Tuesday, 9 April 2013

lest we forget -the unbridgeable gulf between us and the Thatcher approach

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The Liberal Party Constitution commits us to' ... create the positive conditions which will make a full and free life possible for all' . The last two words establish an unbridgeable gulf between us and the Thatcher approach. 

David Steel 1985

A journalist reporting the death of Thatcher tonight said that he learned the news whilst following Clegg on a campaign tour of Cornwall and reflected that Thatcher had a profound impact on our party.Writing in 1985 David Steel set himself the task of '...........presenting a constructive alternative to Thatcherism and ....'winning the intellectual argument against the new Conservatism.' .  Before considering what went wrong between then and now it is worth restating how the Party responded to Thatcher at the time.

As a party we valued Community and knew that individual freedom was enhanced and realised by working with other people to do important and enjoyable things. Unlike Thatcher we most decidedly believed in society.

For Thatcher the solution to the problems of the corporate state was to champion the dogma of free markets and to strengthen those government agencies like the police to control the inevitable social disorder and dissent. Civil liberties were not central to Thatcher's politics only 'economic liberty' which was only enjoyed by a few.

We saw the great importance of environmental politics and we knew that we could not leave it to market mechanisms to meet that great challenge. We appreciated that the state needed to be part of the solution and most of all we welcomed the implication that green issues required international co-operation You could not have an environmental solution in one country only.

Our internationalism, our federalism, contrast sharply with Thatchers jingoism. We did not share the Tory view that Britain was the first political principle. Our Liberal forbears had properly identified 'the warping influence of nationalism' and we were not interested in unlearning the lesson. As a party we stood against the military embodiment of that nationalistic policy -the Trident missile programme . Liberals had always opposed the concept of nuclear deterrents.

From the times of Grimond onwards we championed the European cause and Human Rights. For Thatcher (and later for Blair)  the closeness to America was the priority bringing Cruse missiles to Britain. Thatcher oppossed Mandela and stood by Pinochet.

Thatcherism is today remembered as an economic creed,even if key bits of it have been ditched-the mystical belief in controlling the money supply and measuring M1 or M2 or M27. The dramatic shock that Thatcher delivered to the nations economy was wholly at odds with traditional Conservatism which disliked rapid change and believed in continuity and organic development. Thatcher gave us the Big Bang, deregulated free markets with minimal state intervention (well at least in theory because Thatcher's regulatory structure was far more interventionist that Gordon Brown's.)

This led to privatisation, the rapid decline of traditional manufacturing and the destruction of the communities that relied on them. The selling off of council houses and the installation of aspiration as the new political lode star.

It is of course perfectly possible to point to parts of this policy programme with approval. I never had much difficult with council house sales. I had seen enough of large neglected municipal housing estates to believe that there must be a better way. Like many in my generation I was influenced in this are by Colin Ward's book Tenants take Over  which championed tenants co-ops and the end of municipal control and patronage. I also saw the policy as one of the biggest redistributions of wealth by any government since Henry VIII. My criticism was that the policy failed to follow up with new social housing. The increase in home ownership did not offend me as it seemed to do for many on the left.

Equally the policy of wider share ownership did not present me with that greater problem. I wanted wealth to be diffused and not concentrated  in the hands of the state or private corporations. When Richard Wainwright and Sam Brittan suggested that individual citizens should be given shares in North Sea Oil as a way of distributing the windfall wealth that it produced I could see the point. .It is sad to reflect 30 years on that a large proportion of the council houses sold are now in the hands of large corporate landlord and the privatisation shares were quickly hoovered up by the useful suspects much, as the shares in the de-mutualised  Building Societies, were.Wealth is more unequally distributed today than it was when Thatcher came to power in 1979. That is not to say that pre 1979 we lived in Paradise, we did not.

There is some evidence that Thatcher understood some of the green issues and commissioned Chris Pattern to come up with policies to meet that challenge. They were timid and did not match our ambition for establishing new green businesses. The run down of loss making traditional industry was always going to happen but there were better ways which would have not led to the divided and fractured society she bequeathed us.

In the aftermath of Thatcher's second Victory in 1983 the Liberal Party was resolutely against Thatcher's free market revolution believing it to be as undesirable as the State collectivism of the then Labour Party. David Steel published a manifesto style collection of essays Partners in One Nation in which the contributors sought to outline a policy alternative to the socially divisive policies of Mrs T. It is not the greatest book of political policy ever written but it does clearly lay out where, after a term of Thatcher , the party leadership pitched its policy. Steel's vision for economic recovery was based on the economic thinking of a great Keynesian pupil and Nobel prize winner - Professor  James Meade

As his obituary in the Independent noted:

Meade was an egalitarian, both in his ideas and in his life. He felt that economics should concern itself not only with the size of the cake but with how unequally the cake was distributed. For the sake of greater equality one should be willing to accept some loss of efficiency. Thus economic policy analysis required a framework in which any proposal (on trade, taxation, employment or whatever) could be evaluated by first describing its actual results and then assessing their impact on aggregate human welfare. Meade provided such a framework.

Meade had advocated various forms of social credit and citizens income for a long times as an alternative to social security doles. By 1985 he has settled on the view that full employment, growth, and a fair distribution of income and wealth would best be achieved if the state created a structure in which:

................ firms should become partnerships between labour and capital where each worker would receive a specified share of the firm's revenue. To make sure that outsiders were not excluded they could join with a lower initial claims than insiders. This became Meade's final vision of the good society.

Steel, like Grimond, was impressed by the worker owned enterprises in Mondragon and believed that their cooperative principles would increase productivity-as indeed recent studies by the Cass Business School confirms. He also held that they would be willing to pursue policies that prioritised the creation of employment over 'building share holder value'. What is fascinating from this distance was the willingness of Meade and Steel to contemplate a significant role for the state in arbitrating of wages and  using its power to support full employment as a key objective. Both abhorred the Thatcher policy of controlling inflation via policies whose consequence was mass unemployment. 

Liberal recognised that the state corporatism that characterised the Wilson and Callaghan years had failed. But the Thatcher alternative was not anymore attractive. After ther 1983 election there was another collection of Liberal essays that spelt out the role of Liberalism after Thatcher.  The Liberty 2000 Report which the Assembly adopted was another attempt to respond to the new political situation-but more of that another time. Suffice to say that Thatcherism was not the only alternative to Labour's failed corporate state, the trade union barons and an economy based on declining industries. Co-operation, partnership, the common interests were central to that approach as were internationalism,  environmentalism and civil and economic liberty for all -and the last two word an unbridgeable gulf between us and the Thatcher approach

1 comment:

  1. A major Liberal Party platform which predates "Thatcherism" was co-ownship which has lived on in efforts to give worklers shares in their companies.


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