I'm currently reading Andy Beckett's excellent When the Lights Went Out: What really happened to Britain in the seventies, and have just got to the economic woes of Harold Wilson's government. Although the story of stagflation is a familiar one, and neoliberalism is often interpreted as a deliberate strategy to restore profitability at the expense of labour, it is striking quite how differently that crisis was experienced, compared to our present one. In fact, politically, the two are direct inverses of each other, making a class-based analysis almost impossible to resist, even for non-Marxists. Consider the following:
Very significantly for the direction of British politics during the rest of the seventies and beyond, some Britons were affected by the bad times more quickly, and with more sense of shock, than others. Between 1974 and 1976, it was the comfortably off who suffered. High inflation ate their savings. The low pound spoiled their holidays. A property crash - house prices fell 13 per cent in 1974, 16 per cent in 1975 and 8 per cent in 1976 - devalued their homes. The stock-market slump did the same for their shareholdings. Share dividends shrank or were not paid at all. During these years, disposable income fell considerably faster for the richest tenth of British households than for everyone else, and by larger and larger amounts the further you were up the financial scale. Even in severe recession, this was not a familiar situation...
This sense of a world being turned upside down was sharpened by the fact that other categories of Britons, traditionally not as well-off or secure, were, at least at first, less affected by the crisis. Trade unionists' wages were protected from inflation by their readiness to strike and by the political leverage of their leaders. The jobs of public sector workers were protected by the continuing increase in government spending.
Of course we know where this all ended, and it was a Labour government that first experimented with monetarism, and effectively started reversing these trends. But reading this passage, one thing that struck me was that these symptoms of crisis now appear remarkably attractive to us, in a crisis that is having the very opposite effect on class stratification. In fact, many mainstream economists would love to see companies hording less cash or distributing it as dividends, and putting it into employees pockets. The once-monetarist Bank of England has stood by and allowed the pound to fall by an astonishing 30%, while inflation may now be George Osborne's only hope of retaining any macro-economic credibility whatsoever. Many in the political centre-ground are desparately looking for ways of mitigating the extreme effects of financialisation, whereby the rich appear unscathed by this crisis. And if that meant house prices falling to a level where a new generation of 'hard-working families' could afford homes, then that might be a thoroughly democratic outcome. But by and large, if policy-makers decided that the seventies really weren't so bad after all, the strange truth is that there's no plausible way that the course of the current crisis could be diverted towards a more egalitarian path (at least not without some sort of implausibly radical reinvention of regulation, such as imposing capital controls).
Such is the extraordinary power of capitalism to remake both itself and society. In the space of half a lifetime, the experience of capitalist crisis has been entirely stood upside down, from being something that the great unwashed visit upon the wealthy, to vice versa. In our current financialised period of capitalism, we assume that the wealthy will always benefit from upheaval, but how short our memories are. Who is to say that the crisis of the 2030s - or sooner - won't be far more fearsome for elites than for everyone else? Unless one buys into the headier forms of world systems theory, it is entirely impossible to say.