Decades of neoliberal attacks on public services and the working class now mean never ending crisis, but there is no opposition unless we make it, argues John Westmoreland

Well here we are, nearing what should be the end of a forty-year neoliberal nightmare. The current crop of hapless but ever so fiscally responsible politicians are having to face up to reality. They are out of luck, out of ideas and will soon be out of office.

School children in the UK have started the new term with the threat of their schools collapsing because of cheapskate building practices back in the 1960s. On top of that hospital managers have been informed that they need to have evacuation plans ready if the danger of RAAC concrete collapse is identified. This crisis is the bitter fruit of neoliberalism and is a microcosm of a general capitalist crisis, which is why it will run up to the next election, and will foster further Tory splits. 

That the problem with RAAC dates back to the 1960s highlights the fact that capitalism has always insisted on spending the least possible on social needs, even during the era of the post-war boom. The institutions of the welfare state were always badly compromised from the start, with the Atlee government itself introducing charges for dental and eye care in the NHS, for example. Nonetheless, the turn to neoliberalism marked a major shift away from welfare-state compromises towards a wholesale assault on the public sector and the costs of social reproduction in general. The suite of policies we call neoliberalism first gained traction at the end of the 1970s and took hold under the premiership of Margaret Thatcher in the UK and the presidency of Ronald Reagan in the USA. It went on to dominate government, business and academic thinking across much of the world.

The ascendancy of neoliberalism came at a terrible cost to society. In short, neoliberalism was the project of asserting the unassailable political and economic power of the capitalist class, through the use of brutal military and financial coercion, and under the populist banner of individual freedom. The result was the prioritisation of profit without concern for social outcomes.

Neoliberalism gained traction because of the crisis that engulfed capitalism at the end of the 1960s, with declining rates of profit, and greater capitalist resistance to the costs of social welfare and public services. The limitations of Keynesianism were thus exposed, and exacerbated by the oil crises of the early 1970s that caused rapid price fluctuations and economic instability.

Neoliberal offensives

The early champions of neoliberalism were never sure where it would take us. It was a reactive policy against the perceived enemies of trade-union power at home and unreliable governments abroad. 

The first neoliberal assault, commemorated this month, was against the social-democratic government of Allende in Chile. It was an attack on the very ideology of democracy, and the insistence that the market had the right to function without democratic impediment.

The IMF was the other wing of neoliberal attack. Countries that had progressive governments could be starved of funds on the one hand, and face CIA encouraged opposition on the other. If a country had the resources Western capitalists needed, be it Chilean copper or Iraqi oil, then economic and military intervention would secure it.

Opposition was inevitable. However, it has to be said that neoliberalism enjoyed immediate success that bolstered its appeal. In particular, neoliberalism appealed to middle-class aspirations to be free from the constraints of state or democratic supervision, and to embrace the opportunities to make money.

Harry Enfield satirised Thatcherism in the 1980s with his character Loadsamoney who was a self-employed builder in London’s construction boom. London was transformed into a centre of finance that brought new and formerly undreamed of wealth to a new layer of entrepreneurs.

But there was a visible downside too. As investment shifted in the direction of new technology and the financial sector, unemployment in the industrial heartlands rose exponentially. Thatcher waged a war on trade unions sector by sector, which culminated in the defeat of the National Union of Miners in the great strike of 1984-5. As union power waned and unemployment increased, so did the demands on the welfare state.

Welfare faced a double-whammy. The decline of trade-union strength enabled Thatcher to attack the working class on the welfare front by closing hospitals, cutting benefits and turning the rising unemployment figures to use by forcing down wages.

Thatcher was the darling of speculators and investors who took the opportunity to create a variety of think tanks and lobbying outfits that sought, much to Thatcher’s delight, to advise government on a range of policies from taxation to education.

They made it clear that the future of welfare had to be both affordable, and, where possible, profitable. A powerful minority of super-rich speculators gained increasing influence over welfare provision of which they had no understanding, and of which certainly no love or respect. But none of these accomplishments could have been achieved without an all-out ideological war against anything that smacked of socialism.

Thatcher’s war cabinet

The signs of social decay were all too evident in Thatcher’s Britain, nowhere more so than in government itself. Many Tories regarded themselves and their party as being essentially paternalistic. They didn’t object to bringing down the trade unions, but they couldn’t agree to the complete abandonment of welfare provision. The result, and it is well worth remembering as the divisions and tensions between the current crop of Tory MPs get more protracted, was what Thatcher was to call the ‘bitterest and most difficult period of my government’.

Thatcher staffed her cabinet with the most ardent free-market fanatics. The most articulate and able of these was Keith Joseph who was nicknamed ‘the mad monk’ because of his absurd conviction that the market was the sole force for good in the world. Thatcher and Joseph waged war against their critics, Conservative paternalists were labelled ‘wets’; a public-school reference to weaklings and procrastinators.

Joseph was one of the foremost neoliberal thinkers who sought to leave in-coming governments with, in his words, ‘no alternative’ to the leadership of finance in policy making. Indeed, the market was to be an instrument of discipline, to be wielded against recalcitrant Tories, the Labour opposition and trade unions, as well as, and this is particularly important when considering today’s crisis, the layer of public servants that sought to defend the quality of public services.

The neoliberals have been successful in closing down parliamentary opposition by framing every policy debate in terms of whether it meets the diktat of the Treasury. The problem for any genuinely reformist politician is that no reforms are possible without confronting a state that is overwhelmingly dominated by the Treasury, the City, the World Bank and their committees of oversight such as the OBR. The sight of Starmer setting the ambitions of an incoming Labour government within the framework of ‘fiscal responsibility’ is ample evidence that Keith Joseph’s ‘no alternative’ dictum still carries the day.

Privatisation and deregulation

The state that the neoliberals inherited was different from the state today in a number of ways. The most obvious difference is that the war on the ‘nanny state’ has devastated public services. Alongside this there has been a major shift in the way public services are administered and how policies affecting public services are formulated.

Tony Blair summed up this shift best, with his usual infuriating glibness, when he sought to impose mayoral systems on local government. Blair said that it would make decision making easier by freeing it from ‘red tape’. In reality this has meant increasing executive power by freeing it from democratic accountability. 

The empowerment of market forces in local government has caused, and continues to cause, massive disruption and dislocation to what were once integrated public services. Social housing, care in the community and access to essential social services provided a decent safety net for many communities that were being battered by deindustrialisation. But wholesale privatisation, outsourcing and deregulation wrecked a functioning system. This system gave us the Grenfell disaster.

The bankruptcy of Birmingham City Council is a monument to the erosion of any notion of sensible and essential planning. Welfare professionals have predicted this kind of scenario for the last forty years, as planned and integrated systems mutated into marketised chaos, and level-headed objectors found themselves pilloried as ‘dinosaurs’ and ‘merchants of despair’. 

Public committees that used to scrutinise local authorities on behalf of the public have been largely abolished. From town planning to school governors the market has free rein. Some public watchdogs were simply turned into hawkish free-market promoters. Ofsted’s role in recommending ‘failing schools’ for takeover by academy chains is just one example from many.

Privatisation, outsourcing and deregulation have gone hand in hand. Bodies set up to protect service users have been hijacked to advance the interests of private providers. But the removal of professional opinion and their replacement by government ‘experts’ has resulted in important safety nets being removed. Above all, the cutting of funds across health and education has led to the weakening of professional oversight and the disasters that crop up on an ever more regular basis.

Build the fight back

Margaret Thatcher, in her autobiography, boasted that her greatest achievement was Tony Blair becoming leader of the Labour Party. It didn’t embarrass him. Thatcher was his first guest when he entered Downing Street.

Blair was the darling of the right-wing press. He performed great service to the ruling class. He got elected because the public hated the Tories, but used his popular landslide unflinchingly to maintain Tory policies on public spending and taxation.

Now, as Starmer is set, almost inevitably, to be the next prime minister, he is already basking in the eulogies of the worst enemies of the working class. The bloke next door, and his dog too, know that when Starmer boldly champions his commitment to ‘fiscal responsibility’, he is simultaneously wrapping his tongue around the boots of bankers and Treasury officials.

He is carrying Keith Joseph’s dictum that the aspirations of the masses need to be exorcised by a hefty dose of monetarist discipline. Starmer’s ‘responsible government’ is nothing other than the selling out of the people whose votes he craves.

However, tempting as it is to pour endless scorn on the futility of Starmer and Labourism generally, we need to stand back and engage with a broader reality. There is a crisis of capitalism – system failure. It is crumbling before our eyes and offers us nothing other than continuing crisis. There is no clearer argument than this for building a left which challenges, rather than just manages, the nature of the whole system.

Starmer’s attacks on the left in Labour is at the same time an unacknowledged attack on the working class. There is nothing Starmer and his backers in the ruling class fear more than the organised working class taking a stand. Workers fighting back inevitably offer a democratic alternative to the dictatorship of the market. 

Our support for a working-class fightback should be unlimited and unconditional. It is the job of the left to develop working-class opposition on every front because ending the madness of capitalist profiteering is now, more than ever, a life and death issue.

We have to be the opposition that Starmer and Labour ought to be. We have to take the fight to the Tory Party Conference as a first step. The Tories were the main architects of the current disaster and they need to pay the price. And every punch we land on their free-market lunacy will deflate Starmer’s idea of ‘responsible government too’.