The Moral Economy of Recession: the 1980s and now

In the course of my research for an essay on the Social Democratic Party (1981-88) - one of those embarrassing moments within Labourism which sheds far more light on the movement than any of its leaders’ self-serving stories or speeches - I came across the concept of a ‘moral economy’, in a quite brilliant essay written by the social historian Raphael Samuel during the SDP’s early heyday. Samuel also makes use of the concept elsewhere, as a way of pinning down particular class interest-based outlooks, moods or prejudices which, often all of a sudden, seem to shape the Zeitgeist. In the case of the SDP, the moral economy being re-shaped and represented was of the new professional, technocratic middle class brought forth by the post-war social democratic consensual project of partial social equalisation, civic modernisation and state expansion.
This was the ‘liberal salariat’, moderately militant and by the 1980s ever so politely aggrieved that with the onset of Thatcherism their moment in the ideological sun was passing. Like Stuart Hall and Eric Hobsbawm, Samuel seemed to regard the SDP ultimately as a ‘default position’ for consumer capitalism, if the harsher Thatcherite medicine proved impossible to swallow. As we now know, beyond the initial gulps of mass unemployment and rampant inflation, the Falklands war and the miners’ strike, the British public developed quite a taste for radical counter-revolution. At the same time, Neil Kinnock stripped Labour of its socialist vestiges, and made the party ‘electable’ (if largely unidentifiable) again. The SDP, to quote its principal biographers’ final judgment, “went up like the rocket and came down like the stick.”
I’m happy to share my draft essay with anyone interested. Honestly, the Social Democrats were far more interesting than you might think, if often inadvertently so and notwithstanding their own self-importance, as the last grand project of social transformation in British politics and the purest political expression ever of middle-class sensibilities (and in their social exclusiveness, Crewe and King concluded, “fated to fail”). But for now it got me thinking about the ‘moral economy’ of our own time. On the face of it, the early 1980s were not that different – that was after all our last ‘deep’ or ‘serious’ recession – but I found myself wondering why this first recession of the 21st century feels so different. Our ‘material’ economy has been utterly transformed of course by the forced marketisation of every human interaction by neo-liberalism, firstly under Thatcher then her New Labour heirs. But is there also something about our ‘moral economy’ which has changed fundamentally in the meantime, and given this looming recession a very different social and ideological complexion? We might start by looking at the very different sets of scapegoats of the 1980s and now, which superficially at least seem to suggest very different popular narratives of blame and retribution for ‘what’s gone wrong’.
In the 1980s, the trade unions were the national-popular pariahs. They were widely blamed for the ‘winter of discontent’ and the public sector strikes which were judged to have done for an already ailing old Labour government. Whether this was true is beside the point; the idea became a central pillar of Thatcher’s project of “regressive modernisation” and “authoritarian populism”. The trade unions were cast as anti-democratic, anti-popular, selfish and greedy bully-boys; their own memberships declined sharply, from around 12 million at their heyday to around half that now. This put the SDP – as a handy litmus test of polite middle class opinion – in an awkward position. Many of the new party’s leaders had received substantial political and material support from the trade unions and their right wing leaders during their own Labour Party careers, and even in the 1980s a large minority of SDP members (around a third) were trade union members (although rarely active; they were not especially active party members either, preferring “writing cheques to pounding pavements”). The SDP squared this circle by attacking particular trade union restrictive practices; most obviously the ‘closed shop’, which became a peculiarly middle-class bête noire of the early Thatcher period.
The trade unions, ‘the battalions of organised labour’, were thoroughly tamed. They lost their collective institutional strength. Trade union membership now serves as little more than an insurance policy against redundancy and bullying management. Old-style industrial action is rare and half-hearted. The weakness of the trade unions is a major but rarely noted factor in present low levels of inflation; unlike the 1970s and ‘80s, there is little ‘wage militancy’ to help push up prices, and if they do go up it will be mainly because of rising import costs. So, in this recession, the trade unions have not been scapegoat-ed (though as we shall see, anti-trade unionism has mutated into a general prejudice against the public sector, where the trade unions remain influential). If anything, in their ‘national labourist’ mode, they have reverted to their historical role of protecting ‘British jobs for British workers’, rhetorically if not practicably (European employment law prohibits labour protectionism). Other 1980s pariahs have also been thoroughly tamed, and in some cases turned into pillars of respectability. Gay men, for instance, were hounded for AIDS, paedophilia and the ‘permissive society’ in general; the tabloids of that decade ran virulent gay-bashing campaigns which would now, in the days of civil partnerships and the pink pound, ‘gay villages’ on the tourist trails of selected cities and a compulsory gay man on every chat show and soap opera, be unimaginable.
No, the first public enemies of our first 21st century downturn are ‘bankers’; those thrusting men in suits who have turned our economy into the global equivalent of a bookie’s shop, with unimaginable amounts of money riding on unfathomable calculations of risk, debt and speculation. A house of cards, built on card houses sold to people across the western world (not just the US) who were never going to be able to keep up the payments beyond the salesmen and mortgage brokers’ nice fat commissions, has come tumbling down faster than you can say ‘property owning democracy’. And it all makes for lots of alliterative headlines, agonised interviews and pompous denunciations from politicians who have only very recently jumped off the ‘futures and derivatives’ merry-go-round and declared themselves converted to something called ‘neo-Keynesianism’. This basically means throwing vast amounts of public money into bottomless bank vaults, until the men in suits start trusting and talking to each other again (oh, and they manage to resolve – or at least cover up - the basic structural problem of the global capitalist economy, which is the imbalance between Chinese exports and savings and American imports and debts) .
Now, is this popular outrage against bankers in any sense left wing? Labour politicians have tried to board the bandwagon – just as they always did lambast “idle and usurious capitalists”, while praising “productive employers” and spurning any systematic critique of capitalism - but with no obvious political or (as we shall see in the Euro elections and next year’s general election) electoral benefit. The Tories have chimed in too, albeit a little muted. Political forces of the right have always been ready to attack capitalists and capitalism when it suits them; especially in finance, which is historically associated in the reactionary imagination with Jewry and various other international conspiracies. Fascism, the political movement of ‘the small man’, had a strongly anti-capitalist undercurrent in its dynamically contradictory mix; even Thatcherism attacked what it regarded as the conciliatory, Heathite, wishy-washy style of management which had prevailed in the public sector and the large private companies of mid-20th century corporate Britain. That brick through Sir Fred Goodwin’s window could have come from any angry hand.
What’s most interesting about this recession, at least for now, is that it doesn’t really seem to have started yet. We are living through a kind of economic phony war. Dire predictions are being made about levels of unemployment (3 million by 2010) and business failures (1 in 7), but if you go to city centres (especially outside the finance industry hub of the south east, where ‘closed shops’ of a more literal kind are all too evident) they still feel pretty buoyant. People are still going shopping for want of anything better to do, even if (sales figures suggest) they’re not spending quite so much or so recklessly. This is partly a matter of popular acquiescence; people are accepting cuts in wages and hours, and sharing the pain in what is actually quite an impressive attitude of collective responsibility. Or, without trade unions to organise collective or even sectionalist resistance, they are going quietly and individually into early retirement or private misery. In turn, these deregulated and privatised, ‘disorganised’ individuals are seeking their own personal solutions: ‘getting on their bikes’ and trying that small business idea they’ve wanted to pursue for years (most will fail, incidentally) or, application figures indicate, bringing their gap years to an end and finally going to university. Unless you’re completely maxed-out on credit, or facing imminent repossession or bankruptcy, there is still for most people some amount of financial slack in personal circumstances after the boom years; parents or savings or second incomes (or now, redundancy packages) to fall back on.
But it is also because the full effects of the recession are taking time to work their way through to the ‘real economy’ in which most people make their livelihoods; and because all the considerable efforts of government so far have been directed to cushioning those blows pre-election. Once those delays and mitigating effects have been superseded or exhausted, it will become clear just how marginal and precarious so much contemporary ‘employment’ is; and how dependent on a self-sustaining and steadily expanding ‘service’ economy such as we have had for the last 30-plus years in much of the ‘post-industrial’ west. How many people are engaged in varieties of ‘odd job’? All those people running small businesses or working as contractors; ‘Yellow Pages workers’, we might call them, dependent on other people’s spare money and lack of time just to keep themselves afloat. Or the millions of people on minimum wages in the catering and hospitality industries, entirely reliant on passing trade.
There are other factors in the economic phony war. In particular, public spending is still at levels set by the current three year Treasury spending round, which does not finish until 2011. This means that those parts of the country – in particular the urban north and Scotland – which are heavily dependent on the public sector are still doing pretty well. Or at least no worse than they were. But you can already feel an ideological wind beginning to blow against the public sector, against relatively secure and generous public sector pensions for example, or local authorities losing money through investment in failed foreign banks (and there is a genuine question to be asked about why that public money wasn’t going into public services). Figures reveal still rising public sector wages and employment (the central economic story of the New Labour years), albeit at much reduced rates of increase. As I write this, The Guardian reports that “the number of local authority chiefs earning over £100,000 a year has gone up by 27 per cent in the last year”.
People who work in the private sector, and who have ridden the pro-business ideological tidal wave of the last thirty years, suddenly find themselves washed up on the beach. They look around and see civil servants and local government officers still paddling in the shallows. By the time the next government – Tory, Labour or some weird hybrid of both or neither (and frankly, like the eminent Labour historian Ross McKibbin, I’ve ceased to care) – has to slash public spending by anything up to 50 per cent, simply to preserve the economic viability of UK Plc, the anti-public sector breeze should have built up into a nice howling gale. The moral economy of the early 21st century depression will have found its necessary, and for capitalism utterly congenial, scapegoat. The public sector will be reduced in scope and spending to US levels, always the ideal for a briefly cowed but still wholly hegemonic capitalism; and at least one target of the neo-liberal project – ‘big government’ – will be triumphantly vanquished. The ‘bankers’ – chastened, anonymised and customarily prudent – will be able to wriggle free from the stocks of public opinion, retreat to their back offices and start making money again for themselves and their shareholders. In other words, business as usual.
We can also confidently expect a revival of the other great 1980s folk-devil: the notional recipient of public services, the all-purpose and variously defined ‘scrounger’, fecklessly leaching off the hard-working taxpayer. Actually it won’t be so much a revival as a re-focussing; the ‘scrounger’ never actually went away under New Labour, and provided the major ideological underpinning for waves of social security legislation, especially the project’s ‘welfare to work’ flagship programmes. Fresh-faced ideologues of ‘public service reform’ like the Blairite ultra James Purnell continue to crack the whip. Within the relentless logic of individualism – freshly translated by New Labour into the language of ‘personalisation’ of public services - poverty, unemployment and homelessness are ultimately the responsibility of the poor, unemployed and inadequately or un-housed person.
Within the terms of the latest legislation (partly inspired by 1980s Marxism Today wonderboys Charlie Leadbeater and Geoff Mulgan)the feckless, workshy and incapacitated are to be ‘facilitated’ into ‘self-directed support’; which is all well and good in times of economic boom, when there is new money to spend and new jobs to be done. In bust, responsibility mutates into personal fault for inevitable failure. And the better placed but anxiously prosperous can say ‘serves ‘em right’, and complain ever louder about ‘feather bedding’. As social relations become even more poisonous under the impact of recession, the question will be posed ever more sharply – why should ‘we’, the responsible majority, support ‘them’, when they appear to be making no effort to help themselves? The ‘moral economy’ will come to seem ever so short on morality – in the sense of mutual concern and care in our dealings with each other (what a quaint idea!) – and much longer on the economic calculation of every individual’s worth in a meaner, harder world.