Wednesday, 27 June 2012

Crime Pays!

We live in fictitious times where Thatcher and Reagan are a lot like Gods for the present-day conservatives of Britain and America. It was demonstrated well when Reagan gave up the ghost in 2004 and we could see that the Republicans had succeeded in their efforts to elevate Ronald Reagan to almost deified heights. Of course, the death was just what George Bush needed to take the heat off the administration as the horrors of Abu Ghraib shook the world. The Reagan administration had some great tacticians, who had the sense to wage war on Grenada just as the US Marine Barracks in Beirut had been bombed. But the timing of Reagan's demise was a masterstroke that not even the Reaganite tacticians could have pulled off. It came at just the right moment. As if the funeral had not demonstrated just how far the deification had gone - how deeply the termites had feasted - Obama marked the 100th year since Reagan's birth with the words "President Reagan helped as much as any President to restore a sense of optimism in our country."

Perhaps it was the moment when Reagan added Nelson Mandela to the terrorist list (where he would remain until 2008) that restored so much optimism in America. The South African government only murdered 1.5 million people in their African neighbour-states. No wonder the Hoover Institution noted that Ronald Reagan is revered as a colossus whose "spirit seems to stride the country, watching us like a warm and friendly ghost." It can barely be muttered today that Reagan was perched as ornament to a criminal government. You might be called a conspiracy theorist for recalling that they gave the CIA permission to deal in guns and drugs in the funding of terrorist groups in Latin America. And if not then you will be called an extremist for recognising Reaganomics for what it was - a monumental disaster. For the reactionaries on both sides of the pond the post-war period was the real disaster, with its steady rates of growth, development and productivity. The crises of the 1960s and 70s opened up a space for the life to be snuffed out of this model.

The post-Thatcher period in which we are currently held captive holds that the time before the Iron Lady was a time of stagnant mediocrity. There were plenty of problems in Britain that had been a product of the post-war settlement. But we can't seem to see the mediocrity of what we're currently living in. The average growth rate of the 1980s was 2.4% which is what it was in the 1970s and even less than it was in the 60s. Supposedly Thatcherism rejuvenated sickly Britain and restored Greatness to its shores. Even though the same pathetic worries lingered around such topics as European integration, immigration, anti-social behaviour and crime alike. The English mind was still obsessed with the decline of status it had endured since the Empire fell. And in many ways, we the British are still in the fits that inevitably come with a disordered understanding of the past. It was actually decades of steady growth and significant development which were brought to a close in the 1980s. The golden age of capitalism was no more.

We now endure the society that the Thatcherites have laid waste to and the people who have done so well out of the devastation now tell us that the real problem are the immigrants and the dole queue. The old aim of full employment was dumped and the government effectively acted to increase unemployment in order to smash the trade unions and pacify the working-class. Before there had been a time when we were close to full employment and the wealthy paid a rate of tax which was relatively progressive. Incomes for workers had tended to rise alongside productivity which was partly driven by a strong labour movement. The bedrock of institutional power for the working-class could be found in a variety of industrial sectors and the extraction of natural resources. The Thatcherites embarked upon a savage deflation which destroyed a fifth of the industrial base in two years and oversaw a 30% decline in employment in manufacturing. The unions were blown away one by one, most famously with the mines shut because it was cheaper to import.

Since the Thatcher government smashed the unions the workers' share of national income has either stagnated or declined. With the defeats of trade unions in the 1980s the right-wing mutation of the Labour Party easily picked up pace. The socialist codger Michael Foot was soon replaced with the Welsh windbag Neil Kinnock, under whom the Labour Party served as an incompetent and hopelessly complicit opposition to Thatcherism. There was no serious opposition to take over the government, just as there wasn't in the Blair years and today under the Coalition. And yet these governments have each played the populist game, the Thatcherite mantra was "power to the people" as British Telecom was sold-off for £3.7 billion. In that decade the government transferred £14 billion from the tax-payer to the investors and paid banks £3 billion to handle these transactions. The programme consisted of giving away state assets to private companies at a reduced price to ensure maximum profits and to safeguard the interests of the private sector.

The Tories handed over a lot of public money to banks from 1992 onwards as part of the Public-Private Partnership, which sold-off public aid and gave greater power to bankers. As Michael Hudson wrote "The financial giveaway had the effect of increasing prices for basic infrastructure services by building in heavy financial fees – guaranteed for the banks, who lent the money that banks and property owners used to pay in taxes in more progressive times." The theory goes that the banks will create jobs as they invest the funds in British infrastructure, specifically public transport, but it was really a way for real estate speculators to get even richer. The extension of the Jubilee Line to Canary Wharf cost £3.5 billion as it raised property values along the route by £13 billion. The public investment in transport could pay for itself simply with a tax on the higher rent-of-location and the site value. But the government would rather the banks rake in the cash.

As Noam Chomsky has pointed out when politicians prefer to talk about 'jobs' than even utter the filthy word 'profits'. The allies of the super-rich then moved to sell-off British Rail and saw to it that the railways carry an over-flowing gravy train for the wealthy. It is standard practice in a privatisation for the state to make sure the buyers are well served with comfy pillows stuffed with the taxes of working-class people. Last year Richard Branson gobbled up £18 million of tax-payer's money as the system underwent a multi-billion state upgrade. The privatisation opened up a space for private ownership safeguarded by public investment and, even as standards of service have slipped, there has been no attempt to re-nationalise the railways. The government contributes £4.6 billion to the railways as the private sector pays just £459 million into the set-up, most of which goes towards stock rather than anything in the real world.

Looking back on it all, its clear that it was just the beginning. We shouldn't forget the real content of such policies when David Cameron talks the same way about hospitals and schools. The same goes for the talk of selling off the woods and the exposed plans to sell bits of the police even. The first decision of New Labour was to abandon the last lever of the state to the markets, the Bank of England became 'independent' of the government. It was clear that there would be no dramatic shift from the post-Thatcherite line that has been safely established to stand its ground. The pillaging and the pig-out for the rich has yet to cease, the same can be said for the pains of the poor. We may live to see the state reduced to a slither of what it once was before we see a change in paradigm. It isn't clear just how far this model can be pushed before something has to give, but it can be said that this is not the final crisis of neoliberalism.

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