“Economic
Liberalism” Today
Mrs Thatcher talked of freeing the economy from state control.
However, in reality she was only against particular forms of state control
and regulation. It depends which class is being controlled, regulated
or assisted by the state.
In 1976, the Centre for Policy Studies was founded by Alfred Sherman,
Margaret Thatcher and Keith Joseph, from discussion groups which met in
the previous two years (1974/5). Meetings were held throughout the mid-1970s
in London and many academics and post-graduate students were invited to
attend. Those who did so included F.A. von Hayek and Karl Popper,
The Centre set its aim to place Margaret Thatcher into power in the Tory
Party and remove Edward Heath who had been twice defeated in his attempts
to introduce legislation to curb working class struggle. Nicholas Ridley
drew up the Ridley plan to defeat the miners whilst working for the Centre.
F.A. von Hayek - member of the anti-Marxist Austrian School of Free Market
Economics - was one of the leading lights of the CPS. The ideas of the
true pioneers - if you can call them that - of this ideology - like Hayek
and Robbins, were adopted by those who took a leading part in advising
the Tory Government. Hayek, himself, in the first two years of the Thatcher
government was resident in Downing St., four days a week.
They claimed to base themselves upon the classical economists like Adam
Smith. In fact one of the institutions, which was one of the chief protagonist
of Thatcherism was named the Adam Smith Institute. Above all they were
anti-working class. They declared that all intervention by the state was
part of the steady advance of collectivisation of which Socialism was
one aspect.
They aimed to convince the populations of the world that the Stalinist
repression was an inevitable product of planned economy and a proof that
no other system was possible but anarchic capitalism based on the relationships
of the market and production for profit. In 1989/90 with the collapse
of Stalinism, they declared there was a democratic revolution in the East
and unleashed a wave of propaganda seeking to undermine the struggles
of the working class and shake its confidence in its emancipation through
its own rule over society.
Thatcher, with loud triumphalism, told the people of Eastern Europe and
the Soviet Union that militant trade unionism, collectivism and the "nanny
state" was finished; the present and the future belonged to the "free
capitalist market".
The economic liberals not only declared opposition to the interventions
of the state in taking over industry, but also were vocal against its
interventions in free market relationship between workers and capitalists.
Here of course, the hypocrisy of this ideology of 'freedom' is revealed
very clearly. As always an ideology of the ruling class in society about
freedom or democracy means freedom or democracy for it. So under this
banner of free market relations the Tory government has used the state
to carry out the legislation against trade union rights. It has restricted
the freedom to strike and actively used state repression in the miner’s
strike of 1984/5.
Richard Cockett gives some very interesting quotations from the 'economic
liberals' setting out their antagonism to Keynes, who they denounced as
seeking to evade the problem of dealing with the strength of the working
class, by finding an easy road that would only pile up problems in the
future.
They attacked Keynes for his premise that the biggest danger to the economy
was unemployment. They declared that the greatest danger was inflation,
due primarily to the working class organisations pushing up wages and
creating a 'rigidity' in labour labour costs.
There had to be the destruction of the trade union strength in order
to create a 'free' economic society. It was a nakedly class theory. Hayek
himself made a central question of the trade unions, in a paper, which
he read to a conference of the Mont Pelerin Society, which he formed in
1947.
That if there is to be any hope of a return to a free
economy the question how the powers of trade unions can be appropriately
delimited in law as well as in fact is one of the most important of all
the questions to which we must give our attention.
It has to said that there is certainly a difference between
the 'economic liberalism' of the end of the twentieth century and the
ideas of Adam Smith and other classical economic liberals at the end of
the 18th century. Then, capitalism was in its youth. The industrial revolution
was surging forward creating a capitalist class with confidence and a
future.
It was a class, which was unleashing a mighty expansion
of production, engineering and scientific achievement, never seen nor
envisaged before. With complete self-assurance, they concluded that this
system was the last in history and entirely in accord with human nature.
Today, "orthodox" economists can explain nothing
about fundamental movements in society and are not generally concerned
with observing the laws of its development. Most of them search for keys
in the financial and share markets, movement of credit and capital. They
repudiate any scientific observation of capitalism as a whole, building
abstract mathematical models or seeking psychological explanations for
the crises, which shake capitalist society. So that the movement of markets
and production becomes a matter of psychological analysis. The doctrines
of today's "neo-liberalism" are backward, irrational and reactionary.
So far as upholding the "natural individual" then it is a "natural
individual" which is a self-seeking, profit hungry, money-grubbing
individual who makes his riches in the most parasitic departments of capitalism,
linked with speculation and uncontrollable corruption.
The men and women who determine the ruling ideology of capitalism
today, under the name of freedom of the individual, are justifying the
exploitative relations of a capitalist society which is spinning more
and more rapidly into an anarchy which threatens humanity itself. Their
attacks on the working class are propagandised with 'scientific' facts
of people who refuse to find jobs that are not there, dubious statistics
and selective research on everything from unemployment to the development
of intelligence and bio-genetics.
The chapters in Marx' Capital on how capital was accumulated for the expansion
of capitalism in Britain are filled with the facts and statistics of this
change and also have the most moving accounts of the separation of the
majority of the rural population from their common property and their
herding into the factories. Further, a large part of that accumulation
was gathered from the slave trade.
The development of the working class as a class of 'free
labour' did not come about by peaceful means. Capitalism broke up the
old relations in the countryside and created the industrial towns where
an industrial working class crowded together under the conditions described
by Engels in his Condition of the Working Class in England in 1844.
Capitalists opposed vigorously, legislation controlling
'free' workings of capitalism. In the last century, they opposed legislation
against child labour, legislation on cutting down the working day to ten
hours. As they argue about the minimum wage today, then also, they argued
that these reforms would only mean that workers should lose their employment
because the factory owners would not be able to continue. To reduce hours
from eleven to ten a day, argued Senior, one well-known economist, would
mean a collapse of production because it was in the last hour that profit
was made.
The blind development of societies driven by profit has
brought in this century, the threat that an exploitative society will
bring humankind to untold devastation. The decisive factor which enabled
the working class to climb out of brutal and repressive working and living
conditions was the counter force of its solidarity and organisation in
struggle. The relationship of Capital and Labour can never be free and
equal as the capitalists own the means of production, giving them economic
mastery over labour and the force of economic compulsion in a society
born in violence and conflict.
Before the Second World War capitalist governments increased
state intervention in the economies in their social and economic crises.
The Transitional Programme of the Fourth International declared:
The necessity of 'controlling' economy, of placing state
guidance over industry and of 'planning' is today recognised - at least
in words - by almost all current bourgeois and petty bourgeois tendencies,
from fascist to social-democrats.
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