Thatcherism: a red herring?

I am impatient to know how history is going to judge the multiple institutional and moral collapses of the past five years. Specifically, the interesting question is: what exactly is coming to an end? It could, of course, be various things, operating with various historical rhythms, as I suggested here. But here's a brief thought: what if the entire idea of 'Thatcherism' turns out to be a red herring? Or, at any rate, what if we were so distracted by all the conservative rhetoric of markets and entrepreneurship, that we entirely failed to see what was really going on?

The unfolding Barclays scandal forces the left and the right to wake up to the reality of what's been going on. Specifically, when we thought we were placing our trust in 'markets', we were actually placing our trust in highly complex firms and exotic cultures of individual expression, that are largely opaque to the outside world. When the rhetoric was of 'market freedom', it actually meant an abnegation of public responsibility on the part of firms and individuals. The term 'market' did for banks what the term 'God' does for Catholic Priests, in keeping government and public at bay (for a while I've had an idea for a comparative sociological research project, looking at banks and psychoanalysts side by side, to identify common strategies for achieving non-regulation; not that I want to see the entire world regulated, far from it, but it is interesting to consider what rhetorical strategies are used to avoid formal accountability). Understanding what precisely we have been placing our faith in, and accepting it isn't quite what we thought we were placing our faith in (for better or worse), is the first step to removing our faith from it. This is more of a challenge for the Left than the Right, seeing as the former still have their opponents' word 'market' echoing in their ears, whereas the latter have realised their own error.

When did this now-crumbling era begin? We (and I'm as guilty of this as anyone) like to pinpoint the late 1970s as the moment when neoliberalism emerged. It was then that the crisis of Keynesianism was completed, and a new paradigm for economic policy-making began. But this may reveal something of the narcissism of liberal elites, who like to believe that intellectuals and ideas are central to historical and economic periodization. (One might also characterise it as bloody-minded Hegelianism or conservatism, which insists that reason drives history, and not vice versa). A more pragmatist approach would recognise that ideas simply help to stabilise and legitimise forms of behaviour that have already emerged.

If the Barclays scandal proves to be decisive and telling, then we will need to shift our periodisation, such that 1968-71 becomes the key transition point in the formation of neoliberalism (or whatever we might call it instead). Two things took place during these turbulent years.

Firstly, '68 and its aftermath generated a new ethos of anti-moralism, that might have appeared heroically Nietzschean or Freudian in its more explosive and exciting moments, but could only translate into a dull masturbational culture of pleasure-seeking and deceit, as it permeated beyond the intellectual world of Guy Debord et al. Rooseveltian liberals, such as Daniel Patrick Moynihan and Daniel Bell, spotted this immediately, leading to a form of Left Neo-conservatism (which Britain seems only now to be developing in the form of Blue Labour). By the late 1970s, even younger cultural critics, such as Richard Sennett, had cottoned on to what their generation had done. The 'great refusal', advocated by Marcuse, had its noble elements, but these have eventually be vastly out-numbered by its depressingly adolescent ones.

Secondly, 1971 was when paper money was divorced from reality, following Nixon's decision to disconnect dollars from gold. Admittedly, faster telecommunications and offshore trading had been placing tremendous strains on the dollar since the late 1960s, so no doubt there is some telecoms satellite launched around this time that could claim to be even more decisive. From this point forward, the monetary system became a battle between rival symbolic codes, with the symbolic code of '$$' enforced upon the world through the alliance of Wall Street and Washington DC (see Peter Gowan's The Global Gamble). Disconnected from any tangible or material notion of value, the monetary system became a game of dictating perceptions and propping up linguistic rules.

In the broader sweep of history - as, for example, portrayed in Giovanni Arrighi's 700-year history of capitalism - it is unsurprising that a combination of these two occurences would end in political and economic disaster. The divorce of ethics from normativity ('68) combined with the divorce of money from material reality ('71) creates the conditions for a frictionless financial culture, in which critics conspired by coining the term 'postmodernism', and in which lying about the price of money is an entirely reasonable and legitimate thing to do. Taking a longer sociological view of the Barclays scandal, the question is not 'why did they do it?', but really, 'why wouldn't they do it?' On what basis, really, did any of us expect pleasure-seeking individuals, far from the disciplining reach of any market, trading paper whose value had nothing to do with utility or human need, to do anything other than manipulate perceptions of that paper's value? How else does paper attain any value, without perceptions being manipulated to some extent? And why, honestly, did anyone believe that individuals, high on the legacy of '68, would manipulate that value for the benefit of the public or mortgage-holders, and not for themselves?

Thatcherism was therefore a late-comer, providing post hoc rationalisation for a surge of egoism and monetary game-playing that was probably unstoppable by 1979 anyhow. Thatcherism provided a new paradigm for the state's role in this, to tackle inflation rather than unemployment and build sufficient prisons to make such a policy practicable, but in this it was reacting not proscribing. Perhaps Thatcherism's one stroke of courage was to dress this elite decadence up, quite preposterously, as a return to conservative Victorian England. For some reason, it is only now that Tories such as Peter Oborne and Ferdinand Mount appear to have spotted that this, like Libor, was another audacious fix. Bob Diamond, born 1951 and reaching adulthood as Nixon was sworn in, was less naive, and continues to exhibit his own 'great refusal' to accept any public judgement placed upon him.

Comments

[Ian C]

Brilliant analysis.

1968-71 was also a time of mounting alarm among cultural conservatives and Randian neoliberals that the West was becoming unrecognisable to them and ungovernable on their terms. Nixon looks like a social democrat compared with current US Republicans, but was elected in part as a reaction against the 60s cultural revolution. (The multiple ironies at work, as you mention, include the fact that as time went on the elective affinities became ever clearer between Nietzschean postmodern leftism and the amoral ethos that Randian neoliberals have exploited and extended.) And the early 70s saw growing alarm among business leaders at their loss of control over workforces and profitability. The neoliberal counter-revolution began in earnest in those years. Cultural conservatives thought they had something in common with the neoliberals, beyond dislike of the state and high taxation, and that the revolution would restore traditional values (the Thatcher Delusion). Instead, it enabled the unleashing of capitalism untrammelled by any religious or other cultural inhibitions and ethical constraints.

[Dick Pountain]

A thrilling post Will - the analysis of our current fix really does demand an excursion beyond political economy into social psychology. I still think that the best political-economic critique so far is James K Galbraith's "The Predator State", where he proposes that corporate managers and financiers colluded to hijack the institutions of the post-War New Deal economy in the interests of personal enrichment. However he shies away from the social/psychological dimension of this grab, which is what you're outlining here.

I entirely agree with your proposition that the post-1968 counterculture was the real turning point - it marked the beginning of a sea-change in the dominant social ethic. Weber's Protestant Ethic was collapsing under the pressure of new affluence, new sexual freedom abetted by improved contraception methods and exposure to television (Debord's Spectacle really amounts to mass of population being exposed to the way the rich live). David Robins and I called the new ethic Cool and tried to plot its social history in "Cool Rules": we characterised it as an amoral hyper-individualism under which people live in a permanent state of quasi-rebellion, believing that society's mores apply to everyone but themselves. We also characterised it as profoundly libertarian and deeply opposed to the boring morality of social democracy. It was no surprise when the Cool generation soon moved behind Thatcher rather than Che Guevara.

Jim McGuigan's "Cool Capitalism" (Pluto 2009), which I reviewed for Political Quarterly, takes this argument a lot further by applying the sociology of Boltanski and Chiapello and Ulrich Beck on justification and individualisation. He links the Cool ethos to German Romanticism, "The Great Refusal", and its effects on Left ideology, up to and including Lefbevre and Debord. Organised capitalism with large corporations, strong trade unions and welfare benefits gave way to seduction as the new mode of justification. Another commentator who has said interesting things about this is Mark Lilla: in a 1998 NYRB article he posed a dramatic question "for which neither Tocqueville, nor Marx, nor Weber has prepared us: What principle in the American creed has simultaneously made possible these seemingly contradictory revolutions? How have our notions of equality and individualism been transformed to support a morally lax yet economically successful capitalist society?" Your observation that thinking conservatives are now better at seeing what's going on is right on the button.

The trouble is that Cool has become The Good for ever larger sectors of the population (more as you go down the age spectrum), which renders appeals to the Public Good more or less impotent. It took WWII to forge the sociable ethic we've lost, and it may take something of that magnitude to return to anything like it.

[Account Deleted]

I think you're right to highlight the twin changes of a divorce of ethics from normativity and of money from real material wealth, but I think it's a bit too neat to trace these to Paris '68 and Nixon '71.

Selfish amorality as a creed predates Les Evenements. In this regard, Saturday Night, Sunday Morning ('58) is as acute an analysis as The Society of the Spectacle ('67).

The real agent of change that promoted financialisation was less the abandonment of gold (though that was a necessary precursor) and more the widespread adoption of the credit card.

In the UK, the Barber Boom of '72 was arguably the sea-change, rather than Thatcher's victory in '79.

[syreditgxrehdtcfvgb]

Yes, yes, the reason why Barclays messed with LIBOR is because there are to many single mothers.

It's all so obvious.

Alternatively, unaccountable economic and/or political power is always abused eventually. This is human nature and is true both today and in 1950. Moreover, blaming the misdeeds of the elites on the revelry of the poor is a pretty low form of victim-blaming.

[Will Davies]

Syreditgxrehdtcfvgb - I'm not sure if you're responding to my blogpost, or perhaps Dick Pountain's response (which is somewhat more focused on social liberalism), but I think your comment is an absurd misrepresentation of the causality being proposed here. Your use of the words "because" and "blaming" suggest you've really misunderstood what I (and probably Dick) are saying.

As a sociologist, I'm interested in how certain value and valuation systems emerge, where they come from, how they can be interpreted and so on. One way of approaching these questions is to look for their historical origins, which as Fromarsetoelbow shows, can be endlessly contested. Naturally, there are comonalities between the way a value system works for different groups; on the other hand, certain groups exploit possibilities in a socio-political order better than others (it has been argued by leftist conservatives that social liberalism has *not* worked well for the working classes at all; I don't want to get involved in that argument, and I am instinctively suspicous of it, for the same reasons as you). To carry out an analysis of how certain moral and economic paradigms emerged, who their authors were, and how they appear to us today, has scarcely anything to do with "victim-blaming" or moral judgement. Least of all does it suggest that single mothers cause financial scandal, a claim that I cannot imagine is remotely defensible, even for Tea Party-type nutjobs.

[syreditgxrehdtcfvgb]

Actually, I do understand and was disagreeing with your position, not Dick's. His argument seems to be close to something I would summarize as "TINA because of TOWIE" - that is the working classes of the developed world do not rise up (peacefully or otherwise) to support themselves because they're too busy engaging in leisure activities. Not so much a "false consciousness" as a new opium for the masses.

I don't agree with this argument, but I do think that it may be a piece of the puzzle. However, only a little piece (if at all) since this explanation misses what I consider far more crucial trends over the past few decades:

1. It removes responsibility from the conscious political decisions of those in the upper echelons of the Labour party to shift their party further to the right than even the Gang of Four that formed the SDP.

2. It ignores the real dumbing down of our culture - that perpetrated by our press. I'm particularly thinking of the press release driven news story, as explained by e.g. Nick Davies.

3. One "cause" of social liberalism has been the decline of religion. But the decline of religion has also meant less backing for economic justice (in other words, social liberalism and neoliberalism share similar causes on this line of inquiry). Now the only moral crusades come from Daily Mail editorials.

4. The forced decline of trade unions and deliberate political decisions to favour "flexible labour markets" (that is, working class apathy is a consequence, not a cause, of neoliberalism on this line of inquiry). Beecroft is the latest example.

5. Perhaps even the increased atomization encouraged by changing technological developments(?).

I'm sure there are more.

By the way, although I can't think of a better one, I'm not really sure "social liberalism" is the right term for the concept we're discussing here. After all, it's hard to talk about a society more tolerant of diverse behaviors on the one hand, and one experiencing a (perceived) rise in so-called "anti-social behaviour" on the other. Whatever has happened, it's too complex for the blanket term "social liberalism".

*********

Now, onto my problem with post. My problem with it comes in the paragraph that starts with "Firstly, '68 and its aftermath" and ends with "depressingly adolescent ones".

I'm afraid I can't read that paragraph in any other way than you signifying your agreement with people like Daniel Patrick Moynihan, which is why I, perhaps rather facetiously said you were blaming single mothers.

I agree that saying that Y (a bad thing) happened because X happened doesn't mean you consider X morally wrong in some sense. But that paragraph does still suggest you consider X (what you call "a new ethos of anti-moralism", though I dispute this description below) a bad thing.

Now, I suggested in my comment above, that unaccountable power is always eventually abused, and bankers surely have that in spades. The causal mechanism you are going for instead, says that bankers abused their power because of a changed culture thanks (in whole or in part) to the events of 1968.

Of course, in one sense you're right - even if my explanation is technically correct, I would still need a specific explanation for why power was abused then and in that way. To take an extreme example, yes unaccountable power is abused eventually, but historians still provide (and debate) the specifics of why the Holocaust happened.

However, where I disagree, is that the difference between understanding the psyche of Hitler and that of a trader at Barclays, is that you are looking for an explanation for why these bankers acted in an immoral way, and the first part of your explanation is that "a new ethos of anti-moralism" developed amongst the powerless. This seems to suggest that in order for the powerful to have acted in an anti-moral way, it was first necessary for the powerless to act in an anti-moral way. This is why I said "victim-blaming" - your explanation implies that elites would normally be as pure as snow if a new ethos hadn't developed first amongst their victims.

What needs explaining is not that powerful people acted in a morally repugnant way. What needs explaining is why now, and why in this way (i.e. LIBOR)? Such an explanation, I think, will have nothing to do with 1968 and all that.

Finally, I disagree with the description "a new ethos of anti-moralism". I don't believe this accurately describes culture as it has turned out. As a counter-example, witness the spectre of the scrounger. Our culture can in fact by highly moralistic.

[Dick Pountain]

@syreditgxrehdtcfvgb

That's a far more cogent response, and one that raises many things to deal with. In my post I was agreeing with Will's venture into the social psychology of cool/consumerism out of pure economics. I don't think that either of us would hold that therefore the psychological is now wholly determining - far from it. I've recently reviewed two books ("Winner Take All Politics" and "The Cost of Inequality") that go into great detail about the way the Right has politically outmanouvered the Left since the 1970s, particularly in USA and UK, to crush trade unionism, and the way that supine attitudes from the Democrats and New Labour contributed to that.

But to return to my argument above, I think it's plausibile that the hype-individualistic aspect of cool consumerism helped this attack succeed - younger workers tend to find union rhetoric irksome, and during the phony-war period of credit-financed boom, they didn't feel they needed its protection. It will take much time and effort to reverse that attitude.

[Metatone]

Sadly, the reality is that we've reached this state of learned helplessness because we were bewitched by Hayek's faulty thinking about tacit knowledge. Following this chimera we've endlessly tried to create markets where price can serve as an indicator that integrates information into a single indicator.

Alas, it not only doesn't work. It simply cannot work, because knowledge does not exist in that single dimension. By collapsing it into that dimension, we necessarily maximise it - to the detriment of everything that doesn't neatly correspond to it.

[Dave]

Fascinating stuff as ever Will.

One thing which might fit in with this thesis is the decline of state authority in the face of political hypocrisy. Robert Caro did an interview in the Guardian a few weeks' back around the time of his latest LBJ volume's publication.

The interviewer was asking about the malevolent impact of Nixon and Watergate on the reputation of pelicans and government, adding fuel to the fire to the Norquistian goal of state roll-back.

Caro was explicit that the damage was done by Johnson, not Nixon, where the outright lies on Vietnam and the visibility of those lies given the war's media coverage set back the New Deal view that Government was on the side of the people.