The Economy, Society and the State
In this presentation I will attempt to explain the intersectionality between the economy and society, and how it is justified and moderated by the state. The modern West, like all the economic regimes of the past ten thousand years, relies on myths to beguile the public into accepting the economic status quo. This happens prior to revolutions bringing into existence new social relationships, built upon new economic foundations which it is the role of the new state to protect. The modern neoliberal status quo, promoted as the Western way of life since the 1970s is now, with the collusion of politicians, undermining society in ways that only a few of us can imagine. It therefore feels like a good time for ordinary people once again start talking about what the next revolution might look like.
If you have a society dependent on debt-based money and spending power, with an often controversial made up morality to define and justify its allocation of resources, and this orthodoxy is promoted by governments and therefore accepted uncritically by large portions of society, than you have a society devoid of real humanity, a society genuinely on the road to serfdom, if not already a serf society.
To grasp a new, alternative future however, we must first look at how we got to where we are now and what opportunities we might have missed on the way… If the current system fails then the West fails, but if this system thrives, we will eventually destroy our planet and the lives of the people, animals and organisms who inhabit it. The choice still ours.
The Economy
It has become increasingly uncommon for ordinary people to recognise the close relationship that exists between the nature of the economy, the health of society, and the role of the state without disappearing into conspiracy theories.
In the aftermath of World War Two, the United Kingdom’s radical socialist government was interested in understanding the complex relationships between the economy, the workforce, and the state, and following the 1942 Beverage Report, tackling the social maladies of Want, Disease, Ignorance, Squalor and Idleness. Sociologists took time to research the economic and social problems that gave rise to poverty, disadvantage, and class discrimination. The motive was clear; the state wanted to ‘do the right thing’.
Sadly, this endeavour would peak by the mid-1970s and end in almost abject failure by the turn of the twenty first century, largely due to the actions of three Prime Ministers: Winston Churchill, Margaret Thatcher, and Tony Blair.
What was discovered by the post-war research, was that inequality, the legacy of almost unbridled nineteenth century capitalism prior to the First World War, subsequently combined with the effects of five years of total warfare from 1939 to 1945, had set in place a new set of public aspirations. These aspirations were an antidote to the greed and self-interest of the previous decades (and indeed centuries and millennia) and can be summed up as a greater emphasis on collaboration, co-operation, and consensus. These contrasted in the public imagination with capitalism’s prevailing legacy, and the cause of military conflict and social strife, unfairness, inequality, and elitism.
The war effort had pulled men and women, the rich, the poor, the intellectuals and the ordinary people of Britain into a shared bond of courage, which was needed to defeat the horror of fascism. A bond of courage which the old and once feared injunction of Karl Marx and Frederick Engels ‘from each according to their ability, to each according to their needs’ (1) could very well have been applied.
In the 1950s, the economy began to recover from war with the assistance of government ownership of industries which had been exhausted by the war. This collaboration of the state and the economy was mirrored by a collaboration between the state and society with the creation of a public welfare system paid for from taxation.
Whilst the aspirations were unquestionably positive there were gremlins in the model that were invisible to the naked eye. These gremlins were greed and an ongoing acceptance of extreme inequality.
From 1946 the nationalised industries continued to be run as if they were private companies with boards of directors, chairmen, and a top-down business model that, far from reflecting fairness and worker participation, reflected a sort of Soviet-era authoritarianism. It might have been dressed up in the language of collective endeavour, but it would have felt authoritarian to the general workforce in the relevant industries. These industries were therefore incapable of absorbing into their business model the collaboration, cooperation and consensus that the nation had, through the moral demands of war, come to expect as their new kind of normal. The arts captured the zeitgeist better than either the economy or the state.
The economy of Britain shifted into what became known as a mixed economic model, part private, part publicly owned. The stock exchange continued to function, the economy imported and exported, interest rates were critical features of the health of the economy, as was the balance of payments and the exchange rate of Sterling against other currency, as this affected the prices of British goods sold abroad. All these were features of an economic model reliant on the production of goods and their sale and consumption at home and overseas.
Inflation was a political preoccupation, and whilst often imported, it was the justification for policies which curtailed wage increases and led to the Prices and Income Act of 1966. Something was clearly going on within the economy, and as with movement on a Ouija board, it was not altogether clear what that something was. However, the consequences of the state trying to intervene in the economy only seemed to politicians and trade unions alike, to make matters worse. The markets and institutions were reacting badly to the reality of the ‘mixed’ British economic model and by the 1970s the country was in crisis.
The consciousness of the British public was still capable of accepting a decisive change in the relationship between the economy, society and the state. But it didn’t happen. It soon became clear that in the absence of an all-encompassing new post-war economic, social and political settlement, which would coherently reflect a new set of economic values based on collaboration, cooperation and consensus, the old certainties of unfairness, inequality and elitism would once again be stirred into vigorous life. The elitism and need for status still prevalent in the bourgeois state (2) would via its monopoly on power see to that.
The British nation could have pushed harder for greater democracy within the economy and the state, but the nature of nationalisation combined with the top-down bureaucracy within the institutions of the British state, made a peaceful revolution impossible.
After the Second World War the only arena where collaboration, cooperation and consensus were allowed to gain some practical influence was in the expanded post-war public sector. A sector expanded to achieve the socialist goals revealed by post-war social research.
Whilst the need to nationalise key industries might have seemed like a reflection of an exhausted national infrastructure, it was the first move by a democratic state to go into large scale industrial employment. From a Marxist perspective this was a transitional phase in the development of human consciousness. Whilst the need might have been purely economic, the fleeting post-war public instinct to go forward and create a progressive world where collectivisation and worker participation could change the consciousness of the nation was real. But it was never seriously accepted by the bureaucratic elite still running the state from Westminster. The Sir Humphreys’ (3) would have none of it. Their failure to see the potential in this new post-war model and adapt to a new public mood resulted in economic decline and the subsequent imposition of a financial services, debt-based, neoliberalism in the 1970s.
It was a missed opportunity, and it may have failed simply because the Conservatives and Winston Churchill won the General Election of 1951 and thus the radical politics of the Attlee Government would be tilted away from nationalisation being seen as progressive, involving worker participation and public ownership, to nationalisation being merely an economic holding position. The old values were reinstated at the expense of progress and a new post-war model of productivity withered away.
Indeed, the poor quality of labour relations in the nationalised industries which culminated in the Winter of Discontent in 1974, was in part a result of the workers in nationalised industries having business structures imposed upon them which were clearly elitist and unfair. The workers who created the value via their waged labour power were subject to management that was elitist, overbearing, and incompetent, making workers often distrustful, resentful, and angry.
Britain was being pulled further and further away from the socialisation of the means of production via her nationalised industries, and towards a more traditional commercial model for manufacturing and the extraction of energy in the form of coal.
By the late 1970s the whole country was in paralysis and the post-war economic settlement was seen as the cause. Milton Friedman and others from what was known as the Chicago School of Economics had a radical approach to the malaise of the Anglospheres economic woes; abandon the state in favour of the free market. This approach seemed from the perspective of strikes and perceptions of economic failure a sensible resetting of the principles of unfettered economic freedom. It had an alluring context: ‘freedom for the individual’ in a ‘property owning democracy’ but it was a shift in power and influence away from the people, exercised via their democratically elected politicians, and towards the powerful elites within the banking and financial services sectors.
The opportunity to unleash the productive power of the working class and to challenge the principles of unfairness, inequality, and elitism inherent within capitalism, was not only lost within the nationalised industries, but eventually ideological forces wafting in from the United States would conspire to make these capitalist values the core values of Britain’s wider society and her public sector too. The transactional nature of the profit-driven free market would eventually begin to undermine the very fabric of essential social institutions like marriage and the family once subject only to moral considerations not the principles upon which trade was based.
The declining profitability of the Western business economy, led to a change in commercial emphasis; a move away from actual onshore production and towards ‘offshoring’ production to maintain share values, commercial reputation, and the niche marketing of foreign manufactured products for Western markets. This process removed the British working class so far away from actual production that they, and the middle class that managed them, needed to have their economic existence redefined in a way that was acceptable to them, and was profitable.
With cheap foreign manufacturing came the birth of almost unlimited built in obsolescence, a shift in economic production values away from quality in favour of quantity even within domestic industries like house building that traditionally needed product longevity. The world of cheap mass over production and mass over consumption was born. Britain and the West in general was embarking on a journey away from its own economic production and towards the creation of an obscure financial ecosystem, impervious to political influence and wholly undemocratic. But did anyone care and how did ordinary people and the free market adapt?
One way the markets adapted was to finance Critical Social Justice, an obscure form of Post Modernist revisionism, which supported the marketing strategy of the corporations brilliantly. With the political class supporting the ‘truth’ of Critical Social Justice it came to be seen as the way corporations burnish their corporate ‘reputation’ to anyone well enough indoctrinated to accept it unquestioningly.
Social Justice based on identity, as opposed to social justice based on class, became a safe new orthodoxy and was therefore sanctioned by politicians, the corporations, the banks and the global economic leadership. It had to be enthusiastically promoted and upheld by state institutions such as the government, Civil Service, the legal profession, various departments within the state like the National Health Service, as well as Non-Governmental Organisations and lobby groups because much of it didn’t feel intuitive to ordinary people.
What seems largely to have been overlooked at the time was the fact that the free market has no capacity to promote genuine equality or equity, because the free market is not based on fairness and cooperation. It is purely transactional, a free exchange to, in theory, maximise profitability, irrespective of the negative social and moral impact of doing so. The free market impacts adversely on people as a class but not so obviously on identities.
Because neoliberalism seeks only profit, it is, like its capitalist forebear, indifferent to class discrimination or how class discrimination differentially affects sex, race, sexuality, and culture. It therefore unintentionally accentuates class disadvantages between different people, both sexes and more widely and globally different races and nationalities. Because reputation is of importance to corporate leaders and politicians, however, to compensate for overlooking class discrimination, the Western free market can easily be accused of promoting in the West a fake kind of equality to assuage their guilt about the economic systems inherent financial and class unfairness. This becomes a sort of new religion, promoting a made-up fake morality associated with manufactured identities based on race, sex, sexuality, religion and disability.
The way this happens is relatively simple. The free market, in seeking only profit, exaggerates the aims and claims of one group identity or sex over another. What the free markets can’t do, and relies on politicians to try and do, is to provide the optics of working to achieve increasing equality and fairness between the sexes and any other relevant identity groups. The state however cannot control perceptions at a personal level, so the blunt instrument of legislation is used. This merely adds multiple layers of hostility between the identity groups all of which have largely different and incompatible needs. A good example of how legislation makes things worse would be the 2010 Equalities Act which is simply egalitarian window dressing for a ravenously unfair and elitist free market which harms everyone.
Western governments therefore take it upon themselves to promote a strictly social and legal equality on behalf of the corporations and the free market. This goes on whilst those markets promote and endorse economic inequality. Other cultures and ethical systems look upon the West with bemusement and horror at what is in effect politicians trying to cover up a faked morality created by and for the free market.
The neoliberal belief that class-based unfairness and elitism could be re-defined to hide the class element by promoting, instead, ‘identity’ which would deliver a new kind of social justice, could not be further from the truth. It has merely, like religion before it, stoked division, frustration, and sometimes anger. It has however been accepted across the whole political spectrum, including on the left. The British Left has given up challenging any notion of economic or political inequality based on class, and now obsesses about the inequality of defined identities, concepts spoon fed to them by their very nemesis the ‘markets’ and financial service sectors. The markets and financial sectors are keen to escape the risk of class consciousness, particularly a global class consciousness being stirred back into life.
Society.
The impact of these economic changes has been catastrophic for ordinary people, and our once safe and predictable social lives. Whilst always present, acceptance of unfairness and inequality has become normalised, and this has eventually made transactional relationships the social norm rather than as in the past simply an economic reality.
The 1970s was the decade where this total transformation had its origins. Grey and cold poverty gave way to colour televisions and colourful food. Prior to the 1960s the high street baker baked bread, the high street butcher made black pudding and dripping, and everything from a local café was cooked in lard. This food was replaced by margarine, seed oils, and the eggs and bacon were replaced by breakfast cereals, with the exciting prospect of collecting coins and cards depicting astronauts, native American tribal chiefs, and footballers free in every box.
The American corporations, dependent like never before on profits to pay healthcare bills and stock values to pay pensions, were moving the population away from lifestyles and a diet heavy in relatively expensive animal fat, meat and vegetables, towards lifestyles based on consumption not quality and a diet heavy in processed foods, cereals and sugar, the latter two commodities they had in abundance.
Western society began the slow and relentless march away from having a well-nourished (as opposed to well fed) productive working class of integrated families and communities, towards the fragmented obese and narcissistic society based on transactional self-interest, that it is today. That this consumer-based model eventually undermined political tribalism was probably a bonus for the corporations and public servants, who became more powerful because politicians sprang from self-interested, but largely clueless of economic reality, political parties and so had little idea about what was going on.
Because consumerism is transactional and is primarily about the individual, it ushered in other social changes, some, like normalising homosexual relationships, were good. Others, like the rise of a new kind of aggressive, un-self-critical third wave or ‘free market’ feminism, has in the long-term undermined both sexes, the family unit, and therefore society and the state.
Feminism which seems to have achieved all its early stated goals of rights and equality morphed into its ‘third wave’ variation by the late 1990s. A gendered form of collective self-interest which one could interpret as an attack on men and perceptions of male power by newly ‘empowered’ women. Or alternatively and more likely as Frank Zappa’s daughter Moon described it in her book ”Earth to Moon: A Memoir ‘, it was ‘a steady message that women’s feelings don’t matter, that women are sex toys wrapped in lies about female empowerment’. Men and women once fused by kinship ties and economic proximity ceased collaborating around the needs of the family and therefore society, everything but the economy began to suffer. The market, keen to move as many products as possible, is disinterested in male and female sociological and psychological reality. To the free market, both sexes are merely consumers who can be differentiated to achieve commercial outcomes. This has, given rise to males feeling comfortable about identifying as females and vice versa, all of which is simply another reflection of free market influences, altering people’s perceptions about themselves and all in the interests of profit.
That this has facilitated an aggressive war of the sexes, which is rapidly reshaping the consciousness of men and women, is incontrovertible. It is aided and abetted by the internet and its algorithms, but the origins are economic. This process is also enhanced by the state providing the correct legislative framework for legal equality, but which, framed within an outdated twentieth century narrative of a ‘battle of the sexes’, leads to alienation for men and women, which is reflected in loneliness, social isolation, single parenthood, divorce, and declining innovation and growth due to escalating gobbets of correcting and corrosive social welfare.
Whatever the public thinks about third wave feminism, it is good for profits and the expanding pornography and lifestyle industries, and that is all that matters economically. The fact that as Zappa suggests women are coerced or willingly collude with male sexual entitlement became normalised at every social and economic level from up market magazines to and the production of pay-to-view pornography and Only Fans.
The arrival of mass internet usage by the 2000s simply sped up social change. Dating apps brought about industrial scale hypergamy which has become the basis for mate selection, leading the demise of the nuclear and extended family, whilst increasing loneliness and a growing dislike of average looks and social and economic medocrity by 90% of people keen to acquire the fabled top 10% of eligible mates.
Divorce was another consequence of economic demands leading social change. If you chose the wrong marriage partner, then it became possible to try again regardless of the social cost, because in economic terms there was only profits to be gained from divorce. Divorce lawyers’ fees, mediation, splitting of assets, new homes and equipment to go along with the new relationship, did nothing but generate ‘growth’ in an economy of imported products with built in obsolescence.
It’s no surprise that all societies resemble the economies that support them, and so if that economy is based on economic obsolescence, that society will eventually make even the individual feel obsolete, as only their spending power is of interest to the market, not the quality of their life.
Western societies once highly valued for their collective good will, social stability, productive endeavour and restrained but evolutionary revisionism, are being replaced with something far less edifying and unifying, a greedy dog-eat-dog-ism within which everyone is expected to participate, irrespective of sex, colour or creed. It was all overseen by corporations and driven by profit. Governments became the middle management of this essentially commercial system, ensuring as far as possible this systems survival.
Class identity and class consciousness was replaced by personal identity and self-consciousness, and the politicians, public servants and corporations, gave a collective forty year-long sigh of relief. The new left wing common sense, captured in New Labour, was no longer that class inequality was a problem, there were now numerous inequalities all associated with different manufactured identity groups. Class-based revolution had been averted, replaced by endless squabbling between different identity groups all with competing demands and spending power.
This process of transforming the working class from producer with real progressive and legitimate economic clout via trade unions and the ballot box, to consumers with hand outstretched to government, was not imposed in an overtly authoritarian way. That said, in anthropological terms, it was an overnight transformation. 10,000 years of intergenerational class, race, and sexual repression by political elites from Pharaohs to Prime Ministers and Presidents had left most people’s levels of latent entitlement and self-interest ready to burst. The free market was on hand to help them express their desires ‘economically’. Restraint was gone, and the corporations and politicians were profiting from that. Working people had willingly acquiesced to greed-based transactional consumerism which has replaced religion as the new ‘opium of the people’ (Karl Marx).
The problem for the corporations and the free market is that greed and self-interest are not natural states for human existence, but we learn them if encouraged to do so. With a consumer economy dependent upon largely debt-based consumption, it was necessary to have more and more consumers, otherwise the demand for goods would dry up and a lack of profitability would result in economic collapse. The corporations were indifferent to who the consumers were or whether they had skills, health or education. That was a government problem, just as social policy had always been.
For the tax spending state, the public are both a source of income and a cost unit. We are useful whilst we pay taxes and consume goods, particularly when over consuming. But there comes a point when the equation tilts away from a person doing their bit to enhance corporate profitability and that is when their health become a drain on the system, and they can’t work. At this point they are a burden. Unable to continue as slaves to the consumer society, people all too often become ill, depressed, or criminal. It is these people who are growing in number and are getting younger and younger and for whom a solution must be found. Currently the emphasis is on ‘mental health’ treatment as the cure for this lack of proper economic and therefore social participation.
But poor mental health isn’t really the problem, it’s simply a symptom of a wider social and economic malaise. Therefore, mental health interventions won’t solve the problems that a growing number of people are experience in their lives. The economy, its values of greed and self-interest, financed by debt, and which cause problems in society such as poor diet and stress, adversely affect people at a basic level of existence. They are an embarrassing reminder that we no longer value people in any terms other than commercial terms, and the long-term consequences for us Westerners may be catastrophic.
The final transformation of turning the working class into unhealthy consumers came about because in addition to banking, corporate profitability was also propped up by food manufacturing and pharmaceuticals. The food that the Western consumer was eating came less and less to resemble food and more and more to resemble food substitutes or a ‘food product’. Junk food with high calories and low nutritional values, dominated the food marketplace, a food marketplace also crowded out with restaurants and take aways. Cheap seed oil and sugar added to a growing epidemic of chronic illness and lowered the age of becoming chronically ill. Obesity was the cause, but the cause of the obesity was diet. The sort of diet that was essential if corporate profits were to be maintained in food corporations and pharmaceuticals.
Many people find comfort in conspiracy theories, and many hypotheses are accepted by consumers fearful of the physical and emotional wreckage they see around them and in their own lives. These consumers are trying to make sense of a world that makes little sense outside of the narrow demands of greed and self-interest.
Along with the food industry, other ways of maintaining employment were created in the West’s consumer economy. Health spas, tattoo and piercing shops, food and coffee shops, rose up in tandem with the almost universal Western smoking ban, which perversely, or maybe deliberately, aided and abetted the market for food consumption, by making food, and particularly its sugar content, the addiction to replace nicotine for the working class.
When problems in health emerged, the solution was counter intuitive. Don’t prevent the problem but invent a product to manage it. Food and pharmaceuticals merged into one horizontal market, each facilitating the commercial aims of the other. Gut issues caused by an appalling diet need a pharmacological solution not a social or nutritional one.
People got fat, tattooed and pierced, ill and unemployable, but with the government maintaining demand for mass goods and services via welfare and state employment, who was going to complain? Certainly not the corporations and banks now happy to ideologically come alongside the big state and its increasingly debt-based expenditure if society was able to continue to consume.
Whilst the commercial sector might have become increasingly dependent upon government spending and growing taxpayer poverty, government too burnished its compliance with the commercial sector, by increasingly managing its public sector workers like a commercial business. ‘Commercial principles’ saw public servants once the bedrock of a post war collectivist ambition, being recruited into target and reputation obsessed organisations. Within these organisations, workers must compete for higher salaries, based on fictitious notions of performance and leadership. The experience is soul destroying for those who fail to escape the coal face of direct contact with the increasingly unhappy public.
To justify this change in emphasis it became the role of public sector leadership teams primed with targets and obsessed with reputation, to salami slice delivery of key services like health or policing leading to growing discontent and anxiety by the public who still feel a close link between what they pay in tax and what they expect in return.
As the western economy outsourced and in reality shrank, the decline in the demand for well-paid private sector management was solved by creating a new army of public sector managers. That all this was fake didn’t really matter, it wasn’t going to stop the rich getting rich and the poor more indebted, marginalised, overlooked, vulnerable, and powerless. So there was, and remains, no political or economic desire to change anything. The 2024 Labour landslide in the UK is proof that when it comes to bailing out the free market economy, a docile government will eventually turn against its own people.
A nation of affluent working people, living in a genuinely free, egalitarian, collaborative, and successful economy would have been able to resist the snake oil salesmen peddling fake debt-based consumerism. But a Western economy shedding workers and shedding its ability to bring into existence productive value, lacks the collective will to stand up to this ideological nonsense.
Because we have lost our productive and therefore political purpose as working people, our role is not to think about all the changes we had to accommodate but to accept the authority of politicians and the markets. We were after all expected to be happy consumers, and consume whatever makes the corporations profitable, and keeps their stock values high and their corporate investors happy. These corporate investors of course include the pension funds paying their pensioners, from the profits of our now toxic consumer system. We need to enslave the younger consumers into a pattern of willing debt-based consumerism, so we can pay the pensions of the consumers operating in the lucrative grey economy. The free market is turning one generation of consumers against the other.
Whilst Western workers had up until the 1970s, via collective bargaining, gained generally good pay, they were operating within a capitalist system that hadn’t substantially altered its business model for two hundred years. There were boards of directors that were needed to ensure the value of shares in their corporations did not go down, and in public services an army of managers to motivate higher productivity by the workers and be accountable for their output. Increasing stock value was a year-on-year preoccupation in the private sector, the reputation of the Chairman, the board of directors and the company brand depended on it. This was a world where corporate governance, reputation, and compliance monitoring frameworks became features of the business and public service world, and the public was reconditioned to accept this reality and become willing consumers within it.
The State
To understand specifically the United Kingdom’s recent decline, you must go back to the mid-1970s. Back then the relationship between nationalised industries, government and the trade unions had reached a point where each was able to accuse the other of undermining democracy, the economy, or society. It was within this charged atmosphere that the post-war dream of a socialised economy ended.
The bureaucratic structures and corporate management within nationalised industries made them little better than private companies. So, by the late 1970s, it was concluded that socialism and with it a vision of economic and political equality and fairness, had lost the argument. Capitalism, and its values of unfairness, inequality, and elitism had triumphed. They triumphed because of our muscle memory, that capitalism had driven growth in the West from the eighteenth century onwards. The belief was that, by utilising debt as a substitute for capital, capitalism’s values of competition and elitism could eventually restore dynamic profitability to the West again.
To legitimise this radical change in emphasis, the works of sympathetic economic philosophers were deployed to argue that socialism was tyranny, and that freedom could only be guaranteed within a free market economy. The likes of Friedrich Hayek and his ‘Road to Serfdom’ and Milton Friedman and his Chicago School of ‘Monetarism’, became the leaders of a new neoliberal Western economic orthodoxy. A new economic and political authority, a new religion.
They helped to create a model for the West which promoted corporate profitability and stock value inflation at the expense of productive jobs, or the needs of the planet. At first the neoliberal focus was reflected in purely economic changes like Britain acceding to the Maastricht Treaty, selling her council house stock, mass privatisations, overseeing asset stripping and mass redundancies from the declining nationalised industries and from America predatory moves being made on European corporations, even in the absence of a dedicated trade deal. Over the next few decades these economic changes gave the appearance of slowing or even halting the relentless decline of British profitability.
In transitioning workers away from being well-paid employees with political influence to unhealthy units of mere consumption, an attack was mounted on all forms of socialised and socialising institutions. This was an economic phenomenon driven by declining government wealth, but because it has vast social consequences, it needed broad political legitimacy, because for the ‘left’ in particular, undermining the indigenous working class was far from ‘progressive’.
The social consequences of embracing the so-called discipline of the free market have been reflected in a new more corporate relationship between the state and the public. Those in state employment are now seen as employees of organisations, rather than public servants, as they had been seen for decades before. The socialising and socialist aspects of work in public services changed. School milk and cooked school meals with good nutritional value were abolished.
People in public work were increasingly expected to not only comply with minimum professional standards, as had always been the case, but to be accountable to increasingly elaborate management structures for their target-driven compliance-obsessed and monitored performance. In the education sector SATS became a recurring annual nightmare. This was, and still is, sold to us as a good thing, as the basis for ‘driving efficiency’.
Bits of public service work that were not costed, such as after school clubs, were quietly discouraged and non-essential work such as youth work eventually abolished. The government was no longer in the business of helping to shape society in a social, moral or material way, but to maintain an economic environment and culture where neoliberalism’s values could thrive. There was no longer ‘society’, according to Margaret Thatcher, just individuals and groups, no longer motivated by altruism, community spirit or class solidarity, but by self-interest and greed, creating an economic matrix of wealth for the few, via over consumption by the many. More and more people came to believe that they were free, because they were spending their own, now largely made-up money, on whatever new product the markets could magic into existence.
The reference to freedom being synonymous with the free market became a neoliberal mantra or myth, and was intended to nail the point home, that to survive, the West needed to get everyone to fully accept unfairness, inequality and elitism and to accept once and for all, the notion that collectivism (rather than competition) was anything but a road to serfdom. Perhaps missing Hayek’s point entirely, this model increasingly stripped democracy of its relevance too, as the public’s views were irrelevant to the system upon which they were dependent. With declining wealth came declining health and a growing need to shovel the consequences under the carpet.
Because of this shift away from collectivism towards a belief in universal competition everywhere, including within the home, a growing sense of personal failure slowly became a new reality for many marginalised and maybe not so marginalised people. You cannot promote the benefits of economic unfairness, inequality, and elitism without people slipping into failure both real and imagined.
By the twenty first century, with the help of the markets and ‘on message’ civil servants, politicians on the political left and right began to identify discrimination, based not on class but on identity, as the cause of personal failure. Exonerating themselves from any responsibility for a persons’ economic failure, they sought to blame poor people, and people now classed as ‘far right’, for the distress experienced by minority groups. Their distress could not possibly be caused by unfettered economic and social competition and unfairness, or so the narrative goes.
Initially, consumerism created a sense of wellbeing for the masses, and wealth-based success for the entrepreneurial few. This made the 1980s consumer revolution look like it was an economic triumph, at least for a couple of decades. ‘Loads a Money’, the Harry Enfield character in the UK, summed up the contradiction associated with the neoliberal philosophy, most notably that greed was unattractive and anti-social as a way of life. But by 1990s what choice did people have.
The economic upheaval that these early neoliberal changes had caused resulted in riots across Britain in poorer communities. The friction caused by moving from production to consumption has left many town and city centres bereft of jobs and purpose. Ship building, steel works, mines and manufacturing has left the British economy ‘de-industrialised’. It was a move that accentuated rather than diminished feelings of greed and self-interest. Everyone wanted to be on the gravy train, which was always paid for by someone else, and any suggestion it was wrong to be greedy and self-interested was seen as an attack on ‘freedom’. People, even in 2025, still hold an almost fabled view of politicians like Margaret Thatcher, so successful was the neoliberal revolution at reframing perceptions about social and economic justice. Those like Britain’s Reform UK party, who deliberately mimic the flag waving camouflage of the neoliberal model, do well as a result.
Approaching the 2000s it was becoming clearer to the markets, some politicians and the British treasury that neoliberal economics was not something to be relied upon for growth. Holding onto the old Hayekian orthodoxies about the negative effects of the state, its excessive spending and past failures, might help to focus the governments mind on balancing the books, but it would soon be seen to undermine the economy and ‘growth’.
This contradiction ushered in the neoliberal Blair Government with its blush of socialism, its rhetoric of Leninism, all branded as the ‘Third Way’. A government whose acceptance of the global consensus fused neoliberal economics with generous ‘evidence based’ social policy approaches and spending. It was an attempt to pretend that government spending, which only benefitted the markets, was a form of social investment. Like the word ‘freedom’, the Third Way became another myth to beguile a confused public.
The arrival of China into the World Trade Organisation in 2001 was arguably the most significant element of neoliberal economics of which Western corporations could take full advantage, watched over by economically illiterate politicians. Corporations began to ‘offshore’ production on an epic scale in industries which were relatively low yield such as clothing. They then moved up the industrial hierarchy until offshoring reached intermediate engineering. Heavy engineering having already been lost to cheaper labour markets, with the West completely missing the boat with advanced electronics manufacturing.
The move eastwards was a systematic attempt to keep corporate profits up and to drive wages down, with the compensation for consumers being that branded goods could be bought at ‘affordable’ prices.
The Minimum Wage, a Third Way policy, became the maximum wage in many occupations, a wage rate sanctioned by the state to achieve positive labour ‘market’ ‘supply side’ outcomes for the corporations. But, in a perverse twist, it deterred the development of long-term economic growth by removing wage flexibility for small or developing businesses. It has helped to destroy entrepreneurialism.
Third Way politics, the British ‘supply side’ model since Blair, is still claiming to do ‘social justice’ but in a way that benefits the big corporations the most. The creation of Tax Credits in the UK has added another unforeseen dimension to the Minimum Wage policy, which again, only benefits the big corporations, by subsidising the wages of part-time workers. With open borders, tax credits also encouraged the mass inward migration of people who can take advantage of tax credits and the minimum wage and swell the numbers of people working in low skilled occupations.
Unregulated immigration by those who have strongly divergent ethical principles has contributed to social decline and a lack of integration and social inclusion in many communities. The reaction from politicians all over Europe and the UK, predictably being to silence the majority by name calling and gaslighting, whilst speaking up for the many feuding ethical minorities they have politicised.
The fact that adverse demographic changes in the housing market, caused by fewer people being born and the older generation dying off, were compensated for by mass inward migration, is never discussed by anyone.
The multiple political and economic problems associated with neoliberalism and the ‘Third Way’ socialist model have been keenly felt. Mass immigration, upon which corporate profitability depends, added further stress to local communities, already under pressure from declining wages, rising prices (particularly housing), consumerism and the growing belief that on a personal level greed was good, even in the face of growing evidence that it was harming millions of people psychologically. The legacy of Friedman and maybe a misreading of Hayek, by their disciples Reagan, Thatcher, Blair and Cameron et al, was slowly unravelling.
Over the last forty years, the economy has gone from something that made sense because it provided real productive jobs, wages, and opportunities, whilst financing families and communities (and thus kept the state at bay), to something largely nonsensical to ordinary people. The state has been recruited to provide the political legitimacy for neoliberalism which may once have seemed like a good idea, due to1970s Western decline, but which now looks like little more than a complex financial ecosystem, devouring the West and indeed the whole world.
One is reminded of the adage ‘oh what a complex web we weave when first we set out to deceive’. The politicians of course are both the deceivers and the deceived. Democracy is now little more than a safety valve, a means of manipulating public perceptions to ensure the neoliberal model goes unchallenged. However, a growing number of people can see that this economic agenda is simply maintaining an increasingly fragile and failing neoliberal status quo.
Whilst the role of government spending to maintain economic health was fully established in the early 2000s under Blairs Third Way, it was in the aftermath of the 2008 banking crisis that the market’s attitude to the state changed completely. The state came to be seen not as wasteful and inefficient, but by using taxation and debt, as the saviour from frequent economic paralysis, within the neoliberal free market economy. By this time British democratic socialism and the post-war collective consciousness that went with it, was ancient history.
Collective identity had successfully been replaced by personal identity and self-interest, right down to the level of the family, the building block of the coherent and safe nation state. The results are that public health and wellbeing, democracy, Christian religion, politics, clubs, groups and associations are in terminal decline. The West is a collection of societies entering an existential crisis, helped along by bloated state machinery protecting itself with the aim of protecting corporate profitability. There is literally nowhere good to go with this model.
The whole situation is perilous. The West now has a house built, if not on sand, on valueless money. This valueless money props up an economic system still geared to the idea that competition and naked self-interest are both a public good and wealth generating, which of course they cannot be without the mass participation of productive labour power creating genuine economic and social value.
Even outside the more absurd aspects of the West’s ethical world, the challengers to Western hegemony line up. China is making money out of Western weakness and decline. The Islamic world has at its disposal a simplistic yet brutal ethical system ready to ‘heal’ the West of its sinfulness and sexual incontinence.
How this all plays out over the next one hundred years is anyone’s guess. But with politicians lacking any understanding or insight and therefore lurching from one election to the next, promising things that they cannot deliver, and the rest of the world just biding their time, in the absence of a worker’s revolution across the Western world and beyond, to protect our rights, our sanity and our economy, it does feel as though the West’s hegemony and with it the long fought for rights and opportunities of its once proud, productive, and intelligent working class, will soon be but a distant memory.
