Consciousness of Sheep
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As with race, gender and sexuality, age has been employed by the current western elites as a tool to divert attention away from class. Younger people today are actively encouraged to hold the “Baby Boomers” – born between 1945 and 1965 – responsible for almost all of the ills of the modern world. It was, allegedly, the Boomers’ copious consumption which led to climate change. It was their fixation with house prices which created the modern housing shortage which has left younger generations stuck in their parents’ homes. It was, supposedly, Boomers’ political pressure which created an unsustainable welfare state which younger generations pay for in taxes but have little chance of enjoying in their own old age.
It is a seductive story. For sure, there was a section of the early Boomers – those who came of age between 1955 and 1965 – who, along with an earlier generation, reaped the benefits of an expanded education system and the growth in high-paid technical and managerial employment. It was from this group that the drive for home ownership accelerated – many enjoying essentially free (because of the 1970s wage-price spiral) mortgages even as their employers paid into generous final salary pensions. And without them, Margaret Thatcher would never have been elected. As Ed Howker and Shiv Malik note:
“In 1979 Margaret Thatcher received a 16 percent swing in support from young people aged 18-35 – the baby boomers – significantly more than any other group… Without their support she wouldn’t have gained power.”
Those Boomers who didn’t enjoy the benefits of education and private pensions are included among the 13 Percent of today’s retirees entirely dependent upon the state pension. A further 740,000 single retirees and 500,000 retired two adult households are “mostly dependent” upon the state pension – topping up through small amounts of savings and/or income from work. Younger Boomers – those who came of age after the 1973-74 oil shock – had a somewhat different experience, something more akin to the later “Gen-X” (1965-1980) and will also include many future dependents upon the state pension alone. Leaving school into the economic vandalism of the first Thatcher administration, their final years in employment have been marred by the string of crises which have followed the financial crash in 2008.
Indeed, while many (but certainly not all) Boomers eligible to vote in May 1979 put their mark next to the local Tory candidate, their reason for doing so was likely more nuanced than the belief that “greed is good” and a desire to make their fortune off the back of council house sales and the plundering of public assets. The younger – and especially the poorer – Boomers had been particularly hard-hit by the inflation of the 1970s and, following the wave of unofficial strikes which came to be known as the “winter of discontent,” were no longer prepared to support a Labour Party which acted like a hostage to the trade unions. That is, Howker and Malik’s Boomers – including one in three trade union members – may have been less voting for the Tories than against a Labour movement that was out of ideas.
I use the phrase “out of ideas” deliberately, because (rather like today) the switch from Callaghan’s Labour to Thatcher’s Tories marked the end of what has come to be called the “post-war consensus.” That is, the belief that the state must play an active role in the management of a “mixed economy” with a particular focus on maintaining full employment. It was an exceptionally successful approach in two of the defeated states of the Second World War, occupied West Germany and Japan, where economic models based upon the tripartite corporatism favoured by the pre-war fascist states was imposed within a democratic framework. But while both Harold Wilson and Edward Heath attempted to build a similar partnership between state, capital and labour in the 1960s and 1970s, Britain’s trade unions proved too weak while its investment class was too fragmented. While, for example, Britain had nationalised critical but unprofitable industries – coal mining, railways, shipbuilding, etc. – it was unable to create big industrial hubs similar to the Japanese Zaibatsu or West Germany’s Soziale Marktwirtschaft (Social Market Economy).
Not that the Second World War hadn’t resulted in a shift in economic and social policy thinking in the UK. The concept of a “people’s war,” although often exaggerated, reflected a rejection of the old politics that had resulted in depression and war in favour of a more pro-social – although still liberal-capitalist – approach. The best-selling publication of the war in the UK was Liberal Peer William Beveridge’s 1942 Social Insurance and Allied Services – aka “The Beveridge Report” – which set out an insurance-based state-administered scheme for the post-war conquest of the “five giants” – Want, Disease, Ignorance, Squalor, and Idleness.
Underlying the appetite for the shift in political focus was the wartime realisation that we are each dependent upon one another to a far greater extent than is apparent in peacetime. This was as true on the home front, where people faced bombing along with the privations of rationing, and were often drafted into some form of “voluntary” war work in addition to their work or household responsibilities. In the military, interdependence was even more critical since any failure to work together would result in death or severe injury.
Many of the politicians and the wider political class which formed and developed the post-war consensus were drawn from that “greatest generation” which had fought through the second world war – some, such as MacMillan and Churchill, had been in the trenches in an earlier war. But each found the idea of a “mixed economy” and a “social safety net” more in accordance with their personal experience than the classical liberal political economy of earlier and later ages. Indeed, while it suited Labour apologists and later Tory ideologues to portray the 1945-51 Labour reforms as a rupture with a less caring past, this was mostly mythology.
Take the still venerated NHS for example. It is certainly true that the private healthcare of the 1930s left poorer people dependent on charity for even basic healthcare. But it is wrong to imagine that the Labour government invented the NHS from scratch, or – as is sometimes claimed – based it on Aneurin Bevan’s experience of mutual health funds among the miners in his constituency. Rather, concerned about the likely (and as it turned out over-estimated) impacts of aerial bombing, the Chamberlain government began to lay the grounds for a wartime Emergency Medical Service (EMS) in 1938. New Regional Hospital Officers were employed to map out the healthcare resources in each region of the UK, after which the state began to nationalise hospitals and directly employ thousands of medical staff. A national blood transfusion service was also established.
With the fall of France and the establishment of the wartime coalition government in May 1940, Labour leader Clement Attlee became de facto domestic prime minister – leaving Churchill to deal with the military and foreign affairs. One consequence was that the EMS was greatly expanded. By 1941, it employed more than 1,700 full-time and 560 part-time doctors, along with thousands of contracted healthcare professionals. It also recruited medical professionals from the USA and from among refugees from occupied Europe – including from the Polish School of Medicine which operated from Edinburgh University between 1941 and 1949. By 1945, much of what became the NHS was already in place… most of what remained was the process of haggling over salaries and employment terms.
Aneurin Bevan – who famously claimed to have stuffed the consultants’ mouths with gold – had been something of an unofficial leader of the opposition during the war years and was not – as many believe – Secretary of State for Health in the 1945 government, but rather, Secretary of State for Housing and Health. Bevan later admitted that 90 percent of his time was taken up with the housing crisis that followed the war… an acknowledgement of sorts that much of the work to create a National Health Service had already been done during the war years.
Perhaps the greatest evidence for the myth of 1945 though, is that the incoming Tory government in 1951 both embraced and extended the reforms – for example, the Tories abolished prescription charges and built more (although arguably lower quality) public housing. The threat to the post-war consensus did not come from ideological differences within a political class whose experience of war and depression made them more pro-social but rather from Britain’s loss of geopolitical power following defeat in the summer of 1940.
By the autumn of 1940, Britain was effectively bankrupt – it could no longer raise the US dollars needed to supply the arms and munitions required to continue the fight. Nor did the German invasion of the Soviet Union improve matters, since the best Britain could do was to extend the convoy routes around the treacherous seas north of Norway to supply a Soviet military that seemed on the brink of defeat. Only by becoming a client state of the USA could Britain emerge on the winning side of the war. But this left it with the shadow of an empire that was even harder to maintain than it had been in the interwar years.
The 1945 government repeated Churchill’s 1925 error of attempting to maintain the value of the pound at pre-First World War levels, spending Marshall Aid funds on the British military rather than the modernisation of its nineteenth century industrial base. The inevitable result was that British exporters saw orders steadily decline as an artificially high pound left them too expensive compared to their competitors.
Things got worse after Suez (1956) when the division between the City of London Eurodollar banks and the broader manufacturing base opened up. The former got rich on the back of the over-valued pound even as the latter desperately needed a big devaluation. At the same time, a political class which could never admit the end of empire refused to allow the pound to find its true level, instead using austerity and spending cuts in an attempt to destroy domestic demand for imported goods.
With the end of the American Texas Railroad Commission’s control of global oil prices and the ensuing collapse of the Bretton Woods monetary system, inflation hit the western economies – not, as the ideologues would have us believe because governments printed too much money, but because the underlying cost of everything made from, made with or transported using oil rose dramatically at a time when western states still enjoyed a degree of prosperity.
In the UK, where currency controls prevented widespread capital flight, it was often the investment class which lost out… alongside those workers not in unions or in unions too weak to contend for above-inflation pay increases. It was the former – not mentioned in the 1979 Tory manifesto – which was to be the key reform of the first Thatcher government. And without that reform, it is doubtful that the turn to what we now know as “neoliberalism” would have succeeded.
It is notable that nine of Thatcher’s twenty-two 1979 cabinet members were war veterans – most of them, like former tank commanders William Whitelaw and Lord (Peter) Carrington were seen as “Heath Tories,” waiting for the opportunity to overthrow Thatcher. The would-be neoliberals, like Geoffrey Howe and John Biffen were mostly from the so-called “Silent Generation” (1928-1945) which had grown up during the war but had been too young to fully understand it. Silent – because they were a generation told to be seen but not heard – but also silent insofar as the responsibility for what they did in government was deftly passed onto the younger Boomer Generation.
On 12 July 1979, Chancellor Howe, to the surprise of most of his cabinet colleagues – announced the end of currency controls. This was the first step on the road to the 1986 “Big Bang” financial deregulation and began the process of offshoring manufacturing. To make matters worse, the arrival of large quantities of oil and gas from the North Sea served to drive the pound even higher, destroying swathes of Britain’s export industries and leaving two million unemployed people dependent upon a less generous social security system.
That was the deal. The City of London and the plethora of new services linked to it got rich while Scotland, Wales, Northern Ireland, along with northern and western England got decimated. As a sop to members of the Silent Generation in those regions, Incapacity Benefit was extended and used as a form of early retirement, while housing benefit was extended to cover the cost of residential care for older people… reforms that would be reversed by the time the Boomers reached retirement age.
In fact, Malcolm Riftkind, promoted to Secretary of State for Scotland, was Thatcher’s first Baby Boomer minister and still the only Boomer in her 1987 cabinet. By the time the Boomers reached political maturity, the neoliberal die had already been cast… and Thatcher had convinced most of us (including the Labour Party leadership) that there was no alternative. The Silent Generation, knowing little about war or depression, had pulled off a political and economic revolution while leaving the Boomer generation – under Blair’s leadership – to take the blame for what they had done. And perhaps the greatest irony is that the anthem which, for today’s younger generations, supposedly sums up everything wrong with the Boomers’ outlook on life, Imagine, was written and recorded by yet another member of that Silent Generation.
As you made it to the end…
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