Here’s the thing about Thatcher – when the right wing papers crow that ‘she saved Britain’s economy’, they are not completely wrong. The crisis of capitalism of the 1970s was a real crisis: the Fordist-Keynesian model of production, of the mass factory worker and full employment, had reached the point of systemic failure by the late 1960s. Technical innovation in production had increased rates of surplus value, with more goods being produced for less – but cheaper production costs means cheaper prices, and less profit on each sale. In addition, the increase in surplus production required more and more demand in the market in order to mop it up.
The post-war consensus of full employment and a welfare state was in some respects a means of ensuring that demand kept up with levels of production. This put the labour unions in a strong position with respect to wage demands: the mass factory worker model leant itself to collective bargaining, while the system as a whole relied on the continued purchasing power of workers. By the 1970s, labour was in a dominant position over capital: the combination of falling rates of profit on goods, market saturation and high wage demands started to seriously eat into the overall rate of profit, and ramp up levels of inflation. As David Harvey writes in ‘The Condition of Post-Modernity’, ‘the period from 1965 to 1973 was one in which the inability of Fordism and Keynesianism to contain the inherent contradictions of capitalism became more and more apparent.’
The solution to this problem was to change the way that capitalism worked – to move from a Fordist model to a post-Fordist model, which Harvey terms ‘flexible accumulation’. If the profits within Fordist manufacturing were taking a hit, then the model had to change. Changes in communication technology and transportation (what Harvey calls ‘time-space compression’, or perhaps more commonly, globalisation) meant that production could now be outsourced to countries with weak or negligent union presence, to reduce the costs of wages. This in turn started to weaken the position of trade unions in Britain, as capitalists could now threaten to outsource their manufacturing base unless workers agreed to reduced terms. The unions were now ripe for the capitalist picking: the miners’ strike was only the most prominent example of the strategic attack on organised labour that followed.
But reduced wages means reduced demand. Thatcher squared that circle by shifting the focus of the economy from manufacturing to services: in a sense from production to rent (and debt). Privatisation of utilities, sold at rock bottom prices (thanks to subsidies from North Sea oil) in order to encourage profits, enabled private companies to skim off surplus value and monopoly rents from previously communal resources. This is particularly clear when looking at the railways – the private companies in charge of each line have a monopoly over prices, as there is no alternative option if you want to travel on that line. Pumping up a housing bubble by deliberately restricting supply through the selling off of council houses and the refusal to build anymore meant that rising land values, housing equity and rents became a central source of income for many workers. This, combined with easy access to credit, compensated them for their reduced wages, and propped up demand. And the infamous Big Bang, which loosened the restrictions on the stock market, enabled banks and brokers to amass huge wealth via the buying and selling of debt, and turning the City of London into a de facto tax haven.
In capitalist terms, the Thatcherite reforms worked, at least for a while. Levels of overall growth may not have hit the Keynesian heights, but profits certainly did. The point here is that while there is no doubt that Thatcher took visceral enjoyment from the destruction she wreaked on the lives of the working class – ‘rejoice! rejoice!’ - from the position of of a capitalist class desperate to save capitalism as a mode of production, she had no choice. Indeed, as rightwing academics love pointing out, it was the preceding Callaghan Labour administration who abandoned full employment and started the monetarist policies which became Thatcher’s trademark. This is how capitalism works: its only priority is its reproduction, its continued generation of surplus value and profit. It doesn’t matter who or what gets thrown aside in the process, whether that is the working class or the entire planet itself. This is why it doesn’t matter how much the left point to rising levels of inequality under the post-Fordist/Thatcherite system, or the rampant destruction of working class communities. Under capitalism, it’s irrelevant. In this way, she was right to say ‘there is no such thing as society’ - because from the point of view of the capitalist, there isn’t.
But, of course, as has now become clear, her ‘saving of Britain’ was quite obviously only a temporary solution. The answers she provided worked in terms of salvaging the mode of production for a couple of decades, but have now failed – the crisis that she put off has returned with a vengeance. The economic model of rent, debt and finance collapsed in 2008, and is only still alive thanks to nation states taking on unprecedented levels of indebtedness. Austerity policies are a desperate attempt to recreate the Thatcherite solution to the crisis of profitability. Firstly, this is through renewed attacks on labour, but without any of the compensation: the aim is now to drive down wages and living conditions to the levels of China – and to absolute zero in the case of workfare schemes - in the hope that this will increase ‘competitiveness’. Secondly, through a new bout of privatisation, via the auctioning off of the NHS, pretty much the only thing left that Thatcher didn’t sell. And thirdly, through a further inflation of the housing market bubble: encouraging the public to take on more debt in order to to save the profits of buy-to-let landlords, and continuing to restrict supply.
In effect, in order to save capitalism and the accumulation of wealth once more, people are being forced to work for free, to pay for medical treatment, to go into more debt, and to be made homeless. Or as Marx put it, ‘accumulation of misery [is] a necessary condition, corresponding to the accumulation of wealth. Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, the torment of labour, slavery, ignorance, brutalization and moral degradation at the opposite pole, ie on the side of the class that produces its own product as capital’. The cruelty and heartlessness that Thatcher personified, and which Cameron and Osborne (and indeed Blair) echo, is therefore an existential demand of the capitalist system. If Thatcher hadn’t existed, capitalism would have had to have made her up.
So in a sense, there is more honesty in the right’s veneration of Thatcher than there is in the left’s demonisation of her – from the point of view of the capitalist class, she did what had to be done in order to save the mode of production, at least for a time. Yes, she was callous; yes, she was cruel: but so is capitalism. The attitude that Thatcher took to the working class is one that goes to the very core of the capitalist class relation. This means that when the left focus primarily on her as an individual, they are letting the system off the hook.