Tuesday, June 24, 2008

1970s economic crisis It wasn't so bad. I was there

The Winter of Discontent in 1979, when “the rubbish went uncollected in the streets and the dead lay unburied in the graveyards” , was the climax to a pretty dismal decade. But it was nothing like as bad as what was to come. The 1980s has had a better press but only because history is written by the victors. For ordinary working people the Thatcherite 80s were a social and economic catastrophe, with three recessions, three million unemployed, the destruction of Britain as a manufacturing country and the end of social and economic security. Plus some truly dreadful haircuts.

The 1970s may have been defined by industrial confrontation, economic decline and the IMF riding to the rescue of the pound, but at least there was still a commitment to full employment and a degree of social equity. The music was a lot better too. Punk was a product of the 1970s, a nihilistic revolt by of the sons and daughters of the industrial working class, who realised that their ordered world was coming to an end. “No future”, snarled the Sex Pistols in 1977, as if in anticipation of Thatcherite Nemesis.

In 1977 I was at Edinburgh University, which was scarcely a hotbed of student radicalism, but had its moments. Gordon Brown had been student rector, and his Red Paper on Scotland had been published in 1975, calling for nationalisation of the means of production and workers control of industry. It was considered relatively moderate by the tenor of the times. The Communist Mick McGahey was the leader of the Scottish miners, who were still a huge industrial force. They were a moral and political force as well, even though the number of mines had fallen by a third in five years.

I still cringe when I recall going to Seafield colliery to sell copis “Workers Press”, with hair down my back and a tie die tee shirt. The miners were remarkably tolerant of these middle class dilettantes with their patronising ultra-leftism, and invited us up for tea and biscuits while they showed us their communist party cards and tried to talk sense about working through the Labour Party to deliver socialism. They all looked as if they were wearing eyeliner because the showers never quite washed away the coal dust.

Revolutionary romanticism was rampant among the students in the 1970. An easy indulgence in the days of generous student grants and long vacations where you could actually claim unemployment benefits. There was plenty to talk about in the ubiquitous Marxism study groups: we had had the three day week, the miners strike, the collapse of the Tory government in 1974, when Edward Heath went to the country on the platform of “Who Runs Britain: the Government or the Miners”...and lost. The SNP returned 11 seats in the general election that year, and caused a further shock wave through the UK establishment. Tom Nairn completed the first draft of “The Break up of Britain” in 1977.

Clearly, there was a decade-long confrontation of class and ideology in the 1970s. But for all the industrial confrontations, the endless strikes at Ford, the Grunwick occupation, Red Robbo at BL, Britain was never likely to join the Warsaw Pact. Teenage trotskyites talked of arming the workers and building the dictatorship of the proletariat, had no more future than the punks. The real revolutionaries turned out to be the Thatcherite Conservatives who seized the state after the 1979 general election and used it ruthlessly to privatise industry, destroy the miners, wreck the unions, end social housing and job security and promote social inequality by scrapping taxes on the rich. Not a shot was fired, but it was the end of an entire industrial way of life.

Was it all inevitable? Well, not the Winter of Discontent itself which would probably never have happened had the Labour Prime Minister, James Callaghan, not inexplicably called off the October 1978 general election. He would probably have won, in which case the rolling, national public sector strikes might never have happened. History isn’t written in advance, and while Labour had clearly run out of steam by the end of the 70s, the game wasn’t over. A coalition with the Liberals could have held Thatcherism at bay long enough to stabilise the economy. Britain might have turned out more like France or Germany - part of the European ‘welfare model’. Instead we turned into an industrial wasteland.

Could history repeat itself? Clearly, Labour is heading for defeat and Gordon Brown has, like Callaghan, bottled an election he would probably have won. But class confrontation is no longer possible in Britain, because the classes don’t exist any more. There are no industrial armies because there is no industry - only a superrich of city based plutocrats, a broad and diffuse middle class and an underclass living on the margins of existence. Of the three, only the rich are politically organised.

However, in the forthcoming Summer of Discontent, we may find that small groups of highly paid workers, like the Shell tanker drivers and the Grangemouth refinery workers, start to undermine the calls for pay restraint. Public sector workers may start to develop new forms of quasi-industrial action. In our complex inter-connected economy, there are any number of pinch points in information technology, transport and financial services where determined groups of salaried employees could cause a lot of trouble very fast. The middle classes are going to find that their earnings are about to be slashed just as their housing assets collapse in value. This could amount to an unprecedented collapse in middle class wealth. No one really knows how they will react. We may see a new form of anti-state militancy led by the very middle class intellectuals who used to dream of revolution in their youth.

History, to quote Mark Twain, doesn’t repeat itself, but it does have a habit of rhyming. There are similarities with the 1970s which are too striking to ignore, rocketing prices being the most obvious. The great inflation of the 1970s was blamed on militant workers, but they were really only defending their living standards after the event. The real cause inflation then, as now, was the quadrupling of oil prices and the decline of the value of the dollar. Western governments printed money and debased their own currencies - then they blamed the workers for their own mistakes. Some things never change.

There are signs that the politicians and bankers intend to reuse the same script: The Chancellor, Alistair Darling, gives pious warnings about inflation busting pay claims. The governor of the Bank of England, Mervyn King threatens to raise interest rates if people do not accept below inflation pay settlements. But as in the 1970s, no one has yet explained exactly why a dramatic lowering of spending power is going to benefit an economy which depends on consumer spending in the shops. The moral and economic case has not been made.

The deal is supposed to be that prices will come down later in the year - but with oil at $140 a barrel and global food prices out of control, the central bankers and chancellors know perfectly well that this is most unlikely. The stark choice facing working people today as in the 1970s is whether to acquiese or try to defend their living standards. We don’t know what will happen if the financial crisis isn’t resolved soon. But one thing is certain: there will be plenty of dicontent whatever the season.

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