Thatcherite Legacy

[Fancypants]

On my environmentally-friendly way into work this morning I got to thinking about the view that the Blair/Brown premiership have in terms of making the British public feel more prosperous, thereby making themselves more popular. This followed a conversation I had at the weekend about how our parent's generation had been seduced by Thatch and her notion of giving people a more direct stake in the financial wellbeing of the nation, principally through share and home ownership. Clearly, the Blair/Brown government has tried very hard to ape this same strategy, so far, with a large degree of success.

I think Thatch actually got off quite lightly as she got the boot before it all went pear-shaped. So, for the last 15 years the consensus view has been that we had a house price crash and recession because of economic mismanagement by Lamont et al, which includes the ERM fiasco. Never mind the fact that the true cause of all busts... are the preceding booms.

So, in the eyes of both New Labour's policymakers and the public at large, there are no fundamental flaws with the strategy. Arguably it is worthwhile to an extent, but early successes inevitably seem to lead to later excesses and a damaging slump as a consequence. I guess the drug is too intoxicating for governments to put down once they have taken their first hit.

So, in essence, I suppose I am saying that this drive toward a "stakeholding" democracy is something that has yet to be discredited and is widely accepted as being a "good thing". But is it? A large part of what has driven this boom to it's current unsustainable levels is a much broader public (and, by extension, amateur)involvement in speculation, and we are yet to see either the real consequences of this, or whether the architects of the whole thing will be around to face any unpleasant aftermath

[The Masked Tulip]

We live in an era of smokn' mirrors. The UK is dominated by the fat cats in the City with the rest of us mere cannon fodder for whatever financial scame they come with next - pensions, PEPs, dot.con shares, houses and whatever will be next.

Globalisation SHOULD have been a good thing. It is now being used as a means of greed.

I have no doubt that the majority of the British people simply have no clue as to what mess the country is in financially, what mess the global economy is in and what mess many of them are in also. Sooner or later this house of cards is going to come down, either when the bank bigwigs decide to call all the loans in or when there is a major global crisis, and an awful lot of people are going to be left in financial ruin.

The cold reality today is that even Labour politicians are in bed with the fat cats from the City and that the global economy is run by corporations.

[Clouseau]

We live in an era of smokn' mirrors. The UK is dominated by the fat cats in the City with the rest of us mere cannon fodder for whatever financial scame they come with next - pensions, PEPs, dot.con shares, houses and whatever will be next.

Globalisation SHOULD have been a good thing. It is now being used as a means of greed.

I have no doubt that the majority of the British people simply have no clue as to what mess the country is in financially, what mess the global economy is in and what mess many of them are in also. Sooner or later this house of cards is going to come down, either when the bank bigwigs decide to call all the loans in or when there is a major global crisis, and an awful lot of people are going to be left in financial ruin.

The cold reality today is that even Labour politicians are in bed with the fat cats from the City and that the global economy is run by corporations.

True enough, & compounded by the fact that govts take a short-term (ie next election or two) approach to policy, & avoid unpopular decisions that are a long-term necessity (pensions-crisis anyone?), whereas corps are thinking longterm strategies - the govt emperor has no clothes..

[right_freds_dead]

im with the masked tulip on this one.

no matter what party or new policy comes out - the game remains the same.

the unseen untouchables run this country.

the tycoons, landowners and the house of lords.

everything else is just playing the game of democracy, where we make one change here we lose one change there and so on. which ever way we cut it, they find another way to thrash us.

[ChrisM]

If people understood how the economic system works, there'd be a revolution in a minute.

- Henry Ford

[Ritters]

This is the best thread I have read in a long while. It ought to be pinned.

[right_freds_dead]

"dont knock grey democracy - its the only democracy we've got."

-roy castle. 1978

[marko]

im with the masked tulip on this one.

no matter what party or new policy comes out - the game remains the same.

the unseen untouchables run this country.

the tycoons, landowners and the house of lords.

everything else is just playing the game of democracy, where we make one change here we lose one change there and so on. which ever way we cut it, they find another way to thrash us.

Yup, the money men really have got it pretty much sewn up: they are the real power, and it is by their whim whether we prosper or not. 'not' in the long term as any period of prosperity is usually just an illusion as they load the game, in preparation for a transfer of wealth from everyone else to them (watch it happen in the coming recession). It is a scam of the highest order...the financial 'economy' has truely become a menace to everyone.

[FTBagain]

ChrisM,

Very good quote.

I believe that the economy is actually quite simple, the main driver being the interest equation!

It ensures that the rich (money lenders) get richer. Hardly surprising since they invented the equation a few thousand years ago. Some simple sums.

£100 at 5% a year gives you a gain of £5, worthless

£100k at 5% a year £5k, buy a new car but cannot live on it

£1m at 5% a year £50k, now you can live OK on that.

Point is if you have lots of money you can put it in a bank account and put your feet up. Or you can lend it to someone and put your feet up a bit more.

If you compound the interest, the difference is even more marked. Percentages and compounds are where it is at. OK very simple examples, but every investment I know gives you a percentage return and that is compounded.

The Rich get Richer etc.

Like Henry Ford said......

Edited October 11, 2005 by FTBagain

[Guest Charlie The Tramp]

On my environmentally-friendly way into work this morning I got to thinking about the view that the Blair/Brown premiership have in terms of making the British public feel more prosperous, thereby making themselves more popular. This followed a conversation I had at the weekend about how our parent's generation had been seduced by Thatch and her notion of giving people a more direct stake in the financial wellbeing of the nation, principally through share and home ownership. Clearly, the Blair/Brown government has tried very hard to ape this same strategy, so far, with a large degree of success.

After his 1997 election victory who was one of the first Blair invited to number 10 for advice, you guessed it, Margaret Thatcher. She entered with a smile and left grinning like a cheshire cat. That was the day I knew NuLabour were closet Tories.

[Marina]

Globalisation SHOULD have been a good thing.

Really? I wonder what you base that on. Notions like sharing the wealth of the world around? Making sure third world countries start to enjoy first world living standards?

Can't think why anyone would think this would happen. In a capitalist run global economy - subject to transportation costs - it is obvious that goods will be produced wherever people are prepared to work for the least money.

I have never understood the fascination with global trade. Surely the ideal circumstance is to be self-sufficient as a nation. If we (or anyone) becomes dependent on other nations for supplies of goods then, if there is any problem with the supply, war will be used to ensure or gain supply. The word 'oil' is leaping to mind at the moment.

[Fancypants]

After his 1997 election victory who was one of the first Blair invited to number 10 for advice, you guessed it, Margaret Thatcher. She entered with a smile and left grinning like a cheshire cat. That was the day I knew NuLabour were closet Tories.

well I never knew that!

Don't suppose you have a link of any kind?

I would have thought they would at least have had the decency to be a touch more subtle about it.

[Guest Charlie The Tramp]

Don't suppose you have a link of any kind?

Remember it quite well.

Quick slot slipped in on the evening news while have dinner, choked on me steak and kidney.

Something to do with international affairs they claimed.

[malco]

Perhaps we should give credit where it is due: the current exploitative machine is so remarkably subtle that most people don't understand how it works, whereas it is more effective than any other economic exploitation in history to extract surplus value form the peasantry.

I call it the "Feudal-Commercial" system. It is a marriage of the old English/Norman feudal system with the later joint-stock private capitalist system. The marriage produces a far more effective system than the two old systems were in isolation. Feudalism is restricted by the productivity of the land and has no access to the new profits of industry. Private capitalism exposes individuals to great risk of losing their money in ventures that don't pay off.

Solution - the Public Limited Company! Separate capitalist from the smutty, dreary business of actually making money by subjugating all industrial companies to being mere gambling chits on a vast green baiz table called the Stock Market. The landed aristocracy then had a socially acceptable way of gaining access to the profits of industry without exposing themselves to the risk of any one endeavour, since they could spread their risk across many companies and their commitment was limited to how long it takes to sell a piece of paper. Jolly good! No break to loafing about in plush clubs and hunting/wife-swapping at the weekend. Topping! Clean hands too!

This is pretty much the system we have inherited from Victorian England, with much the same system having spread via Wall Street to the entire planet. Through this system the wealthy automatically get richer than everybody else because the divide-and-rule culture of the Stock Market sucks all available wealth from industrial companies and passes it to shareholders; that is, the system sucks wealth from those who do the work into the hands of those who do not do the work and have no direct involvement in the real economy. This is the feudal character of the current set-up. It elevates and sustains a super-class of parasites whose only income is surplus value. Since the FTSE goes up at about four times the rate of wages, it is pretty clear why the rich get richer and industrial investment gets neglected in favour of meeting the next dividend.

The result can only be a progressive culture of indentured slaves serving a super-class of speculators.

But you have to admire the beauty of it. Compared to the Soviet system, it is vastly more effective in applying the interests of the powerful over the weak. No secret police is necessary (although lately this has begun to change), no censorship is necessary (the system is too subtle, and it bribes the peasants with motor cars and mortgages into believing they are rich wne in fact they are in debt, all their lives long).

It is a beautiful system, evolved over the last 170 years, refined to have accommodated the minor inconvenience of universal suffrage. Yes, it is a fine system and once you understand it you have to stand back and admire it, even while despising it too.

Edited October 11, 2005 by malco

[Fancypants]

Perhaps we should give credit where it is due: the current exploitative machine is so remarkably subtle that most people don't understand how it works, whereas it is more effective than any other economic exploitation in history to extract surplus value form the peasantry.

I call it the "Feudal-Commercial" system. It is a marriage of the old English/Norman feudal system with the later joint-stock private capitalist system. The marriage produces a far more effective system than the two old systems were in isolation. Feudalism is restricted by the productivity of the land and has no access to the new profits of industry. Private capitalism exposes individuals to great risk of losing their money in ventures that don't pay off.

Solution - the Public Limited Company! Separate capitalist from the smutty, dreary business of actually making money by subjugating all industrial companies to being mere gambling chits on a vast green baiz table called the Stock Market. The landed aristocracy then had a socially acceptable way of gaining access to the profits of industry without exposing themselves to the risk of any one endeavour, since they could spread their risk across many companies and their commitment was limited to how long it takes to sell a piece of paper. Jolly good! No break to loafing about in plush clubs and hunting/wife-swapping at the weekend. Topping! Clean hands too!

This is pretty much the system we have inherited from Victorian England, with much the same system having spread via Wall Street to the entire planet. Through this system the wealthy automatically get richer than everybody else because the divide-and-rule culture of the Stock Market sucks all available wealth from industrial companies and passes it to shareholders; that is, the system sucks wealth from those who do the work into the hands of those who do not do the work and have no direct involvement in the real economy. This is the feudal character of the current set-up. It elevates and sustains a super-class of parasites whose only income is surplus value. Since the FTSE goes up at about four times the rate of wages, it is pretty clear why the rich get richer and industrial investment gets neglected in favour of meeting the next dividend.

The result can only be a progressive culture of indentured slaves serving a super-class of speculators.

But you have to admire the beauty of it. Compared to the Soviet system, it is vastly more effective in applying the interests of the powerful over the weak. No secret police is necessary (although lately this has begun to change), no censorship is necessary (the system is too subtle, and it bribes the peasants with motor cars and mortgages into believing they are rich wne in fact they are in debt, all their lives long).

It is a beautiful system, evolved over the last 170 years, refined to have accommodated the minor inconvenience of universal suffrage. Yes, it is a fine system and once you understand it you have to stand back and admire it, even while despising it too.

I understand the points you are making, and I am not without sympathy. However, the issue that I was trying to address was more whether it is sensible to sell involvement in this "machine" to the wider public. It has been dressed up by both Thatcher & Blair as a democritisation of our society by opening up these markets to the wider public. In fact, the net effect seems to have been greater exploitation of the naive by the professionals, and overall, greater wealth transfer upward and a larger discrepancy between the richest and the poor.

The whole thing reminds me somewhat of what Rowntree's studies in York were finding in the 20th C... in 1950, poverty had been virtually abolished according to the measures used in the 1930 study. But Rowntree understood that poverty is relative not absolute. What matters is not that this generation of poor people all have cars, TVs etc etc... where their parents/grandparents did not, but that the gulf between them and the people around them (who they will inevitably compare themselves with more, given that they experience it every day) is wider.

We compare ourselves with our peers, not our predeccesors. Hence the prevailing sense of envy, dissatisfaction and resentment (or paranoia and arrogance if you happen to be on the more "fortunate" side of the equation). We have lost sight of how fortunate we are in so many ways.

Free market fundamentalists will argue that these markets make everyone richer. That may be true in absolute terms, but arguably not so in relative terms.

Note how communism took hold in societies that were in material retreat. People had an urge to bond together in order to retain what little they had. In that sense, communism is a very conservative ideology. People here have suggested that if peak oil is a reality, and economic depression is a consequence, then we will see a shift toward totalitarianism in the West. It seems like a plausible argument to me.

[MarkG]

People here have suggested that if peak oil is a reality, and economic depression is a consequence, then we will see a shift toward totalitarianism in the West.

'_WILL_ see'? I take it you've been asleep for the last few years if you haven't noticed that we're already well on the road to totalitarian government right here in the UK.

[Guest growl]

On my environmentally-friendly way into work this morning I got to thinking about the view that the Blair/Brown premiership have in terms of making the British public feel more prosperous, thereby making themselves more popular. This followed a conversation I had at the weekend about how our parent's generation had been seduced by Thatch and her notion of giving people a more direct stake in the financial wellbeing of the nation, principally through share and home ownership. Clearly, the Blair/Brown government has tried very hard to ape this same strategy, so far, with a large degree of success.

I think Thatch actually got off quite lightly as she got the boot before it all went pear-shaped. So, for the last 15 years the consensus view has been that we had a house price crash and recession because of economic mismanagement by Lamont et al, which includes the ERM fiasco. Never mind the fact that the true cause of all busts... are the preceding booms.

Ahh...so Thatcher is going to get blamed for this crash and recession as well eh? Well the left are good at passing the buck. They've been doing it a prime ministers question time for the last 7 years. The fact is Labour and I mean Labour not New Labour, because they are one and the same, was left with a brilliant economy.

They've squandered it. No-one else...just them, and no amount of trying to pass the buck to Tories from ten or so years ago is going to wash with the public.

[Fancypants]

Ahh...so Thatcher is going to get blamed for this crash and recession as well eh? Well the left are good at passing the buck. They've been doing it a prime ministers question time for the last 7 years. The fact is Labour and I mean Labour not New Labour, because they are one and the same, was left with a brilliant economy.

They've squandered it. No-one else...just them, and no amount of trying to pass the buck to Tories from ten or so years ago is going to wash with the public.

I'm sorry but I really think you're missing the point. I'm not taking a party political stance on this, though I suppose I should have been more careful about mentioning words like "Thatcher" and "Labour" on this board!

I firmly believe that economies move in cycles. The Major government was unfortunate (just like the Brown one will be) to exist at the time of a serious downturn. Thatcher and Blair have been the beneficiaries of such cycles. I think we are fooling ourselves if we believe that those governments had much influence on the operation of those cycles.

My argument was more that, while governments should be doing more to smooth out the booms/busts (like GB promised) they seem bent on exacerbating them. I wondered if anyone agreed with my idea that farming out home and share ownership may be a contributory factor to this.

[doomwatch]

An who do we have to thank for the concept of interest ? Look no further.

[malco]

I understand the points you are making, and I am not without sympathy. However, the issue that I was trying to address was more whether it is sensible to sell involvement in this "machine" to the wider public. It has been dressed up by both Thatcher & Blair as a democritisation of our society by opening up these markets to the wider public. In fact, the net effect seems to have been greater exploitation of the naive by the professionals, and overall, greater wealth transfer upward and a larger discrepancy between the richest and the poor.

Yes I take your point. I think you are right. I notice that house prices were fairly stable up until the early 1970s. Do you think this might have had anything to do with the collapse of the Bretton Woods agreement (in effect, the end of the Gold Standard)

Note how communism took hold in societies that were in material retreat. People had an urge to bond together in order to retain what little they had. In that sense, communism is a very conservative ideology. People here have suggested that if peak oil is a reality, and economic depression is a consequence, then we will see a shift toward totalitarianism in the West. It seems like a plausible argument to me.

I agree. But recall that oil prices increased by a factor of 20 in the 1970s and it didn't make the West collapse. Mind you, that was increase from an absurdly low level. The current increases have been a rebound from also absurdly low prices in the late 1990s. A "sharp" Peak Oil probably would strangle us like a nutter strangling a cat. Anything can happen. 99% of the people out there haven't a clue the risks they face.

Edited October 11, 2005 by malco

[bandylegs]

I firmly believe that economies move in cycles. The Major government was unfortunate (just like the Brown one will be) to exist at the time of a serious downturn. Thatcher and Blair have been the beneficiaries of such cycles. I think we are fooling ourselves if we believe that those governments had much influence on the operation of those cycles.

I don't think that enough is made of this point fancypants; governments don't control the cycles. Brown had didn't perform a "miracle" nor will it be "Browns recession".

He should however be judged on what was achieved in that boom period. I've always believed that such periods should be a great time to improve the infrastructure of an economy. I think that GB has completely failed in this respect.

Edited October 11, 2005 by bandylegs

[Guest growl]

I firmly believe that economies move in cycles. The Major government was unfortunate (just like the Brown one will be) to exist at the time of a serious downturn. Thatcher and Blair have been the beneficiaries of such cycles. I think we are fooling ourselves if we believe that those governments had much influence on the operation of those cycles.

I agree that economies like much of what happens in life do move in cycles. But I have to say that governments can have a great deal of bearing on them. Major was a prat and yes I am a Tory. But I have to say that he is one of the worst prime ministers in my memory, and I thought that when he elected.

I believe that Thatcher helped create a good economy eventually. But Major nearly wrecked it. Clark brought back the good economy and Blair and Brown have squandered it.

Thing about economies and governments is that the former may work in cycles. But the latter only thinks towards the next election. I believe Blair and Brown did not believe they would be in power this long, at the begining. Then thought they could delay the damage untill the end of a third term. That way they could blame the Tories when the crash happened, as they would be back in power.

But unfortunately the economy is unravelling before they can do this.

I also believe that the Tories know that how the economy is, is how the public votes. That's why they haven't really been serious recently about getting in to power. They know that the best time is when the economy is on its knees in four years time.

It very cynical. But that's how it works as far as I see it.

[Guest Charlie The Tramp]

I believe that Thatcher helped create a good economy eventually.

I will always remember her tenure as one of high interest rates, not a good record with inflation, and high unemployment, with the working population returned to fear and serfdom.

Similiar as today with this government, work for a bowl of rice a day or we will find someone who will.

[Fancypants]

I will always remember her tenure as one of high interest rates, not a good record with inflation, and high unemployment, with the working population returned to fear and serfdom.

Similiar as today with this government, work for a bowl of rice a day or we will find someone who will.

at the risk of sounding like a pinko, I must concur.

I grew up in a steel town in the North during the 80s. It was hardly champagne lunches, I can assure you.

We haven't referred to the grimness of the early 80s in particular... ok, hindsight has cast the 3m unemployed and race rioting into a kinder light but it is curious to consider that even Michael Foot (hardly a photogenic Blairite type) was running Maggie close prior to the Falklands.

Anyway, I don't want to kick off another party political slanging match, I'm just hoping to illustrate that things are far from that simple.

Mind you, if this thread was restricted to the original issue then no-one would be remotely interested!

[MarkG]

Hint: if there are two barbers in a town, do you go to the one with the great haircut or the one with the awful haircut?

I will always remember her tenure as one of high interest rates, not a good record with inflation, and high unemployment, with the working population returned to fear and serfdom.

Hardly surprising after the mismanagement of the 70s. Labour and the pre-Thatcher Tories trashed the economy with high inflation, nationalisation and out-of-control unions, Thatcher brought some sanity back into the economy with high interest rates, privatisation and the destruction of oppressive union power... and she gets blamed for it?

In the 70s the country was basically bankrupt, had to go begging to the IMF, and even Idi Amin was offering to send aid to the UK because the place was such a crap-hole. Thatcher may have been a scum-bag in her own ways, but we'd be a third-world nation right now if she hadn't taken the economic steps that she did.

Sadly NuLab are now taking us right back to what she saved us from.

Edited October 11, 2005 by MarkG