Economist Mark Blyth has compared neoliberalism to the acid in the film Alien, which eats its way through everything and cannot be stopped. In the 1980s, the architects of neoliberalism naively assumed that their revolution would stop of its own accord once the trade unions were broken, and the public sector returned to private hands. But like the acid, it kept on destroying everything it came into contact with. The logic of free markets and deregulation resulted in jobs being offshored to countries with lower wages and fewer regulations. Meanwhile the voracious desire for profits at home resulted in a banking revolution which laid the groundwork for the 1990s boom and the post-2008 bust. All the while, the wider economy, where the little people lived, grew poorer and more dysfunctional with each passing day.
What used to be thought of as a “north-south divide” – the mismatch in fortunes between the nineteenth century coal-powered industrial regions of northern and western Britain and those of the oil age industrial regions of the midlands and the southeast – gradually morphed into the much smaller islands of prosperity in London and the top-tier university metropolises, surrounded by an increasingly precarious ex-industrial, rundown seaside, and smalltown rural Britain. To those in the professional-managerial class – which includes elected and paid government, media editors, academics, and cultural leaders – the rising tide of precariousness went largely unnoticed… at least until a majority voted the wrong way in the 2016 referendum. But even then, the decision to leave the technocratic/kleptocratic/lenocratic/idiocracy that is the mostly undemocratic European Union was dismissed as racism and stupidity. Few within the professional-managerial class were prepared to acknowledge that there might be real, material reasons why so many people rejected membership of an empire-building project that brought them few, if any, benefits.
Between June 2016 and December 2019, the professional-managerial class wrestled with, and failed to resolve the problem of appearing to leave the EU while retaining the various benefits their class derived from membership. They were thwarted to a large extent, by European leaders determined to take the opportunity of the referendum result to strip the various perks, rebates, and opt-outs that successive UK governments had negotiated… but also by their own inability to imagine a UK outside the EU womb that had sheltered them from their decision making for decades.
The snap general election in December 2019 seemed to resolve the problem. By promising to “get Brexit done,” Boris Johnson’s Tories scored a spectacular election victory by decimating Labour’s “red wall” – the band of seats running from northeast Wales across the midlands and the north of England, which had voted Labour seemingly forever. Like Blair in 1997, Johnson could have reinvented his party and brought about the radical departure from the dead hand of a neoliberalism that was well past its use-by date, that his new electorate desired. But like Blair after 1997, Johnson had no alternative to offer.
There are those who will argue that it is unfair to blame Johnson and the Tories for their failures. After all, they were blindsided by a pandemic, followed by a global energy crisis, followed by war in Ukraine. These though, were ultimately crises of the Tories own making. We now know that lockdowns were unnecessary, not least because only a tiny minority of us mostly well into old age were at risk. And while some of us warned that the economic cost of lockdowns would come back to haunt us – as it has done in the form of inflation, energy shocks and broken supply chains – the government chose to bow down before those who accused them of putting profit before people’s lives.
As for energy, it was the government’s choice to bring forward the target dates for a net zero programme which defies the laws of physics, and which depends upon technologies which haven’t been invented yet. Essential (now that the coal power stations have been demolished) nuclear power plants which were meant to start operating five years ago remain in an early stage of construction, and may never be completed… thank goodness we have cheap gas from Russia. Well, we did, until our economically-illiterate professional-managerial class decided to involve itself in yet another conflict where we had no reason to be, by sanctioning energy, mineral, and agricultural resources which we depended upon – thereby adding to a cost of living crisis which is now affecting all but the extremely rich.
So much for the high-level stuff. For most ordinary people, it is the failure of everything that not that long ago could be taken for granted, which is resulting in growing anger. Our rivers and coastal waters are filling up with raw sewage, even as water companies which have failed to develop the necessary infrastructure charge higher prices to fund the dividends given to their directors. Crime is out of control because our prisons are full, and our court system has collapsed – the only courts still functioning are those where rich business types sue each other at the public’s expense. The once-cherished NHS is cracking at the seems as decades of underinvestment come home to roost in the shape of collapsing buildings and workforce shortages. Getting to see an NHS dentist these days is about as likely as winning the lottery, and in many regions seeing a doctor before the grim reaper arrives is also getting harder. Public transport has all but disappeared in many rural regions, and where it still exists it is overcrowded and seldom on time. This forces those who have to commute to work to risk vehicle damage (and worse) dodging the craters that have opened up on most British roads. And let us not forget the massive hike in the number of people receiving emergency food parcels from Britain’s burgeoning network of foodbanks – one of the few things actually growing in the economy – up from just 25,899 in 2008/09 to 2,986,203 in 2022/23… just one indicator that the UK social security system is also broken. None of these happened by accident, but are the direct result of Tory austerity cuts imposed after they returned to government in 2010.
With an election just weeks away, Tory apologists also claim that a Labour government will be worse… which amounts to the failed “project fear” approach which has been losing votes on both sides of the Atlantic since 2016. It is, of course, true that a Labour government which is also steeped in neoliberal ideology will be unable to resolve the growing crises overwhelming the UK. But that is a matter for another day. The first stage in the coming revolution is to grasp the opportunity before us and vote the Tories into third place (the latest polling has the Tories with just 14 more seats than the LibDems). This matters because the second largest party in Parliament becomes the official opposition and enjoys a series of privileges both in parliamentary processes (such as opposition day debates and placing MPs on scrutiny committees) and in additional money.
It is only the tantalising prospect of a complete Tory meltdown – equivalent to what happened to the Liberal Party a century ago – which provides any excitement to an otherwise depressingly dull election campaign in which professional politicians mouth words which nobody believes anymore. And the reason for this goes back to neoliberalism having no end point… it just keeps on undermining and destroying everything it comes into contact with – including the political parties themselves. The Labour Party (the clue is in the name) was born out of the organised working class of a bygone era… a working class which evaporated as neoliberal corporations relocated the industry to Asia. The Labour Party offers nothing but sneering insults to the modern precariat which filled the space in the class structure that the industrial working class once held. And so, neoliberalism has left the Labour Party appealing to a fragile (as can be seen with the agonising over Palestine) patchwork of progressive single-issue groups embraced largely by metropolitan liberals along with the “thwarted bourgeois army” of university graduates who didn’t get the good jobs with the high incomes.
Neoliberalism did for the Tories too. Where the Tories used to be the representatives of British capitalism, neoliberalism turned them into subjects of a global corporatism that cares not one jot about the fortunes of the economy and people of the UK. And so, the old guiding hand of capitalists with a long-term vision for the British economy – the fabled “men in grey suits” – have gone off to their private nursing homes, leaving the Tories in the none too tender hands of hedge fund managers and corporate fraudsters, concerned solely with turning a quick buck and leaving someone else to repair the damage… There is neither a plan nor guiding ideology, no credible narratives about free market liberalism and the benefits of a small state. All that remains are the favoured minority – mostly friends of sitting Tory MPs – with their snouts in the public spending trough, even as those things the public wants – indeed, needs – are denied on the spurious ground that, as Tories are so fond of saying: “there is no magic money tree.”
It has been increasingly obvious since the 1980s that the UK is leading the charge of western economies in, as John Michael Greer put it, collapsing first to avoid the rush. There are though, a shrinking minority who still – by some demented logic – imagine that the Tories might somehow achieve in the next six months what they have failed to do in the past 14 years (or that they and their wannabe emulators have failed to do in the past four decades). A somewhat bigger minority apparently imagines that merely changing the seating arrangements in Versailles-on-Thames might somehow turn things around. But increasing numbers – particularly among the younger generations – are coming to understand that the entire system is rotten:
About once in a human lifespan, we have undergone consensus revolutions. During and immediately after the Second World War, for example, there was a growing shift away from the old system which was widely held to have been responsible for the depression of the 1930s, the political extremism which that gave rise to, and ultimately to the deaths of more than 80 million people in the war that followed. In the aftermath, a new consensus based around a managerial-technocratic “mixed economy” sought to overcome the economic and political extremes of the pre-war years… and it appeared to work – for two decades 1953 to 1973, the western economies grew at a pace never experienced before (and never to be seen again).
And then it all went sour. In August 1971, Nixon pulled the rug out from the post-war Bretton Woods monetary system, creating a wave of inflation across European economies whose currencies were suddenly devalued. To make matters worse, the OPEC states chose this moment of western weakness to raise oil prices to a level designed to allow their economies to prosper. Suddenly, governments across the west discovered that things which used to work – like deficit spending on infrastructure – only served to make the inflation worse. And inevitably, faced with years of declining living standards, first organised and later non-organised Labour took to the picket lines.
In the UK at the beginning of the decade, prime minister Edward Heath had attempted, and failed, to implement a package of neoliberal reforms. Although his government is remembered for the two miners’ strikes, the ensuing power cuts, and the three-day-week designed to save energy, Heath was defeated as much by the supporters of the mixed economy on his own side. In 1970, there were too few politicians opposed to the existing consensus to bring about radical change. Nevertheless, the consensus broke from both sides. On the “right,” free market liberals within the Tory and Labour Parties began to embrace the precursor policies to neoliberalism, while on the “left,” socialists like Tony Benn argued that the crisis stemmed from the balance within the mixed economy not being sufficiently skewed to public ownership and control. (followers of my writing will understand that neither view was correct, since the true cause of the crisis was the remorseless increase in the energy cost of energy).
Contrary to the popular narrative, Margaret Thatcher was not the first prime minister to implement neoliberal policies. That honour goes to Labour’s James Callaghan, who used an unnecessary loan from the International Monetary Fund (half of which was still unspent in 1979) to force his own party to abandon the post-war consensus. Thatcher did though, become the beneficiary of the foundations laid by Callaghan… and more importantly, reaped the North Sea oil which began flowing – and providing tax receipts – to underwrite her wanton destruction of the UK’s economic base.
Asked at a dinner in 2002 what her greatest achievement was, Thatcher replied straight away “Tony Blair and New Labour – we made our opponents change their minds.” That was the neoliberal consensus at its height… the combination of social and economic liberalism rammed down the throats of the public by an increasingly authoritarian state. And so long as the oil revenues kept flowing in, so the banks could keep creating currency, and the population could be lulled to sleep by GDP growth that apparently had no material basis.
Oil revenues briefly ceased in the UK following the 1988 Piper Alpha disaster – whose impact on the economy laid the seeds for the Black Wednesday crisis in 1992, which paved the way for New Labour. And the return of the oil revenues underwrote the debt-based boom which made the Blair years a period of relative economic and political calm. But even during Blair’s first term, the UK’s North Sea oil and gas fields peaked and entered an irreversible decline. By 2005, the UK had become a net importer of oil and gas, reliant on the vagaries of the global oil markets, and leaving it ill-prepared for the oil price spike/interest rate rise/financial crash that reached a crescendo in 2008.
And so, for close to two decades, we have experienced a growing schism between the neoliberal ideology of the supranational, pro-corporate professional-managerial class, and the declining prosperity experienced by the majority of ordinary workers within the various national economies of the west. Nevertheless, the neoliberal consensus has managed to cling on by selling the promise that the good times are surely just around the corner… but it is becoming more threadbare with each passing day.
Opportunist politicians – mostly on the “populist right” – have seen the benefit of standing on a socially conservative platform. But this only addressed half of the neoliberal problem… arguably the less important half. In poll after poll across the western states, the majority of people have favoured politicians who “lean right” on social issues and “lean left” on the economy. This is particularly true in the UK when it comes to utilities and critical infrastructure which failed to deliver the neoliberal promise that they would be better in private hands than in the public sector. Although even here, given both the mismanagement by state actors and the ease with which these bodies were privatised in the 1980s, it is unlikely that anyone is going to embrace direct state ownership this time around.
Currently, the establishment parties – Tory, Labour, and LibDem – are too wedded to the neoliberal consensus to allow a break. Indeed, under Boris Johnson, the Tories leaned even further “left” on social issues, while under his demented – and fortunately brief – successor, they leaned even further “right” on the economy. Meanwhile, Labour’s Keith Starmer seems quite comfortable to spend the next five years attempting (and almost certainly failing) to maintain the neoliberal status quo.
There are though, two unstoppable forces which make a revolution certain. The first is the death of the so-called “baby boomers” (although there is a certain insanity to believing that the life experience of someone born in 1946 is the same as someone born in 1965 – the former coming of age at the height of the post war boom, the latter reaching adulthood just in time to join Thatcher’s unemployment queue). The post-war offspring of affluent middle-class and upper-class families were, without question, the winners of the oil age. And for decades since, enough of them have been around at election time to guarantee an uninterrupted string of neoliberal Tory and Tory-lite governments who, in return, enabled their pensions and property income even at the cost of mass homelessness for the young. But as that demographic takes to its nursing homes to drool one last helping of cabbage down its shirt, a younger – and very different – generation is coming to the fore. And the revolution this younger generation brings with it will be very different to the one imagined by left-wing boomers.
There may certainly be a swing back to more state ownership and control of utilities and critical infrastructure, since any claim that these have performed better in private hands has been tested to destruction. But there is also growing discontent with bloated and lenocratic state bureaucracies which add to the various crises which have a disproportionately negative impact on younger people, so that deregulation in many areas may also be on the agenda. Although this, perhaps, points to a major flaw in current anti-establishment thinking… that the crises are not real.
We see this in the growing numbers who view climate change as a complete scam… and no doubt there are a lot of corporate scammers and lenocratic middlemen making a lot of money out of ineffective non-remedies like renewable energy, electric cars, and carbon credits (in the same way as their Big Pharma counterparts made a fortune out of pandemic fearmongering). There are though, many other crises arising out of an overpopulated system which is consuming more of the planet than the planet can provide (at least at current energy and technology levels). Seen as mere scams, it is easy to imagine that once the dead hand of the current elite is swept away, Britain can begin fracking its vast gas reserves and get back to drilling in the North Sea.
This, though, brings us to the second unstoppable force facing us… energy decline. This is not easily understood because global energy consumption has continued to increase. The key issue though, is not with the quantity of energy available to us, but its energy cost. Put simply, to obtain energy that we can convert for useful work, requires that we spend a portion of that energy in the process. But because humanity has burned its way through the energy-dense fossil fuels from the lowest to the highest energy cost deposits, the energy cost of energy has been rising remorselessly… bringing us ever closer to a net energy cliff:
Those shale deposits – assuming they still have gas within them – along with the smaller and more difficult remaining offshore oil deposits (which are mostly in the much harsher North Atlantic rather than the relatively sheltered North Sea) are too energy expensive to ever provide the much bigger non-energy UK economy with the energy it needs. And so, a shrinking economy is inevitable – only the timing remains to be settled.
Economic decline may be offset and delayed to a small extent by the deployment of non-renewable renewable energy-harvesting technologies in favourable locations, along with conventional nuclear power plants. However, these cannot provide the energy-density needed to stop an energetic collapse once the fossil fuels go away… a process which began, by the way, with the peak of conventional – i.e., cheap and abundant – oil deposits in 2005 (something which led directly to the 2008 economic crash). Which partially explains why the median wage has fallen in the years since the crash, and also why people further up the income ladder have been feeling the pinch in recent years.
Of course – and this is why a revolution is inevitable – the other reason why those at the bottom have been impoverished is because of the decisions made by neoliberal governments and neoliberal institutions whose actions have favoured those with private wealth over those who must sell their time in exchange for a wage. Much of that “wealth” (which is only really a claim on real wealth) will soon be going away through a massive default crisis (in which the value of shares and bonds goes to zero) and/or through a prolonged inflation (that would inevitably follow any largescale attempt to use new currency to try to obtain energy and resources which don’t exist) which dramatically reduces the real value of assets, even if it maintains their nominal value (as in Germany in 1924, we can all be millionaires, but only when a loaf of bread costs £100,000).
The point is that, given the coming economic shrinkage and the collapse of prosperity across the western states (with the UK leading the charge) arguments over nationalisation v privatisation will be rendered impossible by the collapse of multinational and large national enterprise and governance. Most likely, the revolution will involve a process of delocalisation in which only that which can be done locally will get done at all… which includes the localisation of government itself.The last working-class hero in England.
Clio the cat, ? July 1997 - 1 May 2016 Kira the cat, ? ? 2010 - 3 August 2018 Jasper the Ruffian cat ? ? ? - 4 November 2021
Excellent article albeit a mix of depressing realism and guarded optimism. I liked "Versailles on Thames" The summary of where England is in the first few paragraphs is a superb description of what a shit state we're in.
Mark Blyth, referenced at the start, still has one of the best quotes ever re: the super wealthy: "the Hamptons are not a defensible position. The Hamptons are on a low-lying beach. Eventually the people will come for you" although it sounds better in his Scottish accent....no amount of cajolery, and no attempts at ethical or social seduction, can eradicate from my heart a deep burning hatred for the Tory Party...So far as I am concerned they are lower than vermin.
on June 13, 2024, 1:52 am
The summary of where England is in the first few paragraphs is a superb description of what a shit state we're in.