but the period of fruition from neoliberal turn to actual changes in proportion of factor rewards is pretty swift. The FT graph below is a useful indicator of that inflection point in trend across a number of European economies with 1973/4 being a common point. I would argue that changes effected in that year would suggest policy ideas formulated at an earlier point.

View attachment 373350

Just a quick question as it's late.

You are comparing the impact of what you describe as neo liberal capital /the neo-liberal turn with what you describe as some form of 'social contract' capital whose distinguishing feature was a reduced share of the pie going to profit, interest and rent? The origins of this social contract capital are?

 

[brogdale]

Just a quick question as it's late.

You are comparing the impact of what you describe as neo liberal capital /the neo-liberal turn with what you describe as some form of 'social contract' capital whose distinguishing feature was a reduced share of the pie going to profit, interest and rent? The origins of this social contract capital are?

Quick answer, as it’s late; fear.

 

[bimble]

To protect any sort of meaningful national economy through the 2nd half of the 20th century (and refuse to let imports replace manufacturing etc) would have required a completely different kind of approach wouldnt it, that would have been the time to attempt a retreat from globalisation, 2016 a bit late.

 

[ska invita]

To protect any sort of meaningful national economy through the 2nd half of the 20th century (and refuse to let imports replace manufacturing etc) would have required a completely different kind of approach wouldnt it, that would have been the time to attempt a retreat from globalisation, 2016 a bit late.

No such thing as too late in politics
There is such thing as strategically the worst time and place though

 

[bimble]

It’s going to get interesting as the wage gap between China and places like the uk keeps shrinking, they & India are going to see wages rise higher than inflation this year I read somewhere and we just don’t make stuff anymore.

 

[The39thStep]

Can you expand on that? Ta

Ok, brief and rushed summary of criticisms of the 'post-war consensus. The common narrative is that the Tories did not or were unable to challenge the reforms of the post war Labour government, that the experience of the interwar coalition had built the foundations for consensus, and that the breakdown of the consensus was the Thatcher government.

This has been contested not just by Marxists but by other historians. Ben Pimlott is probably the most famous critic.

Opposition to the notion of consensus would say that despite the landslide victory of the Atlee government, the Tories opposed many Labour government policies. These would include nationalisation or proposals to nationalise both in the 1945 government and then also in the 1951 elections. This included the nationalisation of iron and steel , road haulage and sugar. Whereas the Atlee government centred around some forms of collective provision the Tories followed a policy of individual households ie the expansion of the economy for car ownership rather than public transport, for white household goods such as washing machines rather than council laundries, against rationing ( Labour thought rationing reduced some inequalities and actually campaigned on rationing in the 1951 election. The Tories ( and what was left of the Liberals) opposed identity cards, the direction of labour and their 1951 election campaign was based on Set Britain Free ( from socialist control) . The Conservatives opposed the rising of tax and its 1951 government cut public spending.

Pimlott also points out that one would expect in a consensus that party loyalty would dilute as voters may make adjustments of who to vote for on the question of emphasis rather than policy difference. In fact party loyalty in elections did not erode and in fact the Tories stayed in office for 13 years and then only narrowly lost the election.

The coalition government period as consensus has generally suffered the same fate as the myth of the blitz with a number of studies of days lost in strikes and stoppages and the jailing of strikers ( ironically the jailing of strikers continued into the Atlee years so at least there was consensus on that) . However there were some coalition policies that were enacted by the Labour government, the Education Act ( a Tory policy) , the Town and Country Planning Act, full employment ( both for the rebuilding of the economy and as a reform) and the Beveridge report ( written by the Liberals) .The Tories opposed the initial plans for the NHS ( ironically agreeing with the Morrison wing of Labour that the hospitals should be private/charity base) Other historians have also pointed out that the lack of opposition to the nationalisation of coal and railways was not one of ideology but simply that the private sector was in no position to finance the reinvestment of stock, machinery and infrastructure that was required .

There are also some views that Crossland's influence was a decisive break in any continuity /consensus in the direction of the Labour Party, that the Callaghan government was the first to announce a break with Keynesian economics and that both Tory and Labour governments were constrained in various ways by both the Cold War and the Bretton-Wood agreement.

 

[Doppelgänger]

It’s going to get interesting as the wage gap between China and places like the uk keeps shrinking, they & India are going to see wages rise higher than inflation this year I read somewhere and we just don’t make stuff anymore.

Banking is the main export these days, but who is wanting that?

They talk about global Britain, but I'd like to see them sell insurance services to some guy in Zambia.

The UK had complete unhindered access to the largest market in the world, but now thinks it can make up the deficit with trade deals on the other side of the world...

To put this all into context the whole African continent has a GDP less than France's.

The fact the UK has no manufacturing base anymore is really showing.

 

[bimble]

Yep. The starkest example might be energy, how through a series of shit decisions going back decades we are almost completely dependent on imports for that.

 

[Smokeandsteam]

To protect any sort of meaningful national economy through the 2nd half of the 20th century (and refuse to let imports replace manufacturing etc) would have required a completely different kind of approach wouldnt it, that would have been the time to attempt a retreat from globalisation, 2016 a bit late.

On the latter point globalisation is already in retreat/decline:

https://www.bis.org/speeches/230216_shin.pdf?utm_source=substack&utm_medium=email

The key features of the neoliberal orthodoxy of the last 40 years: outsourcing, offshoring, freedom of movement of capital and labour to new plunder zones are all slowing. Biden and Trump will both emphasise national economy measures in the US elections: isolationism, recovery, driving domestic demand, onshoring etc. where America leads others will follow

There is a debate about the extent to which the process above is occurring and where, but the peak years of globalisation seem to be in the past.

On your first point, Germany and elsewhere adopted a policy of ‘just transition’ to protect their national economy and manage the shift away from basic productive capacity. Had the political will existed - and had Thatcher been defeated by the organised working class -
we could have and probably would have some the same.