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Thatcher’s ‘Miracles’ Live On

With the death of Margaret Thatcher we might reflect that we certainly need political leadership in a new key after the debacles unleashed by the leaders of the 1980s.

So many of today’s political heroes harked back to on Left and Right were active in the 1980s. Keeping in mind that a hero for some is a vision from hell for others, it is worth asking why these figures emerged as and when they did. The death of Margaret Thatcher is a useful time for such reflection.

The kind of commentary found in the media today is not likely to be terribly helpful. Did Thatcher, despite her media image of the Iron Maiden, have a sensitive side? Could she feel for those who were displaced and broken by her insistence on market solutions? Or those ruined by her resistance to the unions—especially the miners unions? Was she really hard, or just someone who saw the larger picture of what needed to be done? While these and other such matters largely compose the elements of her construction as a media icon, it will be suggested here that they are all mystifications when it comes to the real significance of her actions.

This is not to deny that she had capacities of her own in finding her way through the dilemmas she faced. One is tempted to see these narrowly in terms of a blinkered and absolute determination to pursue her interests, in this respect not unlike Australia’s current Prime Minister. It may be that Thatcher also had more complex capacities, although a number of her close associates attributed her success to an extremely narrow frame of mind. The issue, though, is not really such capacities but rather the meanings associated with Thatcher’s transformative agenda. The main reason she is so highly (or lowly) regarded is what is considered her transformative ‘success’. But this success was surely not a consequence of personal qualities.

Thatcher was one of a number of political leaders in the 1980s attributed with miracle powers because of the novelty of their actions in breaking with past institutional arrangements: whether confronting union power or giving new openings to the market, de-regulating financial institutions, challenging welfare assumptions, embracing global institutions, or championing the individual. One can also point to Ronald Reagan, and in Australia, Bob Hawke and Paul Keating. (John Howard and Peter Costello come from a later decade but essentially carried on the new ‘tradition’.) It has been argued that these 1980s leaders all had the courage to step outside the contemporary political-economic norms of their time, but this is misleading. It attributes too much to their personal courage and says nothing of the underlying transformations they simply took for granted and of which, by and large, they had no understanding. Nor did they have any inclination to understand, preferring to act, take advantage of the opportunities at hand and remain oblivious to their consequences. We are still suffering the consequences today.

A transformation for which we are still paying today? This could be a statement about how policy changes in the 1980s have undermined the welfare state and the security once offered by union organisations. It could be a statement about the demise of any sense of social alternatives after the collapse of the socialist states, or the present overwhelming, if declining, power of the US military. It could be a statement about how the social security offered by families and local institutions has imploded, leaving the individual to cope as best as she or he can. It could be a statement about the GFC.

There are other examples. But how do these relate to Thatcher? What about the GFC, for example? The connection lies in the contemporary demise of the global economy, a collapse that has just begun. Thatcher can hardly be blamed for bad management of the economy today, but she, like Reagan, Hawke and Keating, have been credited with the rise of certain institutions in the 1980s and it is these that directly link to the cause of the collapse that began in 2008.

It is of course ironic that the very developments that are still celebrated as major achievements and attributed to these political names are yet to be brought into contention. Thatcher is associated with the re-emergence of the market in social affairs, but she and others simply took for granted the novel elements in the emerging new economy of the period. Thatcher, for instance, took for granted the silicon chip that made this resurgent market possible. This market had new powers to draw the domestic sphere into its logic through advertising and to create a global economy based on the computer and the internet. But this market is just one of the elements of something much larger: an emergent social world. To put it another way, the ‘miracle’ technology of the silicon chip is a product of emergent social relations: a development within capitalism, in turn dependent on the new university and the centrality of intellectual practices that are practical in the world.

The Thatcher and Reagan, Hawke and Keating years were those of a fundamental social transformation which lay beneath the conscious range of politicians and policy makers. In terms of precedents, this transformation goes back to the emergence of high technology first concretised in the absolutely novel form of the atomic bomb—producing the unprecedented from natural powers that were previously regarded as ‘nothing’. In the 1980s this new relation between the academy and capitalism gained more embracing expression in a range of institutional developments: the market unleashed with such violence by Thatcher; her attack on the unions in the United Kingdom and its ‘moderate’ equivalent in Australia with Hawke and Keating’s Australia Reconstructed (both strategies answered to the same transformation); the attack on the traditional university, with demands for practical outcomes in the economy led by high-tech science (pursued with diligence in Australia by John Dawkins); various developments in money and finance facilitated by high technology that flew in the face of long-standing historical constraints and led progressively to the financial debacle of the GFC; the shift in trade whereby currencies were floated against others, facilitating globalisation of the economy at the expense of local culture and production, simultaneously opening the door to widespread currency manipulation by corporations and states (such as Japan’s current policies of forcing down the Yen against other currencies in a wild attempt to propel its economy out of twenty years of crippling deflation); and de-regulation of banking and currencies on a grand scale, promoted by the Australian Labor Party as the fundamentals of a reformist party.

These are the tip of the iceberg of unprecedented transformations in the nature of our economy. Long-standing constraints on how to manage economy within bounds disintegrated from the 1980s on. Dick Cheney observed that Reagan proved that deficits no longer mattered—budget deficits or trade deficits. He lowered taxes and ignored the consequences. The financing of the deficit by export-oriented economies like China re-investing export income—leading to unmanageable distortions—became the typical solution, all facilitated by the liberation of the floating currency and its availability for manipulation. What would normally have been massively inflationary was offset by low-cost imports, and they destroyed local economies.

There is no need to blame Thatcher for these unsustainable developments; but we should see that the underlying processes that allowed her to perform her ‘miracle’ were fundamentally socially transformative, and she leapt onboard. She rode a tiger far more vigorous than she was, and like all of the ‘miracle’ politicians of her time she promoted the unsustainable.

As I am suggesting, these developments in economy were really elements of something much larger: a transformed society in which social relations were reorganised around the more abstract potentials made possible by the high technologies, while more concrete forms of association and community were thinned out. That people experienced a heightened sense of being alone, or individual, in this new context should not surprise us. That they often came to be drawn into excessive consumption as an expression of meaning in the world was one of the necessities of the emergent economy. That the economy became morbidly attached to debt and that debt became associated with ‘prosperity’ (by and large in the form of asset inflation) were elements that culminated in the GFC. Indebtedness had reached record and unsustainable levels. Now, after the crisis, we are faced with underlying deflation, which the Japanese know all about but cannot tell us how to fix. When debt peaks, and ‘prosperity’ is dependent upon debt, there are long-term consequences. Peter Costello, the ‘world’s best treasurer’, was awash with debt-supported budget surpluses. It was close to a miracle! Wayne Swan, embattled by deflation despite a resources boom, is puzzled by where revenue and surplus have gone.

As serious as these consequences are, they are phenomena of deeper realities about the society we have entered. Drawn away from the natural world as it was once experienced, we have, at a social level, lost our feel for natural constraints. Climate change is one example; living with the limits of our bodies is another. The social world that began to take shape in the 1980s is unsustainable, and we have merely experienced the first major expression of this with the GFC. With the death of Margaret Thatcher we might reflect that we certainly need political leadership in a new key after the debacles unleashed by the leaders of the 1980s.

John Hinkson

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