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Failure of Labour Politics in Britain, 1964-79

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Failure of Labour Politics in Britain, 1964-79 In Place of Liberation - Failure of Labour Politics in Britain, 1964-79 Shannon Ikebe 2011 Politics Honors Thesis Contents Introduction: Keynes’ Children in the 1970s - 3 Chapter 1: Post-Fordism That Never Was - 7 Chapter 2: Ideas and Political Economy - 25 Chapter 3: Welfare State and the Social Wage - 46 Chapter 4: Trade Unions and the Social Contract - 96 Conclusion: How Did the Lights Go Out? - 141 2 Introduction: Keynes’ Children in the 1970s “Objective conditions have never made socialism seem so necessary and so achievable. Capitalism’s self-justification as the natural means of meeting human needs and expanding human possibilities seems more obviously groundless than ever, with every structure of the economy out of joint with human needs… moreover, the means – or at least the groundwork – for achieving such a society, the organizations created by working people themselves, have grown… as the crisis has deepened.” – Hilary Wainwright, Beyond the Fragments (1979) In the midst of the Great Depression, John Maynard Keynes wrote a pithy tract envisioning an optimistic future in which the “economic problem” no longer exists.1 In Economic Possibilies for Our Grandchildren, he posited in 1930 that the generation of his grandchildren would be freed from the struggle for subsistence, because of the tremendous growth in productivity; the opportunity to transcend economic insecurity would be a world-historical moment, in which humanity overcomes what “always has been hitherto the primary, most pressing problem of the human race” and faces a delightful prospect of emancipation from economic imperatives.2 In the past centuries or even millenia, freedom from alienating labor was the privilege for the few, directly dependent upon exploitation of the mass of workers; because of technological transformations, Keynes posited, the realm of freedom could soon be universally accessible. We are the Keynes’ grandchildren. Keynes’ predictions of economic possibilities, that of dramatic economic growth and increase in productivity, came true; however, we are nowhere near the realm of freedom that he argued would accompany the growth. In fact, the vista of liberation from economic necessities has been receding from us for the past three decades, characterized by persistent, structural unemployment and the rise in 1 John Maynard Keynes, “Economic Possibilities of Our Grandchildren,” in Essays in Persuation, New York and London: W.W. Norton, 1963. 358-373. 366. 2 Ibid. 3 precarious employment, expanding economic inequality and poverty, increased reliance on debt, and contraction of the social services. The ongoing global economic crisis following the collapse of neoliberalism is threatening to further erode social welfare in the name of unavoidable austerity, and it is almost impossible to imagine that “the economic problem may be… at least within sight of solution, within a hundred years” of his writing (which is, by 2030).3 To understand why the astounding growth in output and productivity in the latter half of the 20th century did not lead to the corresponding expansion of freedom is one of the most fundamental political, economic, sociological and historical questions that we must understand in the contemporary Western world. The primary key to the puzzle lies in the 1970s.4 The 1970s was the turning point in postwar history. Until the 1970s, the workers’ class power, the welfare state and social mobility expanded dramatically, full employment and unions’ power reinforced each other, and society was becoming less plagued with inequality and insecurity. The basic economic security spawned a widespread movement for social freedom from hierarchy and especially gendered oppressions, as well as from excesses of industrial pollution and militarization, since the 1960s. The 1970s was also a time of economic crisis and a contestation over a basic paradigm of political economy, as the postwar Fordist- Keynesian consensus was called into question. It was the political struggles fought among the Keynes’ children - both in a generational and ideational sense – that gave neoliberal (counter-)revolutions to his grandchildren. Neoliberalism began in the 1980s, 3 Ibid. 4 This thesis focuses most intensively on the period of the Labour government between 1974 and 1979, since the most consequential events happened in these years. However, 1970s is meant to cover the “long seventies,” the entire period of the contestation of the Fordist-Keynesianism in economic, social and political sense - starting with the beginning of the first Wilson government in 1964, ending either with Thatcher’s victory in May 1979, defeat of the left-led Labour in 1983, or most conclusively, the defeat of the Great Miners’ Strike in 1985. 4 but we must trace it to the political struggles of the 1970s which spawned it in the end. There have been substantial differences between countries in regards to the ways and the extent to which neoliberalism spread, but the general trend has been consistent on both sides of the North Atlantic. The 1970s was a moment in which the noblest experiment in capitalist history – if not human history – of a society free from economic bondage came closest, and withered away. This thesis focuses on the politics of the seventies in the United Kingdom, because of the particular acuteness of the stagflationary crisis and the degree of its paradigmatic shift from the Keynesian welfare state to the Thatcherite laboratory. Extremity of Thatcherism is especially illuminated in contrast with the strength of the organized labor and the Left in the ‘70s. Labour Party was in government for ten out of fifteen years preceding Thatcher, and their failure to construct a durable regime of political economy in place of the declining Fordism was necessary for neoliberalism to emerge. Political scientist Peter Hall characterized the British trajectory an instance of “third order change”, a paradigm shift of rare occurrence.5 The decline of Keynesian- Labourism and the rise of Thatcherism in Britain are close to an ideal-typical example of the global shift from Fordism to neoliberalism, and its historical significance cannot be overstated. While neoliberalism came to many other countries in a much less drastic and ideologically-charged manner, the British case best highlights the dynamic of a regime shift. To understand the path taken by the Labour Party and the unions, this thesis focuses on the ideas held by them; in particular, productivism and masculinism. The role 5 Peter Hall, “Policy Paradigms, Learning, and the State: the Case of Economic Policymaking in Britain,” Comparative Politics 25:3, Apr 1993. 275-296. 279. 5 of ideas often tends to be under-emphasized in political science research, but it is an integral aspect in understanding of political change, continuity and agency. The Labour Party’s reformist, anti-radical tendency is well known, but their attachment to productivism - the notion that privileges perpetual increase in economic growth and capacity for consumption - and the male breadwinner family wage model also locked them in a box which rendered it unable for them to envision alternative regimes and aims of political economy. The outline of the thesis is as follows. In the first chapter, I explore the possibility of an emancipatory economy, inspired by the visions of Andre Gorz. The idea of an alternative serves as a contrast with the actual trajectory of labor politics and political economy throughout the thesis. The following chapter situates the thesis on a firm theoretical basis by examining institutionalism in political science and the role of ideas in institutionalism; the analysis is conducted through the lens of the dialectical interaction between ideas and institutions and the concept of ideational path dependence. The third chapter examines the development of Labour governments’ social policy and the social wage, and the following chapter focuses on industrial relations and the Social Contract between unions and the Labour government. The third and fourth chapters provide empirical material based on the experience of labor politics in the ‘70s Britain. I conclude the thesis with an observation of the implications of its failure. 6 Chapter 1: Post-Fordism That Never Was “We do not want to enter the age of abundance, only to find that we have lost the values which might teach us how to enjoy it.” - Anthony Crosland, the Future of Socialism (1956) “Another World is Possible” is a slogan of the World Social Forum, a network of the alter-globalization movement in the early 21st century. The slogan was coined as a response to the most emblematic credo of the neoliberal hegemony, the Thatcherite refrain of “There Is No Alternative.” The assertion of neoliberalism as destiny has been the most effective way to discursively supress the opposition to the new order that emerged at the end of the 1970s. Therefore, it is imperative to envision a potential non- neoliberal development of political economy. What would an economic system for “Keynes’ grandchildren” look like? In this chapter, I describe the blueprint of an emancipatory arrangement which could have been built since the ‘70s, had it not been for political obstacles. The Crisis of Fordism The transition of a dominant mode of production throughout the Western advanced capitalist world from Fordism to neoliberalism is one of the most significant events in the history of capitalism. The Fordist regime of political-economic regulation, as a combination of labor control practices, constellations of
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