Triumph of Thatcherism

The Coalition: Is this Thatcherism's last stand?

IN LAST Thursday's Financial Times, Robert Skidelsky asked: 'Who governs - government or the financial markets?'. In this he repeats the 1974 cry of Edward Heath who then as Prime Minister asked: 'Who governs Britain - the government or the trade unions'. It seems, at the present time, we are at the mercy of the financial markets and that, according to Skidelsky, even if the Keynesian logic that national deficits are not harmful and that Keynes was right in insisting that the 'paradox of thrift' - increased saving and balanced budgets - will worsen the slump, this counts for nothing in the present climate because whatever the markets believe is the case will be the case even, says Skidelsky, if it's false.

Thus, Skidelsky argues: 'The current stampede to thrift shows that the re-conversion to Keynes in the wake of the financial collapse of 2008 was only skin-deep...'. And it was 'only skin-deep' because today the markets rule. Yet, if this approach fails in years to come then Skidelsky says: 'the challenge that financial power poses to good government has to be squarely faced.'

When in 1974, the then Prime Minister, Edward Heath, asked: 'Who governs Britain - the government or the trade unions?' - he lost the General election he'd just called. But as Skidelsky points out in the FT: 'Five years later British voters delivered a final verdict by electing Margaret Thatcher.' We all know what happened then as politics in this country took a turn which has haunted our society at every level ever since. Everything, it seems, is measured by the Thatcher standard and the market system: our economics, the ruling party and the Prime Minister of the day. Major, Blair, Brown and now Cameron, are all judged according to her yardstick; even so far as having the old lady round to tea at Downing Street. The reason a Keynesian economist like Skidelsky writes such an article entitled: 'Once again we must ask: "Who governs?" ', is because essentially the spirit of Thatcher still governs our political, financial and economic thinking to such a large extent.

Why?

Because, whatever the left says, her government did something that was previously thought impossible, in 1985 she beat the National Union of Miners (NUM) and the TUC. That was the triumph of Thatcherism that made possible a radical change in our politics, economics and our social culture. She, unlike her enemies, wasn't just a smart-arsed tactician but she had a coherent plan and a strategy. Just as Fascism, in the 1930s, was a counter-revolution against a revolution that never happened; so Thatcherism, in the 1980s, was a counter-revolution against a trade union challenge that was incapable of fulfilling its destiny. Indeed British trade unionism at that time and now, didn't have any proper idea of what was meant a having a destiny and Scargill, though a brilliant tactician was hopeless at strategy. The trade union challenge in the 1980s was one of defence of the status quo through the will of a conservative and pragmatic community. Today, the main weakness of the British left and the trade unions is this fundamental conservatism and pragmatism. Today, the parties of the left and the unions have no serious program or strategy save to oppose and react against the establishment at every opportunity. This is as true of the anarchist movement as it is of the parliamentary Labour Party and all the political odds and sods in between. The left-wing theme is to emphasise the negative nature of politics and to go unto the defensive: 'Stop the BNP'; 'Defend the Welfare State'; 'Resist the Cuts'; 'No 2 EU'; 'Save Our Jobs' and so on - all scope to sate the appetites of all those soapbox revolutionaries with their inconclusive street-wide rallies endangering nowt but the occasional window and policeman's helmet.

Robert Skidelsky is able to ask 'Who governs?' precisely because Thatcherite thinking is so well embedded in our culture and body politic and he writes: 'If markets have come to the view that deficits are harmful, they must be appeased, even if they are wrong.' If only because [w]hat market participants believe to be the case becomes the case, not because their beliefs are true, but because they act on their beliefs, true or false.' Skidelsky claims: 'we are about to embark on a momentous experiment', a test to see if the Keynesian view that balanced budgets make slumps worse or if the coalition government's view that only 'fiscal consolidation' will give us a 'recovery and fast growth' is right. Now we must wait and see what happens; as I listen to the words of George Osborne ringing in my ears: 'This budget will be tough and fair!' No doubt, Lord Skidelsky will be hoping to sell his latest book entitled 'Keynes: The Return of the Master' whatever the outcome for the rest of us.