Historian Neil Faulkner on Thatcher, the neoliberal counter-revolution, and the battle for the future

The British ruling class is burying one of its own. Existing in a cocoon of privilege, insulated from the grim mood of alienation that pervades the lower depths of British society, the political establishment has decided to turn Thatcher’s funeral into a state pageant. The profiteers and the millionaires wish to pay homage to the class warrior who smashed the unions, destroyed manufacturing industry, privatised our public services, and screwed the poor.

They know how much they owe her. The essence of Thatcherism can be captured in two contrasting events. The Battle of Orgreave was the turning-point in the 1984-85 miners’ strike. The impact of the strike’s defeat is still with us. The haemorrhaging of union power has yet to be staunched, and, in consequence, the neoliberal tide of sell-off and cut-back unleashed by the Thatcher regime continues to roll relentlessly forwards.

The City of London’s Big Bang on 27 October 1986 was no less significant. It was the single most important act of Thatcherite deregulation, a symbol of the greed-is-good explosion of speculation and profiteering that has been the hallmark of neoliberal capitalism for a generation. With the miners crushed, with the labour movement’s defences crumbling, the Big Bang was a green light to the global rich to cash in.

Now is a time to reflect. Let us consider this two mould-breaking events in more detail. As they bury their beast, let us review some lessons.

The Battle of Orgreave

It was 7.45 on the morning of Tuesday 29 May 1984. Every picket in the South Yorkshire coalfield had been instructed to go to the Orgreave coking plant. Some 5,000 striking miners had assembled there. Much was at stake.

Orgreave supplied coke to the nearby Scunthorpe steelworks. Scunthorpe in turn supplied steel to a large swathe of the British engineering industry. Whereas the power stations had ample stocks of coal, the steelworks needed regular supplies to keep running. If the lorry convoys from the coking plants could be stopped, the steelworks could be shut down and the flow of steel to the manufacturing plants choked off. If that happened, the striking miners would be on the road to victory.

The strike had begun on 12 March, after the National Coal Board (NCB) announced the closure of Cortonwood Colliery in South Yorkshire. The announcement had been deliberate provocation by the Tory Government of Margaret Thatcher and the new hard-line management of Ian MacGregor. MacGregor was a union-buster, and Thatcher had appointed him to the NCB to break the National Union of Mineworkers (NUM).

The NUM was widely regarded as the strongest union in Britain. The miners had inflicted two signal defeats on the last Tory Government. The first, in 1972, had wrecked the government’s pay policy. The second, in 1974, had brought the government down. Then, in 1981, Thatcher herself had backed off when South Wales miners struck against pit closures and sent flying pickets to spread the action to other coalfields. The Tories, re-elected in 1979, had been not been ready. But if they were to break the power of organised labour in order to drive down wages and restore the rate of profit – and that was the aim – they were going to have to crush the NUM.

The union president, Arthur Scargill, had been elected with a 70% vote in 1981 on a promise to oppose all pit closures. ‘A fight-back against the government’s policies will inevitably take place outside rather than inside Parliament,’ he subsequently told his union conference. ‘Extra-parliamentary action will be the only course open to the working class and the labour movement.’

Pit closures

But the miners were at first unwilling to heed their leader’s call to action. Three times they voted against strike action over pit closures. Yet the threat to their industry, their jobs, and their communities was very real. The long-term government strategy was to shut down most of the coal industry in favour of oil, gas, and nuclear power, and to privatise the handful of profitable ‘super-pits’ that remained. The medium-term plan was to sack around half of Britain’s miners. The immediate aim, in 1984, was to shut 20 pits and lose 20,000 jobs within a year.

This was nothing new. Pits had been closing for years. In 1955 there had been around 700 collieries and 700,000 miners. By 1971 the numbers had declined to 300 collieries and 300,000 miners. The decline had continued under both Tory and Labour administrations. Demand for coal had been falling, and mechanisation had further reduced the number of mining jobs. A 1983 government report had then announced that 141 of the still-remaining 198 pits were ‘uneconomic’. In the 12 months before the start of the miners’ strike, the NCB had shut 23 pits and destroyed 21,000 jobs.

But under the previous Labour Government’s ‘Plan for Coal’, the rundown of the industry had been negotiated with union leaders. Not any more. ‘We’re going to have a miners’ strike,’ Thatcher is reported to have said to her newly appointed Energy Secretary the day after her 1983 second election victory.

Cortonwood Colliery was a moderate pit in a militant area. The calculation was that if Cortonwood could be closed, a demoralising precedent of defeat and redundancy would be set in the NUM’s South Yorkshire heartland. Resistance was anticipated, but the state was well prepared.

Paramilitary Tories

The Tories had conceived their ‘Ridley Plan’ for the defeat of the unions as long ago as 1978. Named after leading Tory politician Nicholas Ridley, its formulation reflected the takeover of the party by right-wingers committed to all-out class war in the interests of the rich and big business. It was nothing less than a paramilitary plan to break large-scale national strikes. The Tories were consciously playing for high stakes.

Coal stocks at the power stations were high and the winter was over. Back-up plans were in place to import coal and substitute oil as needed. Road haulage firms were ready to move coal using scab drivers under police protection. A centralised National Reporting Centre had been set up at Scotland Yard. The police had been expensively re-equipped with new vehicles, weaponry, body armour, and communications devices. Mobile riot squads had been set up, and around 11,000 officers given special training.

Publicly, the Tories claimed that the strike was a dispute between the NCB and the NUM; that the government was not involved. In truth, Thatcher, knowing it to be a decisive battle, was a leading protagonist in the conduct of the strike from start to finish. ‘The phoney war is over,’ declared The Financial Times, the British bosses’ in-house newspaper, on 7 April 1984. ‘The real struggle, the most profound and serious labour challenge to have faced the Thatcher Government, has begun.’

A special inner cabinet – known as MISC 101 – met twice a week. As well as senior ministers, it included military and other personnel from the state’s official strike-breaking organisation, the Civil Contingencies Unit. A steady stream of government misinformation was fed to the media and duly reported. In one shocking case, the BBC, the state-controlled broadcasting corporation, re-edited film of clashes at Orgreave to make it appear that pickets had launched an unprovoked attack on the police.

The Tories were careful to fight only one enemy at a time. When it appeared that other workers might open a second front in pursuit of their own claims – power workers, rail workers, dockers, pit deputies – the government bought off their leaders with concessions. Later, as the strike entered its long defensive phase during the winter of 1984/85, the government was again at work behind the scenes, encouraging a well-funded, highly publicised ‘back to work’ movement, deploying thousands of police in virtual occupation of mining villages in order to get handfuls of scabs into the pits, and unleashing the courts on both the NUM, whose offices and assets were sequestrated, and on individual miners, hundreds of whom were framed, fined, and imprisoned.

Class warfare

Clausewitz, the great philosopher of war, likened the material forces required by armies to the wooden handle of a spade but the moral forces to ‘the noble metal, the real, brightly polished weapon’. So it is with the organisations of the working class. The institutional forms of the trade unions provide a framework, but it is the consciousness, confidence, and combativity of ordinary workers that form the cutting-edge of the class struggle. The Tories’ primary aim in taking on the miners was to inflict a signal defeat that would break the morale of organised labour in Britain.

They faced resistance from Britain’s mining communities on a scale far beyond anything it had imagined; at times, indeed, it came close to defeat. But that does not alter the fact that it had sought the battle; it had prepared for it, provoked it at what seemed a propitious moment, and then waged it with unflinching ruthlessness and an uncompromising determination to achieve all-out victory. It did this because its ultimate purpose was the break the back of organised labour, and this required a signal defeat for Scargill, the miners, and the tradition of militant mass struggle. Only thus could the confidence and combativity of the British working class – the moral power that gave substance to the trade unions and underpinned Britain’s welfare state – be drained away.

By late May 1984, there were about 150,000 men on strike. Most miners had joined the strike at the outset; but not all. Once all the collieries in their own areas were out, the pickets moved into areas that were still working. For almost two months, the battle had raged in the 30,000-strong Nottinghamshire coalfield. But vacillation by the union leaders, the diversion of pickets elsewhere, and a massive campaign of violence and intimidation by the police ensured that two-thirds of Notts miners remained at work – a deep wedge in the solidity and effectiveness of the strike.

The battle for steel

The struggle for steel formed the second phase of the strike, and Orgreave became the decisive battleground. Could the miners mass in such numbers that they overwhelmed the police and shut the plant? Could they create a beacon of resistance to which other workers would rally?

The 5,000 pickets – in trainers and T-shirts – found themselves boxed in by 5,000 police on the 29 May, including helmeted cavalry, Alsatian dog handlers, and phalanxes of foot police fronted by lines in riot gear protected by long shields. Scargill marshalled his men and they pushed hard at the police line. But the miners were too heavily outnumbered, and the police response was a series of ferocious truncheon charges. ‘It was like a rugby scrum,’ recalled one of the pickets. ‘The police had their shields up in the air, walloping people with truncheons.’

Dozens of miners were injured, and 83 arrested. But morale was high, an example had been set, and Scargill appealed to ‘all miners and the whole trade union movement to come here in their thousands.’

Instead, the NUM’s Yorkshire Area leadership sent the pickets elsewhere. The numbers at Orgreave slumped to a few hundred, Scargill himself was arrested, and the momentum was lost.

Only on 18 June did the Yorkshire Area leaders again mass their men at Orgreave. For a time, the police were under pressure, sandwiched between several thousand pickets at the main gate and around a thousand more who had broken into the coke plant at the back. But it was not enough, and this time, when the police counterattacked, they unleashed an unprecedented torrent of gratuitous violence, much of it captured on film, much of this later serving to vindicate arrested miners when they were framed on riot charges in court. ‘There weren’t many arrests at the time,’ recalled one of the miners. ‘People got arrested when they went to hospital. One lad was surrounded by horses and beaten to the ground. I tried to take him to hospital. But when we got there, we were told not to go in – they were arresting injured miners.’

Scargill was among those injured. One miner saw what happened: ‘Late on the coppers were pushing us back with cavalry and riot police charges. Some lads were throwing stones. Arthur came down to tell them not to be so stupid and that we needed numbers to beat the police. Then he stood on the side of the road, on a small hill, and the riot cops charged again. People legged it. I saw two coppers go up to Arthur. He got a knock with a shield, then I saw batons in the air. I couldn’t see any more – I was legging it myself.’

The sickening violence of the police that day – state violence in the service of a ruling class determined to destroy an industry centuries-old and the working-class communities that depended on it for their livelihoods – could have been used to trigger solidarity action by other workers. Instead, yet again, the pickets were sent elsewhere the following day, and the battle for Orgreave – and with it, the battle for steel, and eventually the strike as a whole – was lost.

Fighting on

The miners and their families fought on. If they could last through the winter, maybe the coal would run out and the lights go off. They were sustained by the extraordinary resilience of their own communities, the women of the coalfields often now in the forefront of the struggle, and by the solidarity of hundreds of thousands of trade unionists and supporters, both in Britain and beyond. Right-wing millionaires set up a ‘back to work’ movement to encourage scabbing. Mining villages were put under police occupation in order to transport a single scab into a colliery. Picket lines were smashed by truncheon charges. Individual miners were attacked by police outside their own homes. Activists were arrested, beaten up, and then stitched up in court.

Meantime, the media bombarded audiences with lies about ‘picket-line violence’ and the ‘anti-strike miners’, the courts handed over the NUM’s assets to a Tory lawyer, and Thatcher spoke darkly of ‘the enemy within’. Labour Party and TUC leaders echoed these messages. ‘I condemn all violence without fear or favour,’ proclaimed Labour leader Neil Kinnock. ‘We cannot sharpen legality as our main weapon for the future and simultaneously scorn legality if it doesn’t suit us at the present time,’ he continued in a coded reference to the anti-union laws being used to break the NUM which the Tory press hailed as ‘statesmanship’.

But the lights stayed on all through that bitter winter. They were still burning when the snowdrops appeared. And that is when the will to fight on was finally broken; when it looked hopeless to carry on because the miners had been cast adrift by the leaders of the labour movement, because the solidarity action they needed to win had not been delivered, and because the Tory front appeared impregnable with the coming of the spring.

It had been the longest mass strike in history. It had involved about 165,000 men. Of these, more than 11,300 had been arrested, almost 5,700 put on trial, some 200 imprisoned, and nearly a thousand sacked. Several miners had been killed, one on the picket-line, others scavenging coal on slag-heaps in an effort to keep their families warm. Despite this extraordinary level of state intimidation, the ‘back to work’ movement engineered by the Tories, big business, and the police failed. The vast majority of strikers stayed out until the end and then marched back together, lodge banners flying, colliery bands playing, heads held high, eyes damp, pride in what had been done mixed with the bitterness of defeat.

One of the most powerful battalions of organised labour in the world had been broken. If the miners could not win, other trade unionists asked themselves, who could? The confidence of the British working class was shattered. Workplace militancy and union resistance to ‘Thatcherism’ quickly collapsed. In the 1970s, the average number of recorded working days ‘lost’ per year in industrial disputes was 12.9 million. In the 1980s, it was 7.2 million, as workers fought a series of bitter defensive battles. In the 1990s, by contrast, it was just 660,000, and in the 2000s, 680,000. In 2010, only 92 strikes were logged for the whole of Britain, the lowest total ever recorded.

Thatcher faced a broken-backed labour movement after 1985. This represented more than a turning-point in British history. Thatcher was the pioneer of a neoliberal counter-revolution which aimed to remodel the capitalist economy in the interests of big business and the rich. This counter-revolution would roll on for the next 25 years and spread across the entire world system. The shock waves from the state violence unleashed at Orgreave in the summer of 1984 have yet to be stilled.

The Big Bang

Though dubbed ‘the Big Bang’, it seemed to concern only the relatively small number of people who worked in ‘the City’ – the square mile or so of historic London that forms Britain’s financial district. In fact, though they could not have known it at the time, what happened on 27 October 1986 concerned everyone – not just in Britain, but across the world.

The defeat of the miners had been a pivotal event in world history. Organised labour’s most powerful battalion had been drawn into battle and crushed. The defensive line protecting the job security, wage rates, union organisation, public services, and welfare provision established in the immediate post-war period had been breached.

But if the picket-line violence of Thatcher’s police was one face of the neoliberal counter-revolution, the computerisation of City banking was another.

Despite the fancy dress, the arcane rituals, and the public façade of traditional rectitude, the City of London is the world’s premier tax-haven and a global trend-setter in financial speculation and secrecy. The feathered hats and gilded coaches screen corruption, grotesque greed, and Mafia-like contempt for democracy.

Of the City’s 350,000 workers, four-fifths work in ‘financial services’. London’s share of this global industry puts it ahead of every other financial centre in the world – ahead of New York, ahead of Frankfurt, ahead of every city elsewhere with a major stock market. Globally, the City of London accounts for 35% of currency exchanges, 45% of over-the-counter derivatives trading, 50% of equity sales, 55% of global public offerings, and 70% of Eurobond turnover. That this should be so is a direct result of the Thatcher Government’s Big Bang.

From the 1950s to the 1970s, manufacturing accounted for about a third of Britain’s national output and about 40% of total employment. After Thatcher came to power in 1979, sharp decline set. Manufacturing’s share had fallen to less than a quarter by the late 1980s, a fifth by the late 1990s, and now stands at around 12% of output and 8% of employment.

The world’s greatest tax-haven

This decline is the reverse image of the rise of finance. For nearly a century, until the 1970s, British banking had expanded gradually in line with growth in the real economy. The value of British banks amounted to about half of GDP throughout this period. Then, as industry collapsed, finance took flight; so much so that British banking is now valued at five times GDP. Sitting as it does at the centre of a global ‘spider’s web’ of tax-havens that includes the Isle of Man, the Channel Islands, the Cayman Islands, the British Virgin Islands, and Hong Kong, the City of London controls an estimated US $3.2 trillion in offshore deposits; that is, around 55% of the global total. All thanks to the Big Bang.

So what was it all about? London had emerged as an international financial centre in the late 17^th century, its robust financial institutions providing the funds to build the navy, the empire, and the wealth of Britain’s fast-growing mercantile and industrial bourgeoisie. By the late 19^th century, the City of London was the financial hub of a globe-spanning imperial colossus.

Other economies, however, notably those of Germany and the United States, were beginning to overhaul Britain’s former industrial lead. Declining economically but forced to fight two world wars to protect its empire, Britain was effectively bankrupted, becoming a financial dependency of the United States in the 1940s. The new realities of global power were obscured at first by Britain’s central role in the defeat of Nazi Germany. But they were exposed to the cold light of day in the Suez Crisis of 1956.

When Britain, in alliance with France and Israel, went to war against an Arab-nationalist regime in Cairo, it faced a storm of protest at home and abroad, and was crippled when the Americans, harbouring imperialist ambitions of their own, pulled the financial rug. Old-style empire was ending. New-style Cold War politics was reconfiguring global power. The British Empire had ruled over 700 million foreigners in 1945; its domain had shrunk to just five million by 1965. The City of London, if it was to continue to prosper, had to come to terms with the end of empire and the decline of sterling.

It was the dollar, of course, that had replaced the pound as the world’s principal reserve currency. The US-funded rebuilding of European capitalism after the war had created a vibrant ‘Eurodollar’ market – where European assets were priced in US dollars. Here was a financial motor which might enable the City of London to soar phoenix-like from the wreckage of empire. ‘As the good ship Sterling sank,’ wrote historians of British imperialism P J Cain and A G Hopkins, ‘the City was able to scramble aboard a much more seaworthy young vessel, the Eurodollar. As the imperial basis of its strength disappeared, the City survived by transforming itself into an ‘offshore island’ servicing the business created by the industrial and commercial growth of much more dynamic partners’.

The New City

London thereby transformed itself from the sterling-based imperial banking centre which it had been, in one form or another, since the days of Queen Anne into an effectively denationalised, unregulated tax-haven for dollar-denominated dealings. And in no time at all, hot money started flowing into London. The $200 million on deposit at the end of 1959 had swelled to $1 billion by the end of 1960. The Old Etonians in bowler hats who ran the City had stumbled into a gold-mine.

The London-dominated Eurodollar market just kept growing. Flooded with dollars migrating from more-highly-regulated Wall Street and from the newly-oil-rich Gulf states, total value reached an estimated $46 billion in 1970 and $500 billion in 1980.

Then came the Big Bang. Engineered by Cecil Parkinson, Thatcher’s Trade and Industry Secretary, and Nicholas Goodison, Chairman of the London Stock Exchange (LSE), it abolished fixed commissions, ended the demarcation between stockbrokers (advisors) and stockjobbers (traders), replaced face-to-face dealing with computerised trading, and opened up LSE business to foreign ownership.

It is easy to miss the significance of this. ‘The Big Bang of 1986,’ writes financial journalist Nicholas Shaxson, ‘enhanced London’s offshore status, as thrusting Americans muscled in, demanding stratospheric salaries, buying up British banks, and shaking up the City’s gentlemanly club …’ Moreover, ‘regulatory competition from ‘light-touch London’ became a crowbar for lobbyists around the globe: “If we don’t do this, the money will go to London,” they would cry, or, “We can already do this in London, so why not here?” The City emitted anti-regulatory impulses around the world, deregulating other economies and their banking systems as if by remote control. The British Empire, it seemed, had faked its own death’.

A bonfire of regulations

Twenty years after the Big Bang – with the world then on the brink of the credit crunch and the crash – City share trading had increased 15-fold and derivatives trading 60-fold, two-thirds of City workers were employed by foreign firms, and British ‘exports’ of financial services had jumped from £2 billion a year to £23 billion a year (Treanor 2006).

Where London led, the world had followed. Thatcherite deregulation, like Thatcherite union-busting, was about remodelling global capitalism. Competition from London meant government authority in relation to money and banks evaporated everywhere in a world-wide ‘bonfire of regulations’.

Unleashed, uncontrolled, accountable to no-one, global finance-capital then inflated itself into a gigantic bubble of speculation, fake assets, and electronic debt. A minority grew fantastically rich. The rest grew poorer or got deeper into debt. And when this ‘permanent debt economy’ finally crashed – as it was always bound to do – it plunged humanity into a new, dark, bitter world of austerity and poverty.

Our world: a world based on the subjugation of working people beneath an avalanche of greed.

Remaking the future

‘There is no alternative’ – TINA – became one of the rallying-cries of Thatcherism. No alternative to free-market capitalism. No alternative to privatisation and the profit motive. No alternative to letting the rich get richer at the expense of working people and the welfare state.

We hear it again today. No alternative to austerity. No alternative to paying the debt and bailing out the bankers. Cameron, Clegg, and Miliband echo the arguments of Thatcher in the 1980s. Only now the bubble has burst, so it is no longer a matter of taking the shackles off enterprise, but of propping up a bankrupt system.

And here is the problem for them. Our side is often down, but never out. As long as there is exploitation, oppression, and violence, there is class struggle. We can be weakened, but we never go away. And in time, the resistance always recovers.

The bitterness can lie hidden for decades, locked inside the minds of millions who hate was is happening but feel there is nothing they can do. The latest poll shows the shallowness of Thatcher’s legacy. Instead of wanting to roll back the state, most working people want to roll it out: 38% want higher welfare spending; 47% think salaries of £300,000 too high; 52% think the government should redistribute income; 74% think the government should ensure a decent income for all; 78% think it is the government’s job to help poor children get ahead.

The problem is not that people want to live in a society driven by competition, greed, and selfishness – a society modelled on Thatcher’s ghastly vision. It is that they lack the confidence and the organisation necessary to fight for something better.

But there are signs that that is changing. More and bigger meetings. More and bigger protests. Way over a thousand signed up to the People’s Assembly, and climbing fast, still with two full months to go.

This is the best answer to the neoliberal ruling class as they bury their icon this Wednesday. Our side, finally, is getting organised to fight.

Neil Faulkner is the author of ‘A Marxist History of the World from Neanderthals to Neoliberals’ which is available from Pluto Press