Clive Crook, a columnist in Bloomberg, does not mince his words about the new UK Prime Minister, Andy Burnham, who appears to be of the view that the pro-market reforms of Mrs Thatcher and some of her successors (not nearly pro-market enough, in my view), were all a terrible mistake. We should, according to Mr Burnham, look back with fondness with what came before. (The Institute of Economic Affairs has this rather nice takedown.)
Crook is having none of this blather. Here are a few paragraphs from the article, which is paywalled, so I won’t quote the whole piece.
If all that’s holding the United Kingdom back is the country’s mood, then the arrival of Andy Burnham as prime minister might improve its prospects. Briefly. If the remedy also requires some particle of coherence and clarity about what the government needs to do, the prognosis is grim. The contradictions and absurdities that he’s ventured so far are remarkable even by the standards of modern British politics.
To start with the most bewildering, Burnham is apparently nostalgic … for the 1970s? He was alive in 1979, when Margaret Thatcher came to power — but nine years old at the time, perhaps not paying close attention. A slightly older cohort recalls the immediate pre-Thatcher years as an unparalleled disaster, which helps explain why her party won that election and the three that followed.
The nadir was the “winter of discontent”: strikes in response to the Labour government’s efforts to curb inflation, shortages of food and fuel, trash piled 10 feet deep in London’s squares (Leicester Square was known as Fester Square; you could smell it from Downing Street), more strikes, pickets blockading hospitals, corpses stored here and there while gravediggers pressed for better terms, more strikes. Returning from a little downtime in Barbados, Labour Prime Minister James Callaghan sealed his party’s fate by saying he was puzzled by all the talk of crisis.
This was apparently the golden time that preceded the unforced errors of the 1980s and the following decades, when a global plague of market fundamentalism brought the country low and destroyed the dreams of working families.
Admittedly, despising Thatcher and her works will always be an article of faith for the British left. Burnham is hardly unusual in this respect. What’s more surprising, especially for a leader who says he means to unite the country and overcome factionalism in his party, is to extend much the same contempt to the pragmatic center-leftists led by Tony Blair, who resuscitated Labour after two decades of humiliating defeat and set the country on a more moderate, popular, social-democratic course. It isn’t just Thatcherism that Burnham aims to reverse, but “four decades of neoliberalism.”
Bring back council estates, cheap buses and organized labor. Nationalize a few industries. Maybe reopen some mines (though, obviously, people wouldn’t be allowed to burn the coal).
Perhaps we are all a bit to negative about the new Prime Minister. Perhaps he really is just the ticket for restoring Britain’s fortunes. A few years of his policies, a few years of garbage piled on the streets, inflation over 10%, rolling electricity blackouts, a tsunami of unemployment, may be just enough to float Nigel in with enough of a majority to restore some degree of recovery to Britain.
However, NetZero is SO damaging at this inflexion point in history I’m not sure if even Nigel can restore Britain’s fortunes. Britain may well just be too far gone now.
I believed for many years that ‘another Thatcher’ was the remedy for Britain. Then I briefly fantasised that government by the original Thatcher, revived by either AI or dark magic, would be needed, as no-one in the present was up to scratch.
Today, I believe the task would be beyond even a reincarnated Lady T. What we need is another Pinochet.
Tony Blair, who resuscitated Labour after two decades of humiliating defeat and set the country on a more moderate, popular, social-democratic course.
Whatever the emoji for a quizzically raised eyebrow is, consider it enacted.
It will be much worse than the 1970s – Britain has a much larger population now and the population is divided into groups that hate each other (although it is a “crime” for the native British people to admit that they do not like the new populations – oddly it is not a “crime” for the new populations to say, very loudly, that they hate the British – two tier “justice”). Farming can not provide for this bloated population – and we also now import manufactured goods, so the old practice of exporting manufactured goods to pay for food and raw material imports, is now dead.
“The City – financial services will save us!” – no they will not.
Marius – Pinochet made some mistakes, for example rigging (“fixing”) the exchange rate – that almost led to total disaster. When currencies are a physical commodity (say gold or silver) then exchange rates are indeed stable (for the obvious reason that the money of different countries is really the same physical stuff – under different names “Pound”, “Dollar”, “Franc” and so on), but to try and get stable exchange rates with FIAT currencies is folly.
However, I know what you mean Sir – and the Congress of Chile had outlawed Allende and his terrorist regime (literal terrorists – he had a bodyguard of Marxist terrorists from various countries) – dramatic action was needed, to end a regime that was a bizarre mixture of Marxism and Keynesianism.
Is such action possible in Britain?
I do NOT think it is – as the armed forces here are now saturated with leftist propaganda, including (indeed especially) the officers (the elite private schools went “Woke” quite some years ago now) and the only alternative source of authority to Parliament, King Charles, has also accepted the agenda.
I do not know if this nation will survive another three years to the General Election.
Even keeping in mind all the limitations of GDP as an economic measure etc, the 1970s performance of the UK does look favourable compared to the performance of Britain since the 2008 recession. GDP per capita increased approximately 2pc a year in the 1970s. Since 2008 the average has been at best 0.5pc increase annually. National debt as pc of GDP fell in the 1970s while it’s rocketed since 2008.
The talk about 1970s/1980s may be historically interesting but I think ignores that current British problems are different to either decade. The British economy since 2008 has seemed to be two Japanese style lost decades only with mass immigration on top of it to make things even more unstable than it is for Japan.
Paul, are you turning mercantilist?
“Farming can not provide for this bloated population – and we also now import manufactured goods, so the old practice of exporting manufactured goods to pay for food and raw material imports, is now dead.”
The UK has imported manufactured goods for decades or more. Some of this is because it makes sense to do so (I don’t need to remind you of all the insights going back to Adam Smith and before about division of labour, specialisation, comparative advantage, etc). The key is that we pay for this with what is earned in other ways – whether services – or what used to be called “invisibles” – returns on investment in foreign countries, etc, etc. Even without the sort of factors you cite about currencies and so on, the secular shift in many countries towards services, and higher-end, value-added manufacturing and away from “metal bashing”, is clear and I see no reason to mourn the loss of jobs spent working in factories, with all the monotony. Robotics and all that.
The problems of a bloated welfare state, over-regulation, heavy taxes, the anti-energy policies of Net Zero, our messed up education system, and all the rest of it, contribute to our current travails. But I don’t think it makes sense to complain that the UK does not make physical stuff any more. It does, just with far fewer peoplle.
Sure but UK has been a net importer of food since the 1870s
I was only 8, and it baffles me that anyone couldn’t have noticed the state things were in. Maybe Burnham didn’t race up the aisles of the local supermarket with his mum, trying to get to the spaghetti hoops before the staff put the new price tickets on. Maybe he didn’t have rubbish piling up on his street. Maybe his gran didn’t have to wait six months for a phone. Maybe a major landmark near where he lived didn’t burn to the ground because the firemen were on strike. I don’t know. Perhaps he liked wandering around with candles during the power cuts. I admit that I kind of did.
But if he doesn’t like the Thatcher reforms, you’d think he’d be over the moon about the way the country’s been going over the last thirty years.
Just wondering: do the bookmakers of the UK have a bet going yet on how long this latest PM will last?
Asking for a friend.
+1 what San Duncan said.
I was also there, albeit a few years older than he, and there’s no two ways about it, it was Absolutely F**king Dire. I’ve sometimes tried to explain to my American wife how terrible the situation was, even watched some YouTube videos, but she just can’t grasp it.
Abiding memories include:
An ex-army fire appliance (a Bedford lorry with a tank on the back) manned by the older sort of Boy Scout, the kind that are called Explorers in the US. And not in some remote rural district, either, but in stockbroker-belt Surrey.
Drinking pints by the light of an oil lamp, that had been pulled by a hastily-reinstalled hand pump.
Refrigerated van trailers parked behind the back entrance into hospitals, and the charge nurse fretting about how long they could run on the DERV left in the tank.
The ‘Big Brother’ commercials exhorting us to “turn something off”, as our duty to the Party.
At least one arrestee in the cells where the desk sergeant freely admitted that he’d put the man in custody in fear that he might freeze to death in his unheated room.
And, hanging over everything and everyone, a wet soggy blanket of malaise, with no apparent end in sight. That sickening period was at least one reason that I grabbed onto my first chance to move to the US, with both hands.
llater,
llamas
I was 7 or 8 in 1978 when i first saw disappointment in my fathers face for something i did not do. He had came from a working visit to UK London and he said: there are people begging in the streets (implied like here in Portugal)
do the bookmakers of the UK have a bet going yet on how long this latest PM will last?
William Hill is offering odds on “To be Prime Minister for longer than…” markets
Liz Truss (49 days): 1/200 (essentially a formality)
Boris Johnson (3 years, 45 days): 1/2
Keir Starmer’s own tenure (roughly two years): 1/10
Gordon Brown (just under 3 years): 6/1
Tony Blair (10 years): 10/1
There’s also a related market on not being Labour leader at the next general election, priced at 6/1.
You might be interested in Tocqueville’s Memoir on Pauperism (1835).
IIRC Tocqueville remarked that he found more poverty in England than in Portugal, in spite of England being much wealthier. He blamed it on government welfare: his thesis was that well-off people in England did not feel any obligation to take care of their poor relatives, because of the primitive welfare state existing back then.
I suppose that one could also make the opposite argument, that Portugal remained poor because well-off people took care of their poor relatives, relieving the latter from the need to work for a living.
No Johnathan Pearce – as I have pointed out many times before, none of the great free trade economists believed that imports could be “paid for” by Credit Money Bubbles.
They believed that imports had to be paid for by exports.
This is what Adam Smith, and before him Sir Dudley North – and before him the School of Salamanca and so on, and every free trade economists taught – right up to modern times.
It was in the 1970s that the modern idea that imports could be paid for by Credit Money bubbles became the mainstream view.
And the mainstream is barking mad.
You can not have an economy of tens of millions of people where raw materials and food are imported AND manufactured goods are also imported – where imports are “paid for” by magic pixie dust – that does not exist.
If you want nice things from overseas – you need to sell stuff of your own overseas, in order to pay for it.
By the way the American situation is not ideal either – there has been a systematic campaign to undermine American farming, and to concentrate vital food related industries under a handful of corporations – some of the key ones being foreign owned.
This is not really “Free Trade” – it is a political campaign (although aided by Corporations) to undermine the political independence of the United States. To confuse a political campaign of economic sabotage, with free trade (as Adam Smith or the others understood it) is an error.
However, the American situation is not as bad as the British situation – the British situation may indeed by hopeless.
Cheap buses? Free breakfasts?
@llamas – if you don’t mind I’ll keep that list to throw at any Burnham fans I run across. I’d add to it:
the three day week (and that was Heath, nominally a Conservative)
Unions competing to “close the wage gap” vs. “maintain differentials”
At university learning special relativity by candle light
The university book shop finding that the majority of stolen books were now graduate, not undergraduate, level (property is theft, don’t you know)
Coming back from a dance around the Silver Jubilee and being attacked by Union flag burning leftists*
* That one was actually amusing. It was a Scottish dance, and one of them came up behind someone in a “skirt” and tried to grab “her boobs”. He just turned and grinned through his beard; he was a big broad-built lad …
Paul:
I feel Britain is in a rather weaker position now than it was in the 1970s. Then we still had major manufacturing and extractive industries, as well as a secure national electricity grid. We do not have these things now.
The idea that the rest of the world will always be happy to sell us their actual, physical goods in return for our unbacked fiat currency is a comforting illusion. But one day there will be a reckoning. Until then we will live in a fool’s paradise, and pursue luxury projects such as net zero. History will conclude we were governed by lunatics.
JohnK
Yes indeed.
And the claim that the foreigners will use this fiat money to buy up assets is true – but terrible (not good), it means that the British (and American) people will end up tenants (indeed serfs) in what was once their own country.
This is nothing to with free trade as understood by Adam Smith or A.L. Perry – that was about paying for imports with exports, importing somethings and exporting other things.
As for the concentration of economic power (for example only two major seed companies left in the United States – there used be dozens) this is partly due to the patent laws (I used to be a strong supporter of Intellectual Property – but the perverted uses this doctrine is put to has lead to serious doubts), but also a mass of other regulations – that are concentrating vital things (such as “food processing”) into a few hands – undermining independent farming families.
It is all deliberate (it is not an accident) – the international establishment want the United States to be “part of the world economy” – which means they can get rid of such things as the Bill of Rights (especially the First and Second Amendments – which they detest) “we have no alternative – we must fit in with the international order, we DEPEND upon it – we would starve without it”.
As for Britain – the battle may be, tragically, already lost. Dependent on imports and with no fundamental liberties left to lose.
When people such as Richard Cobden and John Bright spoke of an international economy – they did NOT mean international government.
Just as when Hugo Grotius spoke of international law – he did NOT mean international government.
These doctrines have been perverted – turned into the opposite of what they were meant to be.
Liberty turned into statism.
This morning the binmen arrived! They took the trash! They hadn’t for 8 weeks. I shall stream Showaddywaddy.
none of the great free trade economists believed that imports could be “paid for” by Credit Money Bubbles.
Oh I am sure you right on that, Paul. However, since we are not yet in a world of hard money, to say that because some countries mess around with their currencies means that a country such as the UK should revert to mercantilism, or whatever other label you want to use, is wrong, in my view.
Every thing that certain countries do – currency finagling, central bank QE, subsidies for exporters, IP theft, etc, can give people an endless list of excuses for tariffs and non-tariff barriers. In the absence of clear national security considerations – precisely defined, and not vague – the default should be open trade.
I think it was someone who said “don’t let the perfect be the enemy of the good”, or words to that effect.
JP:
I too am in favour of open trade. The problem is that Britain makes very little with which to trade. Finance and “invisibles” do a lot of heavy lifting.
In the 50s and 60s people used to worry about “the balance of trade” because imports had to be paid for with real money which could not be created by fiat. Since 1971 money has been created at will, and has accordingly plummeted in purchasing power. I think £1 in 1971 bought what you would need £15 now. This is not a system which can last. The only reason foreigners would accept payment in pounds is if they can recycle those pounds into buying up physical assets in Britain, which is what is happening. Vast swathes of Britain are now owned by foreigners. It won’t end well for us.
Johnathan Peace – it is NOT that Britain is important food and raw materials and exporting manufactured goods. That might be problematic in its self (if there was a threat to energy, food or raw materials supplies from overseas) – but the situation is much worse than this.
We are importing food, raw materials AND manufactured goods.
JohnK – I hoped that the crash of 2008 would finally open the eyes of people to the madness (the insanity) of relying on “Financial Services” Credit Bubbles – but it did not, indeed the situation now is worse than it was in 2008.
As for “they will use the fiat money to buy assets” (which is what some people say) – yes, and that is TERRIBLE, because it means that the public end up as tenants (indeed serfs) in what was once their own country.
As for the political and cultural agenda of Corporations – witness the advertising boycott of GB News television – GB News is not very “right wing” (if it is right wing at all) – but the “professional bodies” of the advertisers and the vast Corporate bureaucracy clients still hate it.
In a way it is a good thing – as it means GB News viewers are spared the “Woke” (Critical Theory Marxist) advertisements that dominate the ITV and do so – which are concerned with pushing certain racial groups (note that no one complains about lack of white people in various roles in Nigeria and so on – “Diversity” is very much a one-way-street, it means get-rid-of-whitey for his supposed crimes of “exploitation and oppression” – Critical Theory Marxism pushed by “capitalist corporations”) and certain doctrines (such as feminism and homosexuality) NOT really concerned with selling products – but it still costs GB News a lot of money.
The Milton Friedman view of a Corporation as solely concerned with long term profits for “Aunt Agatha” style individual share holders (in reality individuals own a small fraction of shares – they have not owned a majority of shares in Britain since 1965) is just wrong, the Corporate bureaucracies have very different concerns.
Such as “integrating the United States into the world order” – and getting rid of pesky reactionary things such as the Bill of Rights.
That is not what Free Trade was about to Cobden and Bright – but this mutant “Free Trade” is about that.
The targeting of key industries in the United States by the People’s Republic of China tyranny could not have succeeded without the active cooperation of large Corporations (Corporate bureaucracies – made up of university educated managers) in the United States.
As for the United Kingdom – I fear the battle, the battle for long term survival, is already lost.
Living standards are still high in the United Kingdom – but there is not much of a real economy to act as a foundation for these living standards.
For example, we are not really in the top ten of manufacturing nations any more – although it is sometimes claimed that we are.
As JohnK knows – the British example is slightly different from the rest of Western Europe.
Here the population of Indian Subcontinent heritage, especially Bangladesh and Pakistan, are more numerous, than they are in other Western European nations.
Certainly with the Islamic part of this population, the much anticipated “assimilation” has not occurred (not in a real sense – NOT “pop music and association football”) – indeed can-not occur.
Islam has its own basic principles – as its followers see the matter there is no reason to give them up (although they may pretend to give them up) and adopt the principles of the dying West.
After the British people do not seem to believe in British principles any more – or even know what they are (for example ask a typical person about the right to keep and bear arms – and they will assume it is “American”, as for religion – for modern people the Bible is an unopened book), so why should the new populations adopt them?
Birmingham is not the city of J.R.R. Tolkien and Enoch Powell any more – the “assimilation” (real assimilation) did not happen, and can-not happen (see above).
Other cities and towns will go the same way.