Theories of Thatcherism by Peter Kennedy

8/14/2019 Theories of Thatcherism by Peter Kennedy

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A CRITIQUE OF EXISTING THEORIES OF THATCHERISM

AND A CONTRIBUTION TO A MARXIST THEORY OF

CAPITALIST DECAYPETER KENNEDY

Making sense of Thatcherism' has preoccupied the Marxist left in Britain

for the past decade or more. Much has been written on how 'Thatcherism's'

'authoritarian style populism' has swept the 'hegemonic' board in terms of

ideology, politics and culture.1 As Andrew Gamble observes:

The term 'Thatcherism' was widely adopted and used to indicate

the style of Thatcher's political leadership, the new ideology

which she endorsed, and the policies of the Thatcher Government.

All these elements are important, but Thatcherism is best

understood as a specific political project, not just of Thatcher

herself, but of an important current within the Conservative

Party.2

To Andrew Gamble's credit he has at least attempted to provide a

structural explanation for the emergence of so called 'Thatcherism' (see A.

Gamble 1990). As he acknowledges above, however, his concern has been

primarily with a wholly politically based structural analysis. He has placed

Thatcherism within the Right wing tendency which has emphasised the

two-fold need for 'a free economy/strong State' and a rejection of

'collectivism' and 'social Democracy'. At this political level, questions of

what exactly constitutes a 'free economy' or 'collectivism' are never

discussed. In other words a wholly political account generally rests upon

the acceptance of the empirically given and so by-passes, or takes for

granted, the all important social categories of explanation that could be

1 See in particular Marxism Today throughout the 1980s.

2 Social Studies Revue, VoI6 No3 Jan 1991, p 88.

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provided by Marxism. In this sense a Marxist political economy of

'Thatcherism' is still required.

Marxist categories must surely be the basis upon which to construct theories

of ideological and political hegemonies. More importantly, a Marxist

political economy may well lead one to re-examine and place in a new

context the whole concept of a 'Thatcherite hegemony'. Looked at from

this point of view, it will hopefully become clear that present day Marxism

has surely been running before it has learnt to walk. Confirmation that this

is the case comes easily to hand. For example, we know that 'Thatcherism'

emerged out of the ashes of 'Labourism' but Marxists have yet to explain

the full implications of 'Labourism'. How then can they possibly offer an

adequate explanation of 'Thatcherism'? Certainly, no one denies the link

between the two.

There are two main strands to current Marxist theory on the subject of

Labourism. On the one hand, Labourism is reduced to two amorphous

concepts which have preoccupied the minds of the left: 'Fordism' and

'Keynesianism'. As such, Thatcherism then becomes aligned with theemergence of an equally ambiguous concept, 'Post-Fordism'. On the other

hand, Labourism is linked to the failed project of halting capitalist decline.

Thatcherism is then aligned with the emergence of a new capitalist strategy

to halt the process of decline. The latter point of view offers most potential

for both an understanding of Thatcherism and Labourism. However, to

date, Marxists have failed to adequately explain what exactly capitalist

decline means. These criticisms will be taken up further in section 1 below.

There it will be argued that the ambiguities of'Fordism/Post-Fordism'" are

so profound that they cannot be used as the political economic basis of

either Labourism or Thatcherism. Following this, in section 2, a brief

outline of Marx's labour theory of value is provided. Here the emphasis is

placed on the contradiction within labour. It is this contradiction and morespecifically, its negation, that lies at the heart of a Marxist understanding

of Labourism and Thatcherism. This latter claim will be taken up and

expanded on in section 3. In section 3 we are specifically interested with

the emergence of "Labourism" and 'Thatcherism'; the article does not

concern itself with a detailed analysis of the two social categories once

consolidated. To understand why they emerged is the key to understanding

the nature of capitalist decay in Britain, which is really the central concern

of this article. The argument in this section is as follows. Firstly, Marxism

must come to terms with 'Labourism' as a social category which itself

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emerges out of a decaying form of capitalism and which extends

capitalism's life beyond its years. Secondly, the emergence of

'Thatcherism', for all its minor successes, has served only to escalate

capitalism's decay and so bring closer the day when workers must take

democratic power into their own hands, as capital wanes and conscious

regulation of social labour becomes a political necessity. The subjective

factor now becomes the important question.

1.1: THE AMBIGUITIES OF 'FORDISM/POST-FORDISM'

For Stuart Hall, who has written extensively on the topic, "Thatcherism's

project can be understood as operating on the ground of longer, deeper,

more profound movements of change". These longer deeper, more

profound movements turn out to be a loose ensemble of technical changes

all and sundry have termed 'Post-Fordism'. Given 'Post-Fordism's'

apparent importance for understanding 'Thatcherism', it is essential to

define it. Unfortunately 'Post-Fordism' has evaded all attempted

explanation. As such it has remained a catch-all phrase for every passingflight of fancy in society in the past 15 years. Hall and most others who

adhere to this ambiguous concept are at least certain about one thing:

'Post-Fordism' is no "epochal shift, of the order of the famous transition

from feudalism to capitalism"; it is merely another onward and upward

phase in the life of capitalism, or, as Hall puts it: the transition "from one

regime of accumulation to another, within capitalism".

According to Hall anyone expecting a precise definition of such an

important social category is simply misguided. As Hall would have it, "This

stand and deliver way of assessing things may itself be the product of an

earlier type of totalising logic which is beginning to be superseded. In a

permanently transitional age we must expect unevenness, contradictory

outcomes, disjunctures, delays, contingencies, uncompleted projectsoverlapping emergent ones". One response to this might well be to ask

3 S Hall and M Jaques, New Times, p126, 1990, Lawrence and Wishart

4 Ibid. p 127 (emphasis mine).

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why one should give the status of a totalising concept such as Tost-Fordism'

to what Hall admits is an ensemble of accidents. Firstly, as noted, he

informs us that 'Thatcherism' is the product of something 'deeper' and

'more profound', namely Post-Fordism; then we are told 'Post-Fordism' is

part of a set of 'contradictory outcomes' and 'uncompleted projects'. So

which is it to be? Of course, tendentially, they can be both, however Hall

does not explain why or how this could be so. This is not just Hall's problem,

but a problem for a whole epoch of 'Marxisms'.

The lack of clarity is to be expected due to the fact that 'Post-Fordism' itself

is the amorphous offspring of that reified concept 'Fordism': reify 'Fordism'

and one reifies 'Post-Fordism'. The theory of 'Fordism' was, it has to be

said, a gross reification of capitalist social development. Its history is a long

one, however, for Marxists, 'Fordism' came to prominence with the 'french

regulation school' of Marxism. Basically Fordism, as conceived by the

'regulation school', is an 'ideal-type' concept in the best tradition of

Weberian sociology and the worst traditions of Marxism. A technically

determined capitalist historical development is invoked, in which twodistinct capitalist stages follow, one after the other, in chronological time.

The first stage was characterised by absolute surplus value extraction

(extensive accumulation) and an unstructured distribution/consumption

sphere (competitive regulation). The second stage was relative surplus

extraction (intensive accumulation, or 'Fordism') and a

structured/managed distribution/consumption sphere. The reason for the

change from one to the other had little to do with the specifically capitalist

valorisation process and Capital-Labour contradiction. Instead the change

was said to be a product of the mismatch between production Departments

'one' and 'two' which was, in turn, exacerbated by a lack of consumer

demand for final products.

The movement from stage one to stage two of capitalist development soughtthe resolution of, what was effectively claimed to be, a realisation problem.

This was to be accomplished by the management of consumer demand via

Keynesian inspired fiscal policy. However, no sooner had 'Fordism'

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5 Ibid.


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resolved the contradiction than it began to falter under yet another value

realisation problem as consumer demand failed to keep up with

accumulation once again. This gave birth to the next stage in capitalism's

apparent quest to regulate production with consumption - 'Post-Fordism'.

Here it is argued 'Fordism' -characterised by relative surplus value

extraction, monopoly capitalism, the standardised product and worker -

had given way to a Tost-Fordist' world, characterised by the break up of

monopoly, product differentiation and the flexible, privatised worker. This

is not to suggest these tendencies within modern capitalist relations do not

exist. However the nature of such changes are only superficially

understood within a 'Fordist-to-Post Fordist' paradigm.

As Brenner has pointed out the whole foundation of

'Fordism/Post-Fordism' is profoundly ahistoric, depicting as it does a linear

path of ever higher stages of capitalist development. It is also

technologically deterministic, in that each stage is a particular type of

productive technique driven by the mismatch within the mode of

distributing the final product. It is fair to comment that the socialcontradiction between Capital and Labour never gets beyond a cameo part

in the whole proceedings. Because of this, such paradigms cannot explain

why Labourism had to be dissolved. Surely the whole point of the

regulation theory approach to capitalist development is to stress

capitalism's ability to regulate the turnover of commodities in production

with the realisation of their values in the act of exchange? If this follows,

then the regulation of production and consumption must still remain of

paramount importance to capitalism. As such, one would expect the

'Post-Fordist' transition would be towards greater regulation, perhaps an

increased dosage of Labourism? Yet the new 'mode of regulation' -

'Post-Fordism' - has brought deregulation of patterns of consumption, the

removal of Labourism, and a further uncoupling of finance capital vis-a-visproductive capital. This latter dominance of circulatory capital over its

fixed nature in production is intimately linked with the emergence of

Thatcherism. However, 'Post-Fordism' and 'regulation theory* has had

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6 See R. Brenner's article, "The Regulation Approach: Theory and History", in New Left

Review 188, Sept 1991.


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little of real relevance to say on this matter. On the whole it has to be said

that 'Post-Fordism' is more a category of the mind than a real abstraction

from reality. As such it is hardly the sort of stuff on which to base an

understanding of 'Thatcherism'. But what of that other category which has

been used as a basis of explanation for the emergence of 'Thatcherism' -

capitalist decline? The chief problem here is that Marxism has failed to

adequately explain what exactly it is about capitalism that is in decline.

Some of the Marxist offerings in this are critically assessed below.

12: MARXISM AND THEORIES OF CAPITALIST DECLINE INBRITAIN

Given the 'twilight state' of capitalist social relations in Britain, one might

think that Marxists would have developed a clear analysis of what exactly

is in decline. Unfortunately this has not been the case. Of course there has

been no shortage of theory which puts class struggle at centre stage of

enquiry into decline. The problem is most of it is intra capitalist class

struggle and hardly any concerns itself with the Capital-Labour conflict. Inthis respect much Marxist analysis of British capitalism has pumped out a

surplus of theory depicting the intra class rivalry between finance capital

and industrial capital. Some, like Coakley and Harris (1983), are

concerned to reveal the institutional intricacies of the 'City1, and the conflict

of interest which emerges between this financial network and industry over

the allocation of money capital (see also G. Ingham, for the more intricate

analysis of commercial capital). Others (Anderson 1964,1987: Overbeek

1990) have sought to emphasise the political conflict within factions of

capital. Their stress is on the 'hegemonic block' which one faction

(finance) has held over the British economy.

P. Anderson (1964,1987) has argued that the source of decline has nothing

to do "with factors internal to the capitalist social relation". His basicargument is as follows: Despite the fact that 'the present crisis is a malady

of the whole society", it has had nothing to do with the working class or

production relations. This class has "achieved no victories, but its defeats

were astonishing", claims Anderson. Outmanoeuvred in the 1832 reform

movement by industrial capital; its political economy of 'Owenism'

defeated by 1836; its Chartist alliance crushed by 1848; politically

decapitated by Fabianism and patronised by a labourist elite; the working

class had, according to Anderson, become acquiescent and conservative

and remains so to this day. The problem of decline, then, for Anderson,

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has nothing to do with labour. In fact it has nothing essentially to do with

the capitalist class! The problem, we are told, is outside the internal

relations of capitalism, it is in fact pre-capitalist in nature. Apparently a

landed aristocratic elite have never relinquished state power and are thus

able to block the road to capitalist development by stifling the

entrepreneurial spirit with traditional aristocratic values of immediate

gratification and abhorrence of thrift.7

Another important study of British decline has been G. Ingham's

Capitalism Divided(1984). Ingham's stated task was to go beyondAnderson's 'anti-industrial capitalist aristocratic hegemony" thesis, not so

much to reject it, on the basis that Anderson sought to explain capitalism's

decline via social groups outwith the capital-labour relation, but to theorise

it more deeply by breaking down the distinct features and functions of

'money capital' and its dominance over 'productive capital'. Ingham, like

Anderson, rejects the explanatory power of the labour theory of value and

takes the next logical step of rejecting the applicability of Marxist historical

materialism to an analysis of British capitalism. This is because, for himalso, decline is perceived as the product of something external to the

capital-labour production relation. The external factor being the

hegemonic stranglehold that commercial money capital has held since at

least as far back as the restoration of the Monarchy in 1688. In this latter

period commercial capital bailed out the State; constituted the Bank of

England in its own interests; and, through the nexus of City-Treasury links,

systematically sacrificed the interests of capitalism proper (productive

capital) to the more lucrative commercial laundering of money via the

matrix of 'Bills of Exchange' on the world market. As Ingham explains in

a quite sophisticated manner, commercial capital ruled in this way

throughout the 18th and 19th century and continues to do so in the 20th

century, predominantly through the euro-money markets established postworld war two. There cannot be many Marxists that doubt this is the case.

The essential question is why? This is what Ingham fails to explain

adequately.

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7 Quotes and claims are to be found in Anderson's, "Origins of the Present Crisis", New

Left Review, No23 Jan-Feb 1964, pp 49-53.


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The important point here is that Ingham ignores the more substantial

source of decline in the social form of production. In doing so he ignores

the valorisation process. The result of this omission is critical because

production from then on in becomes a material technical arena for the

production of use-values. In turn the essential relation between Capital

and Labour becomes displaced as a class struggle over the finished

product; and the 'money form', so central to Ingham's analysis, loses its

conceptual weight and owes more to Weber and neoclassical economics

than Marx. Given this, it is little wonder Ingham views historical

materialism as being economic determinism and so of little use in

understanding the trajectory of British capitalist social relations. This

leaves him only one recourse: an empirically based historical explanation.

Ingham proceeds to glean, from a historical enquiry of British capitalism,

that financial concerns appear to be consistently at the expense of

productive capitalism; that the state bureaucratic institutions have a

separate rational calculating relation which fosters the practice of 'sound

money" and so inadvertently promotes financial interests; and from this that'Capitalism Divided' is the source of decline and not the Capital-Labour

value relation. As Longstreth (1979) has pointed out, if the sterling lobby

or the Treasury dominated economic policy, it was because there was no

serious opposition to the policies they put forward and not because the

triad of City-Treasury-Bank of England forced their interests upon the

policy makers. Longstreth pointed out in 1979 that the picture of banking

capital forcing through policy measures 'in the teeth of strident opposition

is indeed a false one'. If it was false in 1979 it is certainly false today after

15 years of Thatcherism wherein the CBI has remained muted, offering in

some cases encouragement from the sidelines, whilst the devalorisation of

the British economy deepened. In other words industrial capital has also

had an interest in deciding the trajectory British capitalist social relationshave taken. The essential questions then became: What is the nature of that

interest? Why did it manifest? And, how has it developed?

A number of other studies appear to take a similar route. For example, the

extensive work by H. Overbeek (1990). In Overbeek's case the

'divide-equals-decline' syndrome takes on different aspects. It becomes

one between 'concepts of control', namely: the 'money concept' versus the

'productive concept' and how each in turn strive for control of the state and

the nation's economic course of development. The study offers a useful

empirical and historical overview of the development of British Capital and

decline. Unfortunately in no manner of understanding can it be classed a

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Marxist offering, for it too neglects the Capital-Labour conflict in favour of

the well worn Capital-Capital conflict.

All these theories have singularly failed to answer the fundamental

question: what exactly is it about capitalism that is in decline? Instead the

tendency has been to jump immediately to phenomena which lie outside

capitalist production; for example, within the circulation of capital (see G.

Ingham 1984), or, in the so called 'superstructure' (see P. Anderson 1964,

1987). Decline theses soon become engrossed in the measurement of a

phenomena Marxists have singularly failed to get to the heart of. In this

respect analysis, unable to penetrate deeper into the social form of

production, becomes entranced with comparative studies of decline

between Britain and other western capitalist nations. Inadequate theory,

of course, soon leads to reactionary practice as some Marxists, bereft of a

grounding in Marxist categories, align themselves with

'De-industrialisation' theory. They then proceed to support bourgeois

policy designed to curb Britain's 'De-industrialisation' by controlling 'the

city of London' and so place 'Britain' back on the rails of an 'ideal-typicalcapitalism' such as Germany.

This has a highly debilitating effect on Marxism's approach to the political

economy of the Thatcher years. The essential problem here is that Marx's

categories such as 'abstract labour', 'value', 'fixed' and 'circulating' capital

have either been ignored, seen as a 'Hegelian detour', of no relevance to

the 20th century, or else reified into a quantitative 'law of value'; seen as a

useful analytical tool, or else as a backdrop to 'crisis theory". The 'law* of

value then arises intact and phoenix like from the ashes of every capitalist

crisis.

This failure to make use of Marx's central categories in the spirit with which

he himself made use of them, has had one result: the Marxist understanding

of so called 'Thatcherism' has had to make do with that vacuous category'Post-Fordism'. How else is one to speak of a category which is so

ambiguous and devoid of class content that it can be used to 'prove' two

entirely opposite theses? For example, for some 'Post-Fordism' bears

witness' to the rejuvenating ability of capitalism (S. Hall, 1990); for others

'Post-Fordism' is the product of capitalism in decline (H. Overbeek, 1990)!

An explanatory category that cannot distinguish whether an entity such as

capitalism is flourishing or decaying is of little use to Marxists wishing to

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come to terms with the so called 'Thatcher era'. The most fruitful route is

that taken by 'decline' theorists, yet they either leave out, or, just as bad,

reify the central categories of a Marxist explanation - abstract labour, value,

fixed and circulating capital, the formal and real subsumption of labour

etc... In the third section of this article I bring these categories back to

centre stage of enquiry and use them to analyze capitalist decline in Britain.

By doing so I lay the basis for a Marxist understanding of the present epoch

(so called 'Thatcherism'). Before this, section two will briefly outline the

essence of Marx's 'value theory of labour'.

2: THE DIALECTICAL GENESIS OF CAPITALIST DECLINE

THE CONTRADICTION WITHIN LABOUR (OBJECTIVE

COMMODITY FETISHISM)

For Marx an acknowledgement of 'The two-fold character of labour' was

pivotal for a 'clear comprehension' of capitalism. As capitalism is still with

us, albeit in a seriously sclerotic form, then any Marxist notions of capitalist

decay must expose the development and decay of this two-fold character.

Indeed, as will be made clear, the contradiction within labour and its

dialectical process of a development and decay are the roots out of which

firstly Labourism and then Thatcherism grew. It therefore, becomes vital

to the flow of the argument here that we briefly emphasise the essential

aspects of Marx's 'value theory of labour'. As will become clear, it is

primarily an ontological statement about the contradiction between the

forms of labour in capitalism - on the one hand, concrete, useful, need

satisfying labour; on the other hand, abstract, value creating labour. After

detailing this contradiction, we then link its development tendencies to its

highest form of expression - 'money capital' and the accumulation process.

In doing so, the contradictions internal to capitalism, which negates the

contradiction within labour will be all the more clearly exposed (to bedeveloped in section 3). Also in section 3 a tentative 'dialectical history of

capitalist decay in Britain' will be offered concerning the effects that the

negation of the contradiction within labour has had on the formation of the

8 K. Marx, Capital Vol 1, p 49, Lawrence and Wishart, 1983.

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working class and the ruling class in Britain. Firstly, then, a brief outline of

Marx's 'value theory of labour'.

As stressed above, the value theory of labour Marx offers is primarily an

ontological statement concerning the essential social production relations

endured within capitalism. In capitalist society labour is divorced from the

means of production and must sell only its own labour power, which now

stands opposed to it in the form of capital. This simple fact has important

ramifications, for, if one considers that it is through productive activity that

labourers are associated, then it is obvious that divorcing labour from the

means of production atomises every individual labourer, one from another.

Additionally, the owners and controllers of capital also stand atomised

from each other. Therefore, all become commodity owners.The above form is the basis of the contradiction within labour: as individuals

with use value needs and 'bearers of the exchange value producing process'.

For example, labourers own their own capacity to labour, a useful activity

which must become an exchange value creating activity if the capacity is to

be realised. Capitalists, having realised labour's capacity by exchanging itfor a wage and uniting it with the means of production, are also commodity

owners of many potential use-values at the end of the production process.

However, like the worker's labour power, commodities remain only

potential use values until they are exchanged. In this way the capitalist too

is the bearer of a particular part of the universal value relation. Clearly,

the 'ideal' for capitalism is to have no directly social production relation

between individuals (whether intra or inter class). Social relations outwith,

such as feudal, are crushed under the 'juggernaut of expanding capital', to

paraphrase Marx; until individuals are of necessity mediated by exchange atevery turn. It is at this point that one has the ontological basis for the riseof the value form and its dominance over society. Stated simply, capitalist

society ,as an organic whole, expends and distributes social labour, howeverits essential social relations atomise individuals. This ontological fact poses

the real ontological problem of how individual private concrete labour

(whether it is the worker offering his commodity labour power or the

capitalist with a factory full of potential use-values worked up by concrete

labour) is to be socially sanctioned in such a manner as to reveal its

expenditure and distribution as socially necessary.

Clearly it is through market exchange of commodities and so the 'price

mechanism', that this ontological problem is resolved. For Marx,

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commodity exchange, as its hold deepened on society, was, stripped of all

unessential content becomes nothing other than the social process between

individuals which has reduced their holdings of concrete private labour

to abstract social labour. This social valuation of private labour is achieved

through the exchange of commodities. In this manner, as Marx remarked

constantly, our social relations take the form of things because things take

the social form of value relations. As our social exchange relations develop

so too does the expression of value, and as such, abstract labour. Eventually

the social practice of abstracting value creating labour develops out of itself

a universal equivalent: money gold and, at a more concrete level, the world

currencies that at different periods of capitalism's history act 'as good as

gold', namely: Sterling and latterly the Dollar in a more brutalised form.

The point is the universal equivalent is universal because it is an active

reflection of capitalism's growing potential to realise its ideal of totally

atomising individuals as mere commodities and so functions of capital

expansion. This is why the universal equivalent, or, 'money capital' is the

value relations most developed form. As such it is abstract social labour'smost attainable bodily form. In effect, it is the material realisation of the

contradiction within labour; the material embodiment of a social relation.

One side of the contradiction - abstract universal labour in the value or

money capital form - allows the other side of the contradiction - concrete

individual labour - and every other particular commodity, to express their

exchange value and the value relation between people more adequately. It

is a situation wherein the particular expresses its existence as a universal.

Following this, the changes taking place in production, namely, increases

in productivity, leading to less socially necessary labour time; become

transmitted via the exchange of commodities for money, which, as abstract

social labour, is the bodily form of value and as such reveals to the

commodity its new value. It is this social ontology which the more concreteprice mechanism of supply and demand reflect. The whole drive behind

such social relations of course evolves out of the capitalist's need to extract

a surplus from labour. This brief excursion into the basic ontology of Marx's

Labour Theory of Values leaves one with these initial conclusions: the

contradiction within labour is that between concrete useful labour and

abstract labour; abstract labour is the basis of value and value is the basis

of 'money capital'.

The above describes capital's 'ideal', it is also clear that a Marxist

understanding of capitalism in decay must encapsulate that process

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whereby the dual nature of labour begins to disintegrate along with the

contradiction between use and exchange value. In as much as this is the

case, decay is a positive progressive category to use, because it explains how,

with the demise of abstract social labour, concrete social labour, orientated

toward useful needs, eventually dominates productive intercourse between

people. Below we develop our understanding of the process of decay by

considering 'money capital' the general form of capital and as such the

highest manifestation of capital as circulation capital. Specifically, we

develop an understanding of the contradictions which build up as capital,

in order to expand value, has to assume particular forms which become

increasingly alien to it. The alien forms spoken of are fixed capital and

eventually even its life blood - variable capital. The latter is the real source

of capitalist decay.

2.1 CAPITAL'S INTERNAL CONTRADICTIONS: THE PROCESS OF

DECAY

Below the word 'decay* refers to the decay of the contradiction within

labour mentioned above and expresses two meanings, the one negative the

other positive. On the one hand it refers to a negative decomposition of

labour's dual nature: negative in the sense that, without communism the

concrete, use value, need fulfilling character of labour becomes

decomposed, or, bureaucratised (the example of health care provision

these past decades being a case in point). On the other hand, it refers to

the more positive Latin meaning 'decadere', or, literally, 'falling away*; in

this case it is positive decay and signifies the 'falling away" of the alienating

character of labour - its value creating abstract side. This, then, is the dual

meaning of decay emphasised here. To provide a detailed account of this

process is beyond the scope of this article. At this point I wish no more

than to intimate how capitalist decay is generated by the contradictioninternal to the capitalist accumulation process.

A theory of capitalist decay must start from the recognition that capital

must of necessity accumulate surplus value in order to survive. We know

from the above that value's substance is abstract labour and that abstract

labour, the product of the value relation between Capital and Labour, takes

as its highest material form money capital. Money capital is the highest

material form because it best reflects capital's essence as being above all

circulating capital. Hence here we refer to circulation in its widest sense

covering production, exchange and distribution of value. Capital, in order

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competition to increase the rate of exploitation. This compulsion saw the

movement toward the creation of a labour process more in keeping with

capital's value expanding essence. That is, it saw the movement towards a

labour process occupied by increasingly abstract homogeneous labour; a

'labour' more adequate to capital because more adaptable to a speedy

circulation through the labour process.

The attempt to reduce labour craft fixity and control over the flow of

production (the latent abstraction of labour in production) leads to the

simultaneous growth of capital's fixity in the production process, in the

material form of concentrated machinery (fixed capital). So, the drive to

accumulate, compels the capitalist system to increase the abstraction of

labour, but in the process this requires a greater level of fixity on capital's

part; a fixity which hinders capital's ability to circulate and accumulate!

This process may increase the mass and rate of profit, but it also heralds a

vicious spiral of decline for capitalism. Capitalism begins to 'dig its own

grave' due to the fact that the same process foists upon capital another, all

consuming, contradiction - an increasingly socialised labour whichthreatens to negate its value form of existence as abstract labour.

It is this contradiction which is embedded within the heart of capitalism.

On the one hand, in order to expand, capital has of necessity to reduce the

fixity of craft type labour and expand the proportions of its form as fixed

capital. As such capital is compelled to expand in a form which can only

circulate value in slow seepages over many turnovers. Exactly how many

turnovers will depend on the size of fixed capital, a particular capital's

position in the commodity market and capital's ability to control an

increasingly socialised workforce. On the other hand capital has to reduce

all the fixity building up within the production process to socially necessary

abstract labour, by dissolving itself once more into its general money capital

form. It must do this if value is to circulate and realise the expansionoccurring in the production process. The contradiction is an acute one for

the capitalist class. As Marx noted:

13 See appendix concerning the category of socialised labour.

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As long as it is tied up in the process of production, it is incapable

of circulation, and hence is virtually devalued. As long as it is

tied up in circulation, it is incapable of production, posits no

surplus value, is not capital in process.

As Marx implies in the above quote, and building on what has been

suggested above, any 'bottle necks' in the production sphere must act as a

drag on capitalist circulation and, as such, act as an effective devaluation

of capital.

This contradiction becomes more critical when one bears in mind two

interrelated facts which interweave with the above problems for capitalism.

Firstly, fixed capital is prone to increasing rates ofmoral depreciation of

the value imparted to commodities due to the intensity of competitive

accumulation between capitals. Because of this, productive time becomes

of the essence. This fact intensifies the imperative for production, as

valorisation process, to occur as smoothly and as quickly as possible.

Secondly, we have the major obstacle to this endeavour because higher

levels of fixed capital bring on to the historical stage a higher concentrationof directly socially combined living labour, which, increasingly, through

emerging economic and political organisation, act as a barrier to capital's

exploitation of labour and so a barrier to the smooth efficient use of fixed

capital.

As the degree of fixed forms of capital develop, both moral depreciation of

capital and increased socialisation of labour develop the contradictions

within the capital value relation. Eventually, for the larger dominant

capitals which emerge in each industry, the atmosphere in the production

process becomes unconducive to the risking of large amounts of money

capital in large scale investments of fixed capital. This becomes the case

whether the investment is by private capitalist or joint stock companies.

To briefly recapitulate, I have argued that, due to the competitivecompulsion to expand value, capital must increasingly forgo its essential

14 MECW No 29, op.cit., p 9.

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production can recommence, relatively safe in the knowledge that the

socialised labour which emerges to negate capitalism, becomes

transformed and re-atomised via a bureaucratic regulation of labour in both

an economic and political sense. However even if this solution works, it

does so only initially, for it is at great cost to capital in general. It allows

workers institutional links with the state, through which rank and file

struggle can be channelled to great effect. It also means the beginning of

a bureaucratic regulation of abstract labour formation which seriously

restricts the valorisation process. Looking ahead slightly we can say this

potential negative effect for capital did actualise itself in Britain throughout

the 1960s and 1970s, when profit rates declined and worker militancy

became a major problem for the ruling class.

The potential bureaucratic solution has of course realised itself in the

historical process. It is what has often been referred to as 'Labourism'.

Traditionally, one only refers to 'Labourism' as a political phenomenon

with contradictory 'Left' and 'Right' political manifestations. The

argument here, however, is that it must be given further recognition as asocio-economic production category which bureaucratically regulates and

atomises the labour process and in so doing allows the further latent

abstraction of labour. In section 3 below a preliminary outline is given of

the historical dialectic of this process in Britain. After which a preliminary

contribution to a political economy of so called 'Thatcherism' will be given.

3: THE HISTORY AND DIALECTICS OF CAPITALIST DECAY IN

BRITAIN

We become historically dialectic and so more concrete specific by taking

the above genetical treatment of capitalism and its emergent decaying

forms and relating them to a specific capitalist entity, in our case Britain.

With regard to Britain, the further expansion of capital from the late 19thcentury onward served to develop the contradiction within labour to the

point where it began to decay. That is, capitalist expansion served to

develop the socialisation of labour in its drive to create every commodity

on the basis of abstract socially necessary labour. This emergence of

socialised labour heralded the point of dissolution of commodity fetishism,

ie, that contradiction within labour between its useful form and its value

form of existence. Empirically this revealed itself in the labour movement's

growing clamour for the social regulation of their own labour and

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productive forces. Some of the dominant ideologies workers became

drawn to, as their capacity to socialise grew, were 'Ricardian Socialism',

'Municipal Socialism' and 'Syndicalism'. It was through these versions of

'socialism' that workers began to organise and advance their political

demands for socialism.

The grip of an emerging finance capital over and above domestic

productive capital in Britain also revealed itself in this late 19th century

early 20th century period. It can be said to mirror the polar grip that

militancy and socialism was having on dominant sections of the labour

movement. History shows that finance capital in Britain emerges from the

fragmented country banking system and quite rapidly (approximately

between 1870 to 1920) centralises and concentrates its holding of money

capital in the 'City of London'. Finance capital does this to escape the

parochial and restrictive connection with industry. At first finance capital's

predominant form is imperialism, or, corporate finance capital. That is to

say, finance capital, through the 'City* orients itself as world capital along

the lines of the fusion of banking and industry outlined by Hilferding, andlater, Lenin. Its other, higher, development - parasitical capital - is held in

check in this period, by the imperialist mode. More specifically, the

clearing banks were increasingly drawn into the web of commercial money

laundering and the short-termist philosophy of merchant banking. Drawn

in, it should be noted, by the Bank of England and Treasury. Below is an

attempt to flesh out the process a little more, by, very briefly, itemising,

firstly, some occurrences which suggest labour's growing strength and

secondly, some occurrences which suggest capital's waning powers.

3.1: ASPECTS OF AN EMERGENT COLLECTIVE LABOUR

MOVEMENT

In the first two decades of the 20th century independent working classcollectivity reached new heights which have never been attained since.

Syndicalist ideas of socialism had gripped the most politically advanced

sections of labour. The main thrust of its practical politics was that trade

unions were to become the vehicle for achieving socialism and the General

Strike was to be the main weapon in the trade union arsenal. The militant

sections of collective labour were concentrated in Coalmining, Docks and

Railway industries. Throughout this period, especially 1910-14, strike

waves deepened and often brought whole cities to a standstill. The state

had increasingly to resort to sending in police and troops in an attempt to

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regain control; this was the case in, for example, Hull, Manchester, Salford,

Liverpool and Glasgow.

The period 1910 to 1921 saw the development of worker 'trades councils'

and 'cooperatives', alongside the development of 'councils of action'

throughout the country, which were responsible, among other things, for

the 'Hands Off Soviet Workers' campaign. Also in this period, the

increasing tendency of trade unions from different sectors of the labour

process to act together, irrespective of craft division, began to reveal itself.

As the Minister of Labour lamented in 1920.

What is called 'class consciousness' is obliterating the distinction

between those who follow different occupations. 7

In this period the rank and file workers' movement was still, in large

measure, autonomous from the rigid policing role of trade union

bureaucrat, who, particularly during the first world war, was seen as an

accomplice to state inspired working class oppression. According to the

British labour historian J. E. Cronin, it was this period when 'technical,

social and economic processes' were at work combining to internallyhomogenise the working class and cause it to be 'less sharply divided within

itself. Increases in the numbers of unskilled and semi-skilled workers

was the objective basis upon which political collectivity began to be formed.

Within the cities a distinct working class culture was emerging, which

allowed the point of production struggles to spill over into political struggle.

Cronin again notes how

16 For a concise empirical history of the conflict between capital and labour in Britain see

J. Sheldrake, Industrial Relations and Politics in Britain 1880-1989, Pinter

Publishers, 1991.

17 The Minister of Labour 1920 was cited by J. Cronin in his, Labour and Society in

Britain 1918-1979, p 22, Batsford, 1984.

18 Ibid., p 27.

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The militancy of 1917-20 transcended the issues of wages, prices

and dillusion and even war itself. It was, more than any previous

or subsequent unrest, a mobilisation of the working class as a

class and of their institutions and neighbourhoods.

There is a tendency to scoff at such optimism that the working class in

Britain were acting as a class, on the grounds that this optimism is born ofan 'economistic' outlook. To some degree this may be justified, however,

this attitude overstates the scepticism. It does so because the holder by and

large looks at this period of British worker struggle through the distorting

prism of Stalinism and Labourism and, as such, the hold these categories

have exerted on worker politics. What we must not forget is that Stalinism

had not yet developed and Labourism had still to gain a central place in the

re-atomisation of the growing worker collectivities and had yet to stratify

them into bourgeois collective bargaining groups.

Labour history is of course, full of such anecdotal evidence as that supplied

above. What it has singularly failed to do is place the growing worker's

movements within a theory of capitalism's decaying forms. The groundwork for the surge in labour collectivity alluded to above had been laid in

the last quarter of the 19th century. From 1873 to 1896, in the face of

declining prices, real wage increases were successfully rested from capital.

In the same period profits went into a spiral of decline.20 Workers began

to assert their political economy over and above that of capital: increasing

use value acquisition and needs were to take precedence over surplus value

creation. In effect the situation was one where workers increased their

standard of living, whilst capital, unable to cope with an increasingly

socialised workforce, had to accept the profit losses and begin its flight into

finance capital.

Of course there was counter offensives by capital, from the turn of the

century until 1914 real wages declined, but, one must stress, only at the cost

19 Ibid., p 31.20 See any number of economic history textbooks for this evidence. For example, A. E.

Musson, The Growth of British Industry, pp 149-166, Batsford Academic, 1978.

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of inflationary price rises. The latter being no less than the outcome of the

pitched battle between labour and capital in this period. Objectively the

battle was being won by labour, empirically this can be gauged by the

massive decline in fixed capital formation, as capital reverted to its essential

circulatory form. Feinstein 1points out that in the period 1873-1913

productivity growth in Britain slowed to an average of 1% per year, whilst

the USA, Germany and other developed capitalist economies exhibited

averages of up to 2%. Fixed capital installation was older and less

advanced, new industries were slower to develop and managerial strategies

to control labour were lacking. The essential but simple fact was, capital

was losing control over an increasingly collective labour. Throughout this

period and until the late 1920s, the ruling class were in disarray, especially

so when the influence of the Bolshevik revolution made its impact on the

working class. Bentley captures the atmosphere in the ruling class camp in

this period when he remarks how

The socialism which Lloyd George confronted after 1918

seemed to him something harder and colder...In thecountry hespoke not of socialism but of bolshevism (and) he wrote of 'the

great struggle which is to come'.22

Until the Fabian/Labour Party and the TUC could effectively join forces

with Conservative social chauvinists such as Chamberlain, to ensure a

bureaucratic atomisation of the emerging socialised working class, it was

the likes of Syndicalists, such as Tom Mann, who inspired the worker's

movement politically. As a ruling class counter-weight it was the

'Anti-Socialist Movement', the 'Economic League' ideologues who

inspired the capitalist counter-offensives. Up until that watershed in

British working class formation, the 1926 general strike, the Labour Party

and TUC, despite the state's careful nurturing, were essentially still on the

21 See C. H. Feinstein's, "Slowing down and Falling Behind - Industrial Retardation in

Britain After 1870", in New Directions in Economic and Social History, Vol 2, Anne

Digby et al (eds), 1992.

22 M. Bentley, "The Liberal Response To Socialism", in, K. D. Brown, Essays in

Anti-Labour History, p 49, MacMillan, 1974.

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side lines with respect to any hegemonic control over the working class.

Therefore, in this period, on the one hand, we had Syndicalism striving to

breakdown the political divisions between workers. On the other hand, we

had a Labourism attempting to consolidate its reason for existence by

working flat out to deepen sectional divisions in the working class and

deepen the divisions between the British working class and international

labour via patriotism.

32: THE RISE OF FINANCE CAPITAL IN BRITAIN

In this section a brief consideration will be given to the developmental

tendencies towards a particular variant of finance capital in Britain. The

1870s to late 1920s was essentially a period of limbo for capitalism in Britain.

The objective conditions for a transition to socialism were effectively being

constructed, regardless of any subjective conclusions otherwise reached by

the actors involved. Finance capital is predicated upon this . That is,

finance capital emerges when the capitalist mode of production is in the

netherworld of decay. There are a number of aspects to the way in whichfinance capital in Britain reacted to this transition period, where the

contradiction within labour was being positively negated by an emerging

social and collectively conscious labour movement. We note here only

some of the essential ones.

As the contradiction developed between, on the one hand greater levels of

fixed capital formation and intensified moral depreciation of its value

holding capacity, and on the other hand the negation of commodity

fetishism, or, the contradiction within labour; the ruling elements within

capital ensured the easy passage for capital to revert to type, ie, circulation.

One notes in this respect the general trend away from capital's 'country

banking' base to the 'City of London* from the 1870s, which quickened to

a gallop as the century drew to a close. This was achieved primarily througha spate of mergers. By the early 1920s British finance capital had

consolidated a remote central banking system operating out of the 'City*

and had taken up full residence in the world of fictitious capital creation

(secondary share exchanging and short term money market discounting

etc). 'Over night' almost, the old 'country banking' network which 'lent

long* and encouraged a 'healthy* fusion with productive capital, had been

sublated by the growth of parasitic bank branches - the tentacles of finance

capital and main arteries through which circulatory capital could assert its

parasitic dominance of productive capital.

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Of course in the 'City* there had always been a number of avenues for capital

to realise a return. The two basic distinctions of parasitic activity were

between money market activity, which lent short to domestic productive

capital and long to foreign Governments and/or high labour intensive, low

wage, foreign, private industries. Within this configuration however,

commercial trading in currencies, bonds, secondary share issues and bill

discounting became ever more dominant. It is this latter faction of capital

which eventually became the central focal point for a capital reacting to the

loss of control over its productive base in the UK. The more the

contradiction within labour became negated and so the collective strength

of labour grew, the more deeply did this form of capital feel at home in its

abstract, fictitious world of M-Ml.

In its imperialist form, finance capital acted as world banker to all

developing countries. By exporting capital it was able to replenish itself on

the surplus value of other nation's labour. The problem was that the first

world war, caused by this imperialist expansion, served, firstly, to bankrupt

British finance capital (the celebrated foreign earnings of 4 billion by 1914dissolved to nothing); secondly, served to block the flow of capital abroad,

due to the restrictions imposed on foreign securities during and after the

war. Such potential for international restrictions on the flow of capital and

the growing class tensions within Britain, convinced the British ruling class

that they must attempt to create favourable internal conditions for the

return of inward capital investment. In other words finance capital had to

exert short term discipline upon itself by allowing the state to act in its long

run interests. The state as repository of finance capital's long term interests

then sought, firstly to contain, then to incorporate and control the labour

movement. The only lasting way to accomplish this was to firstly, crush the

syndicalist influence and secondly, foster the growth of reformist elements

within the Labour movement. From this point on the strategy of Britishfinance capital was to encourage and foster the growth of Labourism within

the ranks of the Labour movement. No one should doubt that finance

capital had the necessary institutional links to carry through this policy.

Apart from the 'Economic League' and organisations like it, one also has

the multitude of 'Employer Associations', the systematic interlocking of

directorships which knits the circuit of capital together and sublates it

under the influences of finance capital. On top of this one also has the

persona of finance capitalist influence within the state directing planning

committees, conciliatory procedures and controlling the Treasury Office

and Bank of England. As John Scott has pointed out, finance capitalists in

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Britain for the past century have been in effect the controlling power elite

out of a power bloc consisting of large scale industrial capitalists,

commercial and landed interests.

No doubt some historians may dispute the historical chronology or other

particulars of the above. Arguments have raged amongst economic

historians for years as to how one should characterise this period in British

economic history. For some it was a period of 'retardation', for others, a

period of 'restructuring' before the onset of the 'second industrial

revolution';others still, deny it as a period altogether, claiming it as simply

part of the natural evolutionary process that all mature 'industrial societies'

pass through. In this case Britain merely revealed to other nations a glimpse

of their own de-industrialising future. It would appear that no matter how

much one pours over the empirical data, there will always be those who will

dispute your findings. It seems to me that what has been most needed is a

theoretical basis upon which to investigate/understand the surplus of

empirical data collected on the economic history of Britain in the period

1870-1930.In applying Marxist categories this much has become clear: the emergence

of finance capital occurred in Britain around the 1870s onward; predicated

upon a temporarily defeated productive capital that could no longer secure

control over workers to guarantee an efficient rate of accumulation. As the

decades of the late 19th century gave way to the early 20th century,

commodity fetishism, based on the contradiction within labour, began to

break down. Objectively, then, the special interest given this period by

historians is warranted, for it is the period which heralds the beginnings of

the negation of capitalism.

In essence the period can be characterised as that period in British

capitalism when the two poles of the commodity mode of production were

becoming wrenched apart. On the one hand, an increasingly organised

23 See his book, Who Rules Britain?, Polity Press, 1991. M. Useem, The Inner Circle,

OUP, 1984, also describes how an "inner circle" (finance capitalists) have dictated the

political agenda.

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labour movement was advancing to assert the preeminence of useful

production and need; on the other hand, a retreating finance capital was

holding on to its fetishised value creating world via a parasitic

'money-go-round' called the 'City of London'. The intensification of this

contradiction threatened the existence of commodity production. In this

respect the emergence of Labourism was no accident.

33: THE EMERGENCE OF LABOURISM

Labourism can be said to be the development, within a decaying capitalist

formation, of a new political economic category. Politically it sought to heal

the rift between finance capital (the value form) with Labour (use value and

need) via 'corporate compromise' at the level of the State. Specifically,

Labour was to be given bureaucratically regulated use value provision

through the construction of the welfare state. This was at great cost to

capital, but was the only way of establishing the rule of the policemen of the

labour movement - the TUC and Labour Party Bureaucracy. Alan Fox,

like the majority of 'industrial relations' experts, views this period as theconsolidation and integration of 'collective bargaining'. Whatever one

chooses to call it he is surely correct when commenting thus about its

substantive purpose

...when British ruling groups admitted to a recognised foothold

in decision making such organisations as demonstrated their

readiness to pursue their ends within established constitutional

structures, they thereby creatednew allies in the defence of those

structures.

The 'new allies' were the Labour Party and the TUC, and 'those structures'

refer to the growing society wide network of collective bargaining controls

over labour. Taken as a whole it constitutes Labourism. Industrial

relations theory never does get to the bottom of 'collective bargaining', aMarxist approach can.

24 Alan Fox, History and Heritage, George Allen and Unwin, 1985

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Even more important was Labourism's economic/social dimension,

because this was the basis for collective bargaining. Labourism can be said

to be a social category which develops out of the decaying forms of

capitalism. Its fundamental task being to act as a surrogate form of

abstracting labour in production. As such, it bolstered the ailing value

form's role in abstracting labour. By this it should be clear that it does not

make value formation any more efficient, in fact quite the opposite; its chief

purpose is to prolong the life of an ailing social relation. If we remember,

the capitalist value form of labour abstraction brings with it an emerging

socialised labour, this is one reason why Marx could say that capitalism 'digs

its own grave'. The task of Labourism was to reverse this socialisation of

labour via bureaucratic rules and procedures both in the labour process

and wider society and state. In this way capital found the means for a

reinvestment strategy in Britain from the late 1920s onward. Unlike the

'Fordist regulation' theory however this process is not evidence of

capitalism's health, but rather, in line with the argument here, evidence of

its decay.One can point to many examples of the growth of this social category. One

notes, as already mentioned above, the growing theory and practice of

'Industrial Relations'. This fetishistic preoccupation with a 'scientific'

enquiry into 'employee/employer' relations has an inverse relation with the

fortunes of capital, ie, as capitalism decays the academic industrial relations

'industry1 thrives! From as early as 1868 and the Royal Commission on

Trade Unions, there developed a labourist clique of reformers, full time

trades union officials, employer associations. The gruesome combination

of Fabian bureaucracy and right wing social chauvinism, became the

bedrock upon which a philosophy of consensus industrial relations could

emerge. The Whitley Committee created in 1916 was the first national

vehicle for the institutionalisation of Labourism within the labour process.From another angle, one can observe the importance of the merging

conscious application of labour process strategies in the face of a declining

commodity fetishism. This was particularly so in areas of industry where

the reserve army of labour had 'dried up' and an internal bureaucratic

regulation of the flow of labour to the needs of capital, had become the

norm. Direct forms of labour control which shadowed the abstraction of

labour achieved by capitalism, such as 'Taylorism' were introduced (and

increasingly so after 1931). Along with 'Taylorism' other labour process

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controls became dominant such as 'human relations theory*. This offered

a more 'responsive autonomy* method of control, according to Friedman.

Of course at the concrete level of British class struggle the Labourist

incorporation of the working class was to be a protracted affair. In

particular, its 'left' face had to be hammered out on the anvil of class

struggle over many decades. Indeed it was not until the massive waves of

labour unrest, which swept through Britain from the late 19th century to

the 1920s, were finally defeated, culminating in the General Strike of 1926,

that Labourism could take its place with any real success at the head of a

depoliticised labour movement. In this respect two important

phenomenon occur; firstly, it was only after 1926 that the Labour Party and

TUC took firmer root in the social fabric of capitalism. Secondly, the

successful depoliticisation of the working class heralded the break from the

gold standard in 1931. As such it heralded a new era of capital and state

investment on the basis of cheap money. More importantly it heralded the

decay of a 'universal equivalent form' for capital, this itself the reflection of

the deeper chasm developing within the form of labour.This strategic retreat of parasitic finance capital was made more palatable

by the opening of the 'sterling area'; a corridor which insulated sterling from

the dollar's world hegemonic position as a surrogate universal equivalent

abstract labour representative. Throughout the 'corridor', parasitic capital

could repatriate surplus value, generated in the colonies Britain controlled,

back to the 'City of London' for speculatory purposes. Meanwhile, with

Labourism in place, the conditions for the 'corporate' side of British finance

capital to reinvest in the domestic economy had been created. However

the tension within capitalism to revert to its parasitic form and the ability

of labour to counteract the bureaucratic mechanisms of Labourism such as

collective bargaining, has meant that from 1929 to 1979 any moves towards

the 'corporate' containment of either finance capital and labour couldnever develop. It is this schizophrenia of British finance capital which has

characterised what in hindsight came to be seen as the consensus years and

25 A. L. Friedman, Industry and Labour - Class Struggles At Work and Monopoly

Capitalism, p 69, MacMillan Press, 1977.

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what I have referred to as the labourist bureaucratic control of the labour

process. The period was to stretch from 1931 to approximately 1973. There

are those on the left who have described this area as a peculiar kind of half

hearted attempt at 'Fordist production regimes'. I have argued here that

this 'Fordism' can be best understood as a social category which emerged

to contain workers - Labourism. The reason as to why it was such a

contradictory affair, or, 'half hearted', is wholly to do with the peculiar

schizophrenic nature of British finance capital. On the one hand it has

exhibited spasmodically its 'Hilferding type' form (note the corporate

financial structure of Germany); whilst on the other hand it has been

systematically pulled awry by its highest parasitic form via speculative

activity in world money markets. A full appraisal of this must be the subject

of another work. The point to be stressed here is that Labourism emerged

to dominance in the late 1920s and became consolidated by the events of

the post 1945 world order. It eventually began to wane, firstly, under its

own internal contradictions. The chief contradiction was that working class

rank and file organisations, bolstered by the promise of full employment,threatened the existence of Labourism. A second contradiction was the

world capitalist slump, which began to assert itself in the late 1960s - early

1970s and brought an end to a rate of profit which could afford such a

compromised value relation. It was out of the ashes of Labourism that so

called 'Thatcherism' emerged.

3.4: 'THATCHERISM'

The waves of growing working class militancy throughout the late 1960s and

most of the 1970s are evidence of, by this time, an increasingly socialised

production process facing a capitalist class increasingly bereft of its

labourist support. Faced with a world slump, the costly bureaucratic

compromise between labour and capital simply had to be removed. Nomatter the degree of apparent pragmatism at work in this period, the logic

was clear: Labourism hindered valorisation; could no longer control the

working class, therefore Labourism had to be removed! However, removed

under conditions as favourable as was possible to a decaying capitalism.

The Thatcherite ruling class faction's onslaught post 1979 was no

'hegemonic victory. In its essence it was a set of pragmatic policies

designed to carve out a breathing space for capitalism in the hope that, with

the demise of Stalinism in the East, fortunes may change. In the short term

the so called Thatcher 'strategy* was simply to break up the bureaucratic

restrictions on valorisation, whilst also breaking up any socialising

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as 50%. In the capitalist sector gross domestic capital formation fell by

33% between 1979-83.27 The money form has been used to dissolve the

bureaucratic association that had ossified into the social fabric in the

decades of Labourist dominance around the production of needs. This was

done by imposing 'cash limits' on the public sector; and imposing 'merit

pay' wage rises, awarded to workers on an individual basis. These

particular strategies served to break the material basis of Labourism. In

effect it left the mechanism of control such as collective bargaining in tact,

but without any context. Basically, collective bargaining has been 'hollowed

out' - only the framework survives, buttressed by so called 'Human

Resource Management' goals (we return to this briefly below).

Secondly, the breaking up of large production units in the name of 'Post

Fordism' and its derivative 'just-in-time production' occurred. In 1973-4

there were some 1018 workplaces employing a labour force of over one

thousand; by 1982-3 this figure had almost halved to 5S9.28 This particular

strategy, as well as facilitating the break up of socialised labour and allowing

abetter environment for the intensification of abstracting labour, (tendencytowards the flexible worker, just-in-time production, labour

surveillance..etc); also served another important purpose. It served to shift

the burden that unproductive labour was exerting on profitability from the

stronger capitalist to the weak. Thirdly, a collection of so-called

'supply-side' policies designed to recommodify the labour process. The

chief policy being to whip the labour movement back into line by creating

a large scale reserve army of unemployed. By the early 1980s that arch

representative of capitalist interests, Nicholas Ridley, could assure his pay

masters that "the high level of unemployment is evidence of the progress

we are making". One Employment Act after another has sought to

27 Ibid.

28 Business Monitor 1974 and 1985, cited in, A. Callinicos and C. Harman, The Changing

Working Class,p 57, 1987.

29 Quote taken from J. Eldridge et al, Industrial Sociology and Economic Crisis,p 32,1991.

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nature. Of course, as Clarke observes, the Utopias of Post-Fordism and

'flexible specialisation' have no vision and 'serve to rationalise the

complacent self-satisfaction of a small stratum trying to invent for itself an

historical role'.31Nevertheless, it is incumbent on Marxists to extract from

this mishmash the 'rational kernel' within.

The Thatcherite project to re-commodify workers has had very limited

success. The main purpose was an impossible one to achieve the

re-establishment of capitalism in its prime. For all the attempts to control

labour via the re-imposition of the commodity form in workplace relations,

there has been little capitalist regeneration of the economy. Capital has

refused to invest on the scale required and so most of any increase in

valorisation rates have come solely from the intensification of work. As the

scale of de-industrialisation suggests, the relations of production stand

opposed to the forces of production. Without the re-invigoration of the

value form 'marketisation' of the public sector has been a bureaucratic

sham. State regulation of such hybrids as British Gas, and the different

'Water Companies'...etc and 'contracting out' of Health and Educationprovision, has simply lead, contrary to ideology, to greater state regulation

than ever before. The deregulation of finance capital has further retarded

any attempts to re-commodify production relations in Britain. In the past

15 years the pace of the flight of capital away from Britain surprised many.

With its favoured long term options in Eastern Europe turning sour, its

parasitic presence can only increase and increase the de-industrialisation

trend in Britain. As for the changes that have confronted workers in the

workplace, these too are fraught with long term difficulties for the ruling

class of Britain. As Gough has explained, the high degree of interrelation

of abstract workers implied by the fetishised forms of flexible functionalism

and just-in-time-producing..etc, create the ground upon which the future

strength of the working class can be built. In the sense that the processintegrates workers across skill boundaries, whilst creating inflexibility for

capital, especially with the commitment to 'core' worker status. A future

article will deal with the contradictions of Thatcherism in some detail. The

task here was to put in place the foundations of an understanding that

31 Simon Clarke, ibid., p 28

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stretches beyond the particular time period of Thatcherism' and situate it

within a general theory of the decay of capitalist social relations of

production in Britain.

CONCLUSION

This article has claimed that Marxists up to date have singularly failed toprovide a political economy of what has, for convenience, been called

Thatcherism'. It was pointed out that 'Post-Fordism' and 'Capitalist

Decline' theses were inadequate to the task. The former because it was

merely a Weberian 'ideal-type' concept held together by an eclectic series

of empirical observations of conjunctural economic and social trends. The

latter because it was ill-conceived, dealing only with intra capitalist

struggle as a reason for decline. Nevertheless, as pointed out earlier, the

concept of capitalist decline held out most promise in our quest to

understand both 'Labourism' and 'Thatcherism'. As it stood however the

category of decline had to be strengthened if it was to bear the weight of

explanation assigned to it. This article has attempted to do this bytransforming it into a category of capitalist decay. The decay, it was argued,

resided in the contradiction within labour. Specifically, it was pointed out

that decay referred to the falling away of labour's value form (abstract

labour), or, rather, its negation into social collective labour. The drive for

this transition rested with capital's insatiable desire to expand itself. In the

process of expansion we described how contradictions emerge for capital;

chiefly, increasing levels of fixed capital in a climate of increasing moral

depreciation of capital and an increasingly collective and organised labour

movement. As argued it is at this juncture that capital reverts to type, ie,

circulation, and finance capital emerges. Labourism, it was argued,

develops as a social category in capitalist decline, its functions being to

rescue the labour process for a recalcitrant finance capital by re-atomisingthe socialised worker thus allowing capital to continue the valorisation of

labour power. It was then argued that this Labourist solution for capitalism

lasted in Britain from approximately 1931-73. After which time, and due

mainly to the world slump, it declined rapidly. 'Thatcherism' emerged out

of the ashes of 'Labourism'. As argued, with 'Labourism' gone any further

abstraction of labour would lead only to the re-socialisation of labour, this

was certainly occurring in the militant 1970s. In this respect it was claimed

that 'Thatcherism' had two suicide missions; on the one hand the break up

of socialised labour formation, hence of capitalism itself

(de-industrialisation for the bourgeois mind). On the other hand the

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freeing of parasitic capital from production, to the promise land of the

promissory bank note - the 'City1 - where it could find short term security

in speculative money dealing, in the long term hope of a move to the

ex-Soviet block countries.

Of course the above strategy has failed and so called 'Thatcherism' lies in

tatters. The bourgeois class have no all embracing strategies because they

have no future. Everything achieved by 'Thatcherism' was negative;

breaking up the forces of production, atomising workers with anti-trade

union laws and unemployment and bolstering capitalists with the force of

the state's coercive institutions; and then allowing both classes to fight it

out, whilst freeing finance capital to hover over the bones. The future can

only lie with the working class, the problem is they have to seize it by

redefining once more, for themselves, a common politics.

APPENDIX

SOCIALISED LABOUR AND THE VALUE FORM.

The category socialised labour has a number of attributes which can bedivided, for analytical purposes, into two levels of abstraction from the

complexities of the capital relation. At a deeper level of abstraction one

has socialised labours' genetic attributes, which are properties of the inner

laws of capitals decay, whilst at a more concrete level of abstraction one

has socialised labours' historical attributes, which are empirically verified

trends within production and the labour market. Taking the historical

attributes first, these manifested around the creation of internal labour

markets and the increasingly relatively autonomous spheres of control in

production, which the emerging socialised labourer forced capitalists to

concede. The fact that in later decades, after the consolidation of

Labourism, these became transformed as mechanisms of control over

labour is beside the point. Initially they were capitalist concessions whichcost capitalists dearly; raising labour costs, hindering technical change and

deflating profit rates. The nuts and bolts of the matter are that the dominant

capitalist enterprises internalise the employment relation: wages, work

conditions and division of labour are fixed by internal administration,

influenced by works councils and less by market forces.

Much has been written about the historical attributes, however little if

anything has been written in the way of an explanation of the most crucial

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aspect of the emergent socialised labourer - its genetic attributes as a

category of capitalist decay. This is a little surprising because the process

is simple enough to understand. One reason why it has been ignored has

much to do with methodology. When Marxism refrains from treating the

law of value as if it were some timeless Kantian concept, the genetic

attributes of socialised labour become central parts of our understanding

of capitalism.

In an earlier section of the article it was explained that at the heart of the

commodity form of production which defines capitalism, there is a

dialectical contradiction - the contradiction between use value and

exchange value. The dialectical contradiction revolves around the fact that

they are opposing substances united in the one body. To add to this we also

know that, for Marx, the most important commodity form was labour

power. With this in mind, let us consider the commodity form more closely.

The commodity form is a unity of opposites: on one side of the contradiction

there is concrete private labour, on the other side there is abstract social

labour. As Marx was at pains to stress in Capital, for concrete privatelabour to be socially useful labour requires it take the form of abstract social

labour. That is, labour must be valorised and exchanged with money

capital in order that its social usefulness can be validated. The emergence

of the socialised labourer effectively short circuits this contradiction and in

so doing offers the potential ground through which the opposing forces of

the commodity form of production can be abolished and communist social

relations established. In what sense does the emergent socialised labourer

short circuit the commodity form of production? Reverting back to the

contradiction, the following process of negation occurs. From the

concrete private labour side of the contradiction the socialised labourer

develops the powers and complexities of concrete labour. From the

abstract social labour side of the contradiction, the emergent socialisedlabour develops the inherently social attributes of labour. Combined, the

social labourer extends and develops its productive activity on the basis of

directly concrete social labour. In so doing the emergent socialised

labourer's conscious inclination is to exert political pressure which ensures

the use value need fulfilling aspect of production as a natural right over and

above valorisation, which is increasingly perceived as a subordinate

consideration. The vast empirical evidence of strikes, general labour

unrest, intensifying community struggles and the growing appeal of socialist

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agitation, which occurred on an ever deepening trend from 1870s to

approximately 1926, provide ample proof of the above.

In the Gnindrisse Marx was quite specific about how and why the sociallabourer substantiates itself in production on the basis of concrete social

labour; and how and why the value form becomes increasingly

subordinated. Marx argued that under capitalism labour time is the

ultimate source of wealth in the form of value. However capitalism faces

an unescapable contradiction which eventually brings about its decay. For,

as capitalism develops, so too does the social productive power of labour.

So much so that the product of labour bears less and less relation to labour

time and so value creation. In other words commodities produced are

substantiated more and more as use values and less and less as aliquots of

value (Gnindrissep704-706). As labour power is a commodity, then this ishappening to living labour activity itself; the two-fold contradiction within

labour (Marx's most important discovery) is dissolving.

Marx is quite clear as to the cause of this tendency toward the negation of

the commodity form of production - it is the emergence of the socialisedlabourer and its productive potential which outgrows its value form. As

Marx argues with respect to the role of the emergent socialised labourer,

in the above mentioned transformation -

It is neither the direct human labour he himself performs, nor

the time during which he works, but rather the appropriation of

his own general productive power, his understanding of nature

and his mastery over it by virtue of his presence as a social body

- it is, in a word, the development of the social individual which

appears as the great foundation stone of production and of

wealth. The theft of alien labour time, on which the present

wealth is based, appears as a miserable foundation in face of this

new one As soon as labour in the direct form has ceased to bethe great wellspring of wealth, labour time ceases and must cease

to be its measure, and hence exchange value (must cease to be

the measure) of use value With that, production based on

exchange value breaks down, and the direct, material production

process is stripped of the form of penury and antithesis ' (ibidp705-706, my emphasis in bold).

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Again the heart of the irreconcilable contradictions of capital when faced

by the emerging socialised labour is never made more clearer by Marx than

in the following statement -

On the one side, then, it (capital) calls to life all the powers of

science and of nature, as of social combination and of social

intercourse, in order to make the creation of wealth independent(relatively) of the labour time employed on it. On the other side,

it wants to use labour time as a measuring rod for the giant social

forces thereby created, and to confine them within the limits

required to maintain the already created value as value. Forces

of production and social relations - two different sides of the

development of the social individual - appear to capital as mere

means, and are merely means for it to produce on its limited

foundation. In fact, however, they are the material conditions

to blow this foundation sky-h

Theories of Thatcherism by Peter Kennedy

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