upward trend under Thatcher's regime of savage deflation, the last fortnight has witnessed a rise in interest rates to their highest levels, in real terms, for technical U-turn, by intervening in the foreign exchange markets. Are Thatcher's economic policies falling apart?
The mood on the 'serious' side of Fleet Street is suggesting that they have, but a more fundamental shows that her policies have had a mixed showing so far, and may yet be successful.
To understand what nias beennaiooentac must reject the rhetoric of the Tories' ideology and the technical couiluilll jargon. The policies were originally posed as aiming to reduce inHln dan lns oojeclivo seems to have been achievas it has now aroppeu below five per cent Yet inflation as such was never the fundamental problem for capitalism. It quite possible for capitalists to continue to make profits when prices are rising. Rather, the antiHaidON Mietosd smokescreen for a massive Collliactol the onomy designed to weaken the working class.
Similarly the "technical' objectives of Ah! The House of Lords!
Televised!! controlling the money sup ly and the PSBR (Publi BeCO DOILOWIIZ are incidenta Requirement) to the Tories' real agenda Hor example it has beer shown conclusively several times over by bourgeois economists that it is quite irrational even from their point of view to try to target a given level of the PSBR. Yet it does help in the ideological presentation oi strategy. by providing a mysterious cloak for their defla tionary objectives.
The method behind their apparent madness is to be found in the political philosophy of Margaret guru the conomist FA Hayek, who concerned not with monetarism or any other technical "ism' but with the twin long-term aims of dismantling the welfare state the power of unions. Her real In less enlightened times it was regarded as an entertainment to visit the lunatic asylum and view the inmates... restore the conditions for profitable accumulation.
The task however was never going. easy. Unlike President Reagan WIlU set ott on a similal road in 1981 Thatcher had to contend in the early opposition sid in paropposition, particular with a labour torce which was already half unionised.
In the US unionisation was steadily decreasing in the 1970s and it did not take long for Reagan deliver substantial blow through his defeat of the air traffic controllers. It was not until 1982 that Thatcher seriously began nerassalll Do stereo the enormously divisive impact of unemployment.
There is little evidence of any succes terms) so far. Profit rates plummetted initially in the wake of her artificially created recession By the beginning of 1984 they had recovered only to about six per cent, the same as they were in 1979, far less than the returns capitalists obtain in other countries Productivity after dropping initially, rose sharply from 1981 to 1983, an achievement which has been hailed practice?
An historic occasion! capitalism. much that was due to cyclical factors and the once-and-for-all effect kicking out backward capitalists. This rise was unlkelv to bi repeated, and indeed prolevelled off wucvil 1984.
Meanwhile, despite the extraordinary economic repressions of the CuSOvCu she yet succeeded in making widespread cuts in the rea wages of those still workIng.
Her problem is that she cannot afford to let up on unemployment if she is to Contnuc her offensive after the miners' strike is UVCE Yet the massive deflation of the last few destroying the ycal s Major public infrastructural vestment been postponed to meet the demand for cuts: yet what is to happen when in the future the sewers start col. lapsing?
Private investment remains low. Small businesses have been desdestroved in their thousands. The skills of the workforce have been squandered and are not being replaced. In the long term, Mirs Thatcher could Don't you think that you are indulging in a latter-day version of that obscene succeed in restoring profitable accumulation buLall. DuL lIc : capitalists who benefit will be the multinational corporations who will treat the British economy as one among many backwaters in their global empires.
More immediately, she has to deal with the present contradictions her strategy She has already destroyed large chunks of the economy, which, now weakened, seems a bad bet for international capital despite Britain being the fifth largest oil producer in the world.
u sarato see wiete d recovery could come from. The beleaguered econom!
therefore disproportionately threatened bý the unstable world oil market and the strong dollar. If, some analysts predict, under S2r by the middle of the oil collapsed to year, situation could become critical.
Mrs Thatcher is still pruning the tree of British capitalism down to a few short branches. Some of her allies in the British up per classes may hope thai the frost will not weaken it further. But multinationa capital will be merely inconvenienced if this curs, for they have other soil to grow upon.
Nonsense! It's quite different -— Now you have them in your living-) wy room? - now they run the asylum..
Socialist Action 8 February 1985
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at least 150 years. At the same time the pound has plummetted and forced the government to mount a