Austerity economics – how it failed 35 years ago


Since winning the 1979 General Election, the Conservatives had embarked on an economic policy described as ‘monetarism’   This entailed rigorous control of the money supply in order to curb the great British disease of inflation.  The outgoing Labour Chancellor of the Exchequer Denis Healey, no stranger to cutting government spending himself, had dubbed the new creed as ‘sado-monetarism’.

9780436164859-uk-300The high priest of monetarism was a professor at the Chicago school of economics by the name of Milton Friedman.  Without going too far in to the vast detail that any debate on economics can become mired in, Friedman essentially threw out the conventional Keynesian wisdom that in a depression, governments should spend to keep people in work.

Out of control public spending, he argued, would lead to something called ‘stagflation’ – stagnation with high inflation – which was a prevalent condition of many economies in the 1970s.  The answer was a kind of shock therapy where high interest rates, as one weapon, would make it unattractive to spend money.  This would then lead to restraint in wages and prices, which would result in inflation coming down.

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JK Galbraith

Oh that life was so simple, Keynesians retorted angrily – in many newspaper columns and on the letters pages.  Friedman’s leading Keynesian nemesis on the global stage was the elderly but highly alert J K Galbraith, who had served in President Franklin Roosevelt’s administration steering through the New Deal.  He warned over and over again that Friedman’s medicine would lead to idle industrial plants and high unemployment.

Just because it hurt, Galbraith thundered, didn’t mean monetarism was actually doing any good to Britain.

“Suffering must have a purpose: out of much suffering there must come much good.  No one is quite sure how this works in economics; one only knows that the bad times are somehow the price of the good.  Pain and punishment are considered especially salutary for other people.”

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General Pinochet – enthusiastic supporter of austerity economics

So agonising were the effects of monetarism that many on the left pointed out that in its most undiluted form, it had only successfully been applied in Chile – which still languished under a military dictatorship.  The implication being that a democracy could not hold the lid down on a population tormented by the rigours of this doctrine.

Within the trade unions, the widespread suspicion was that the Conservatives were using high levels of unemployment deliberately to beat down pay demands.   With an instinctive hatred of state regulation of the economy, Thatcher didn’t want to get involved in imposing incomes policies (as Labour had tried to do in the 1970s) but fear of the dole, it was thought, was her preferred weapon against wage inflation.

In reality, the Conservatives quietly dropped monetarism and adopted a more pragmatic and less doctrinaire approach after 1982.  But not before they would experience a bitter lesson from Britain’s hugely pissed off youth on how far you can pursue an experiment before the subject bites back.

Shocking attitudes to race in the early 80s


If I want to shock the millennials I work with, I tell them of a grim time not so long ago when racism was not only casual but endemic. Worse, it tipped from the mouths of MPs, broadcasters, senior police officers and judges. I find it almost impossible to believe that when I was in my teens, people could utter some of what follows here…

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Powell – putting his own views in other people’s mouths

Enoch Powell MP was a posh demagogue much loved by the sort of people who would begin a sentence with “I’m not racialist but…” Powell always put his racist views into other people’s mouths. As if to say – I don’t necessarily believe this myself but I’m honour bound as a representative of my constituents to tell you that…etc.

That allowed him to posture as the unwilling messenger who had to relay to all of us the shocking truth about the perils of immigration. He once claimed that an elderly, frail white woman had “excreta pushed through her letter box”.  A woman like her was intended to embody all white people – vulnerable and overwhelmed by the aggressive and sexualised violence of people from the black Commonwealth.

It was all nods and knowing winks from Powell to the racists on the street. That’s not to say that a little old lady didn’t have poo put through her letter box.  But it sure as hell happened to a lot more Asian run newsagents at the hands of neo-fascists – a fact that conveniently escaped Powell.

Winston Churchill’s grandson was a prominent MP in the 1970s – same name as his granddad but less illustrious career. In 1976, he made a very Powell-esque speech himself. He imagined his constituents not being able to recognise their own neighbourhoods anymore.

We can not fail to recognise the deep bitterness that exists among ordinary people who one day were living in Lancashire and woke up the next day in New Delhi Calcutta or Kingston, Jamaica.”

Churchill, incidentally, once described one of his constituents to the House of Commons as being “as black as your coat, Mister Deputy Speaker”.

Sir Kenneth Newman of the Metropolitan Police had some positives in his career such as backing the formation of Crimestoppers. But he also opined that Jamaicans were incapable of obeying the law: “It’s simply in their make up, they’re constitutionally disposed to be anti-authority”.  Another commentator even said that mugging was a form of self-employment for “West Indians”.  Crime reporting in those days was often underpinned by the assumption that black people were more disposed to criminality.

Another knighted copper called Ken was Sir Kenneth Oxford running the force in Merseyside. BBC reporter Martin Young spent some time with the Liverpool police and wrote a report for The Listener magazine. Jaws dropped round Merseyside when he claimed there was a view that “half-castes in Liverpool today” were the “products of liaisons between black seamen and white prostitutes in Liverpool 8 – the red light district”. Oxford bitterly denied that any senior police officer had said such a thing to the reporter – who in turn stood by his story.

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Alfred Sherman

Right-wing ideologues often conflated the perceived threat posed by immigrants – from the Indian sub-continent and Caribbean mainly – with the permissive society unleashed by the 1960s. Alfred Sherman was a political guru to Margaret Thatcher and once declared that:

“…the imposition of mass immigration from backward alien cultures is just one symptom of this self-destructive urge reflected in the assault on patriotism, the family – both as a conjugal and economic unit – the Christian religion in public life and schools, traditional morality in matters of sex, honesty, public display and respect for the law – in short, all that is English and wholesome…”

How did black Britons view this kind of thing? In the late 70s and early 80s, change was slowly happening. A new generation born and bred in Britain wasn’t prepared to doff its cap to the former colonial master. And they wanted to succeed in British society.

However, there was still very widespread discrimination in employment and housing. I found a copy of a teen mag called Fab208 – mentioned elsewhere on this blog – where a black single mother was interviewed about what Christmas would be like for her. Mrs Jones, who lived in a dingy flat in Wapping with her kids replied:  “I don’t know how I’ve avoided committing suicide.”

There was so little room in the flat that clothes were hung up outside to dry but were then stolen. The family never went on holidays. Her 14 year old daughter Sharon told Fab208:  “At school I hear them talking about the places they’ve been to and I feel like the odd one out.”

Mrs Jones pointed out she had never been on social security and worked to keep her family.  “I’m not a sponger.  I wouldn’t like the idea of someone else supporting my children.” 

Shame Enoch Powell never dropped by to hear her account of life in Britain during the 70s and 80s.

What did new technology look like in 1983?


These are adverts and one competition feature from SHE magazine in December 1983 – discovered in my 80s archives. A good spread of new technology from that year. A computer inside your washing machine, a Sunday roast done in your microwave and the latest in hi-tec cameras. The camera advertised below is a Minolta. That company’s cameras were taken into space with the Apollo missions and the company partnered with Leica on its lenses. It was later merged with Konica then swallowed up by Sony.

The gap-toothed man pointing at the microwave is “comedian” Jimmy Tarbuck – not a favourite of mine hence the speech marks – and the legendary Diana Dors is the heavily airbrushed lady. She died in 1984. Once a British screen diva, she had a starring role in the Adam and the Ants video for Prince Charming.

Anti-Thatcher humour – “frugal fun for the unemployed”


It’s impossible to imagine now how endemic youth unemployment was between 1979 and 1983. In the Toxteth area of Liverpool, about 90% of the youth had no work. One survey in London estimated that 26% of young unemployed had contemplated suicide. Still, it spawned a rather dark sense of humour…

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Larks in the Park – pop in Liverpool’s big green space


Through the early 80s, Liverpool’s Sefton Park used to reverberate to the sound of some of the top bands from the north west. Hard to remember now but Liverpool ruled the pop waves at the time with combos like Teardrop Explodes, The Mighty Wah!, Echo and the Bunnymen, China Crisis, Flock of Seagulls, Frankie Goes to Hollywood, etc. They didn’t play this festival – think I’m right in saying. But some like Frankie did.

Here’s the festival mag for the 1985 event. It includes ads from some great nightspots of the time in Liverpool like Keith’s wine bar (we used to think that place was very posh), Jody’s (gay upstairs and futurist downstairs) and the Armadillo (a trendy eatery opposite Probe records).

 

Newspapers for and by the jobless in the early 1980s


After 1979, there was a calamitous rise in unemployment – especially among the youth. In northern cities like Liverpool, Manchester and Newcastle – a kind of dole culture took hold. You could be forgiven for thinking that not having a job was the norm while being in work was some kind of privilege. Local authorities and trade unions funded unemployment centres. I recall the centre in Liverpool on Hardman Street with a pub attached at the back called The Flying Picket where you might bump into Alexei Sayle at the bar on some nights.

Some of these centres produced cheap newspapers for and by the unemployed. They would normally reflect the opinions of the dominant political group within the centre – often on the ultra-left. Here are some examples – note the attack on the TUC for not doing enough for the unemployed. A common theme at the time was that the Labour Party and trade union leadership were sadly wanting in the face of the Thatcherite onslaught.