Thatcher’s 1980s neoliberal ‘miracle’ proposed that the answer to all economic woes was individual effort. But this will not sustain us in the looming cost-of-living crisis
In an interview with the Sunday Times in May 1981, Margaret Thatcher commented:
“It isn’t that I set out on economic policies; it’s that I set out really to change the approach, and changing the economics is the means of changing that approach. If you change the approach, you really are after the heart and soul of the nation. Economics are the method; the object is to change the heart and soul.”
It is this vision of society, which has since been dubbed ‘Neoliberalism’ that Thatcher and her American counterpart, Ronald Reagan, and many of their successors worked so hard to bring into being and subsequently sustain. The Encyclopedia Britannica describes neoliberalism as being characterised by a belief in sustained economic growth as the basis of societal progress; that only completely free markets will result in the most efficient way to allocate resources.
What does neoliberalism look like in action?
During her first term in government 1979–1983, Thatcher set out an ambitious project to sell off industries that had been nationalised after World War II, for example railways, water, gas, and electricity. By the time she was removed from office in 1990, more than 40 state-owned industries worth £60bn had been privatised.
Fast forward to today, weak UK regulatory systems dating from this time are responsible for the fact that many previously nationalised services are now owned by foreign companies. A large proportion of them are poorly managed but nevertheless return huge dividends to their directors. Price gouging has resulted in raising the prices of goods and services for British consumers, whilst much of the profit made is transferred offshore.
It seems that neoliberalism did not effectively recognise a fundamental feature of capitalism and monopoly, to the eventual detriment of the nation: that those who have the most resources can bury smaller players within the market by buying up their resources, creating a monopoly, then hiking up prices for consumers.
Thatcher also oversaw the sale of council houses to their owners, which benefited the generation of the time who bought houses at well below the market prices, but has now resulted in very sparse social housing for the current generation, many of whom now pay enormous rents to private landlords: ‘Generation Rent’.
Social inequalities and neoliberalism
So how did a mature social democracy get so quickly sucked into this quick fix/slow devastation illusion? The core problem lies in neoliberalism’s simplistic but tempting fundamental premise: a belief that human existence takes place on a level playing field in which each individual has the power to determine his or her fate through ‘entrepreneurship’; the concept of ‘meritocracy’.
We see this in the current Tory attitude to the huge problems currently facing the nation as the cost of living rises exponentially. The first thought of weak Thatcher tribute act Liz Truss is to propose that the issue would be solved if the British working class were better ‘grafters’. She does not have the life experience or social imagination to understand that many people in society did not start life with the social advantages offered to her.
She and her colleagues refuse to acknowledge that people in capitalist societies start from very different places, some being hampered from the very beginning by poverty and the stresses that this exerts on their day-to-day existence. It has been shown that living under the grip of grinding poverty even has an influence on human neuronal development in the earliest years of life.
And while lack of access to resources that are considered essential by the mainstream most obviously affects people’s day-to-day physical experience, a lack of ‘social capital’ (connections with powerful people in their social circles) runs alongside this.
Those living in poverty are therefore confronted with a range of difficult problems in order to meet their basic needs, and less opportunities to escape from this existence, absorbing much of their cognitive and physical energy. This was very effectively illustrated in the 2016 film I Daniel Blake.
Dissolving the illusion
The proof of the neoliberal pudding is very much in the eating: social inequality increased rapidly under Thatcher’s administration, and while the Blair years initially made some minor inroads into this, little has changed since that time.
The recent rise in the cost of living, most particularly the raising of utility prices to a level that will impoverish two thirds of people in the UK means that this graph will look very different when the early 2020s are added.
Juliet Lodge asks “Why are UK ministers and government spokesmen so coy, evasive and unwilling to recognise the state of the country they are supposed to be protecting and governing?” The answer is that the political philosophy that they have inherited from the previous generation of conservatism is empty and bankrupt, which leaves them utterly bereft of useful ideas.
So how did we all become trapped in this dangerous illusion?
Initially, Thatcherite propaganda offered a compelling solution to the cause of the late 1970s malaise, culminating in the ‘winter of discontent’ over 1978 and 79: that it had been created by a culture in which individuals had become too dependent upon the state to solve their problems, and that more personal effort – Truss’s ‘graft’ – was now required. Thatcher’s utility shares and council house bargain sales was an excellent public relations exercise, sold to the public by a slick advertising campaign that carried the suggestion of economic liberation for ordinary people.
This had the eventual effect of dissolving earlier depictions of down-trodden working-class people exhibiting strength and dignity, deserving respect and support for doing their best against steep odds. It was gradually replaced by a construction of the ‘poor’ and ‘unsuccessful’ as people who simply didn’t try hard enough and were therefore undeserving of support from the more fortunate. The most successful media products of the 1980s carried this message, neatly summed up in the famous meme from Oliver Stone’s Wall Street: greed is good.
which was echoed by Boris Johnson as Mayor of London in 2013.
As the 2000s dawned, digital media (eventually evolving into social media) and a fascination with reality television has accelerated this culture, inviting the public at large to judge, rank and comment on the worth of others, particularly those who fail to reach the exacting consumerist and aspirational standards peddled by advertising campaigns in pursuit of maximum profit.
This has perpetuated and inflated what sociologists refer to as a ‘social deficit model’ in which those who cannot ‘keep up’ become labelled as deficient in some way. Rayner 2011 utilises the Foucaldian “panopticon” concept to describe ways in which people surveil each other on social media:
“There are no guards and no prisoners in Facebook’s virtual Panopticon. We are both guards and prisoners, watching and implicitly judging one another.”
Don’t get fooled again
And so, as we move forward into the ‘astronomical inflation’ of the early 2020s, we are not only struggling with a series of unfortunate global events, as was the case during the 1970s, this time we face the coming storm bereft of the social democratic values created by our ancestors in the wake of the ubiquitous chaos and loss experienced in World War ll.
We go forward from a position in which our political leaders, like the fictional Gordon Gekko, define greed as good and profiteering, cronyism and disaster capitalism as the ways in which rational and successful individuals become wealthy.
In the film The Founder, McDonald’s director Ray Kroc describes the policy he pursued to business success:
“Business is war. It’s dog eat dog, rat eat rat. If my competitor were drowning, I’d walk over and put a hose right in his mouth.”
Inevitably, those who will suffer the most in an economy which runs along these lines are those who are least able to ‘perform’ – the young, the old, the disabled and those who take themselves out of ‘the market’ to provide care and support for them.
As such, we have arrived at a time in our history where we urgently need to question neoliberalism both in its foundations and its consequences. What do we want for our children and grandchildren’s future? A world in which it is conventional for citizens to band together to create a just, equitable and compassionate society, or a dog-eat-dog culture in which the strong bully the weak past the point of penury?
As The Who sung in the 1970s:
I'll move myself and my family aside If we happen to be left half-alive ... Then I'll get on my knees and pray We don't get fooled again
