Part five of a forthcoming book called Collected Essays.
****************
The 1950s and 1990s were prosperous but complacent decades, as they
assumed that prosperity would continue indefinitely. The economic
structures of both decades were drastically different. In the 50s it
was statist and interventionist whereas the 90s encouraged
privatisation and deregulation in the economy. British Prime Minister
Harold Macmillan claimed that ‘you have never had it so good,’
but he was also preoccupied as to how Britain could maintain full
employment, high wages and economic growth without unleashing
inflation. Also, Britain did not modernise sufficiently well and this
would create problems in subsequent decades. Countercultural
movements emerged which satirised complacency in British society.
Meanwhile, the 1990s produced unheralded levels of growth, as
globalisation was starting to bring third world countries out of
poverty. Governments increased financial deregulation, which was
perceived as prudent. Like the 1950s, it was assumed that prosperity
would continue indefinitely, but this was shattered with the
financial crisis of 2008. It was also assumed that liberal values
could be exported to countries in the middle east, but these ideas
were undone by the invasion of Iraq. Like the 50s, the 1990s also
produced acerbic satire which mocked the self-righteousness of
political movements. This essay will examine how the 1950s and the
1990s were complacent decades which created problems.
The 1950s were a period of unprecedented prosperity for Great
Britain – and, indeed, for much of the western world. Harold
Macmillan claimed that ‘we have never had it so good’ [1]. The
Labour government had previously achieved full employment, economic
growth and increased production after the war. However, the
Conservatives lifted rations, consumerism increased and the coal and
steel industries boomed, which resulted in economic growth of 2.2% in
1958 [2]. Macmillan had always been on the left of the Conservative
party and had been scarred by the unemployment of the 1920s and 30s.
Unlike most of the Labour Party, he did believe that individual
enterprise was necessary to create wealth and redistribute it to the
needy. However, he believed in government intervention to manage
consumer demand and therefore maintain high employment. He made this
particular speech because he was worried that the unprecedented full
employment could cause prices to spiral and affect employment [3].
Nonetheless, employment had exceeded the targets set by Keynes and
Beveridge.
The boom of the 50s was unlike the economic booms of the 80s, 90s
and 00s, as British industry was exporting more. Indeed, this was the
last economic boom that depended on manufacturing. Up to the 1950s,
Britain was an industrial powerhouse and made up a quarter of the
world’s exports. Now, however, it makes up 2% of the world’s
exports. It made up a third of the nation’s output and employed 40%
of the workforce. Later economic booms were over-reliant on
overinflated financial services [4].
After the Second World War, governments made a concerted effort not
to return to the poverty and inequality of the 20s and 30s. As such,
they created ‘welfare states,’ which had largely mollified
poverty. Macmillan continued a policy of full employment, building
several factories in poor towns. Macmillan encouraged investment by
encouraging car manufacturers to expand their facilities away from
the West Midlands and into less industrialised locations such as
Merseyside [5]. Also, the Conservative government had an excellent
record on housing, having built on average 300,00 houses per year in
this period. The Conservatives acknowledged the advantage of the
mixed economy and recognised that, if they built more social housing,
that it would also encourage investment in the private sector [6].
However, child poverty and elderly poverty had increased and wages
were rising in ways that adversely affected lower ones. As such,
poverty had increased, relative to the prosperity of the time.
However, higher life expectancy rates meant that elderly people
struggled with their pensions. Coupled with rises in inflation, this
meant that a quarter of elderly people needed National Assistance
[7]. Beveridge’s other target – the complete elimination of
poverty – had not been achieved completely.
The post-war economic recovery was statist and the economy at the
time was much more interventionist. The ‘consensus’ that emerged
after the war encouraged greater intervention in the economy to
incentivise investment and planning. Public spending went up under
Macmillan, which caused health secretary Enoch Powell to rail against
the Conservative government's policies. Powell wanted to bring
inflation down at all costs, but the economic orthodoxy of the day
was different. However, Macmillan did introduce a mildly deflationary
package – in other words, he brought public spending down – to
protect pound reserves. However, Macmillan contravened the quantity
theory of money when he stated: ‘[Inflation is not caused by] a
control of the money supply,’ which was seen by Roy Harrod ‘as an
antiquated doctrine’ [8]. The Conservative government thought that
unemployment and stagnation were worse prospects than mild inflation.
However, by 1959 inflation went down to 1%, its lowest rate since the
war. Hence, Powell’s prescriptions seemed nonsensical, as Britain
was at its most prosperous, there was economic growth and the
generous benefits, pensions and housing had created a fairer and more
generous society. According to Sandbrook, monetarist historians had
overlooked how the Conservative governments from 1951 until 1964 were
determined to stop the unemployment and class divisions of the 1920s
and 30s [9].
The economic ruin bequeathed by the ‘laissez-faire’ model of the
1920s and 30s gave rise to ideas such as planning, which were
assiduously implemented by the Labour Party through rationing. There
were central boards which encouraged investment, which was a form of
‘planning.’ Throughout the 40s, 50s and 60s, Governments
increasingly set long term targets. Institutions were established to
reach these targets, such as the Economic Planning Board [10].
However, long-term plans were also set for social welfare, such as
the NHS Plan of 1962, Local Health and Welfare Plan of 1963 and the
Housing Plan of 1965 [11].
The economic prosperity of the 1950s posed a conundrum for the
Labour Party, as it had achieved most of the aims of its 1945
manifesto [12] and the Conservatives claimed that they could run the
welfare state more efficiently [13]. Many people in the rank-and-file
of the Labour Party thought that they might never return to power
ever again [14]. As such, this led to a lot of revisionism within the
party, most notably with Anthony Crosland’s influential book The
Future of Socialism (1956).
He claimed that the economic problem that the Labour Party were
trying to overcome had been solved [15]. It had achieved full
employment and social welfare whilst other objectives such as the
abolition of private property and increasing the power of the working
classes had become irrelevant [16]. He wanted Labour to drop its
commitment to socialist controls – that is, controls that plan
industry or ration its goods. Industry could be directed in the right
direction to increase profits and full employment, but it did not
have to control it, as this denied free choice and it created a
needlessly large bureaucracy to enforce it [17]. He claimed that
nationalisation was no longer a panacea. He revisited this theme in a
speech in 1973: ‘Nationalisation...does not in itself engender
greater equality, more jobs in the regions, higher investment or
industrial democracy’ [18]. The classical central tenet of
socialism – that the community must own the means of production –
had to be dropped. Instead of pining for greater public ownership,
Crosland urged the Labour Party to focus on improved public services
and the elimination of poverty. The objectives of social welfare were
to relieve distress and suffering, not to achieve social equality
[19]. It must provide greater equality of opportunity and, in this
regard, the Conservatives did not go far enough. In order to provide
greater equality of opportunity, Labour must abolish grammar schools,
abolish the eleven-plus and increase comprehensive education.
Inequality was wasteful, as it prevented social mobility.
Additionally, Crosland wanted to place strong emphasis on liberty and
the good life: ‘[the socialist] in whose blood there should always
be a trace of the anarchist and the libertarian, and not too much of
the prig and the prude.’ (20)
However, both parties were complacent, as British industry did not
modernise sufficiently well. After the Second World War, debt stood
at 225% of GDP [21]. However, subsequent Labour and Conservative
governments brought the debt down. Although borrowing had increased,
there had been budget surpluses and growth which allowed the
government to pay back some of its net debt. Growth averaged 3% and
inflation averaged 3.57% between 1951-64. By 1964, the debt had been
reduced to 110% of GDP [22]. However, the most pressing issue was
innovation in British industry, as it was not exploiting new
technological advances. Productivity in British industry was high in
the early 1900s, but other countries caught up in the 1960s and took
over by the 1970s. This was not reversed even until the end of the
twentieth century and Britain continues to have a productivity gap
with The United States and Europe [23]. Robert Skidelsky writes as to
how British industry throughout the 1950s and into the 1960s expected
to keep living off the empire. The Conservative governments from the
period, he claimed, did not try to modernise. Additionally, British
industries were under no pressure to modernise their plants or
upskill their managers or workers [24]. Despite the prosperity of the
1950s, this would spiral out of control in the 1950s and 60s. Labour
governments tried to implement an ‘Industrial Plan’ where they
tried to re-organise industry. This was finally discredited when Tony
Benn wanted to create worker co-operatives for Britain’s decaying
industries [25]. By the 1970s, companies such as British Leylands and
Ferranti were making enormous losses caused by mismanagement. After
the Oil Crisis, the Labour government started the National Enterprise
Board, which was meant to modernise British industry under the
direction of the government. The NEB had to deal with more companies
in trouble, but no improvement occurred [26]. Statism and
interventionism had been discredited.
On the other hand, the Labour Party governments of 1964-70 and
1974-79 have been described as ‘Croslandite.’ However, Crosland
later admitted that he overlooked in his seminal text as to how the
Labour Party could generate economic growth [27]. Indeed, he was
initially pleased as to how the welfare state had quelled capitalism
through greater union laws and regulations, as free-for-all
capitalism had been quelled by the mixed economy [28]. However, some
people claim that the post-war consensus – high taxes and
regulations – ended up stifling the British economy [29]. Some
people claim that its emphasis on the public sector – 49.7% of GDP
went towards public spending in 1975 [30] - stifled entrepreneurial
initiative [29]. Of course, the oil shock was the death knell to
Croslandite social democracy [31]. Unlike their mentor, Kenyensians
were later very inflexible as to how to tackle inflation [32]. As
such, governments across Europe, decided to prioritise low inflation
over full employment [32]. Monetarism emerged as the de rigeur
economic theory, which is the theory that the amount of money that
circulates in the economy should be proportional to the amount of
goods. Availability of money goes up, which increases economic
growth. However, an increase in the supply increases demand, so
companies put prices to meet this demand, which leads to inflation.
Hence, monetarists urge central banks to control the supply of money.
Also, monetarists lower interests rates because this brings the cost
of borrowing down and people can borrow to invest more, which also
leads to economic growth [33]. This economic theory replaced statist
Keynesianism as the prevalent economic doctrine. However, several
thinkers and politicians of the 1950s did not foresee how they could
preserve the statism of the day. Indeed, it was assumed that the
prosperity would go on forever [34], but it unravelled quickly.
Certain political and economic political attitudes were complacent
in the 50s. However, there were cultural movements in the 1950s which
were indicative of new changes and actively satirised complacency.
The first countercultural movement in the 1950s were the Angry Young
Men. However, the 1950s were largely a conservative, family-oriented
culture [35]. The Conservative governments from 1951 until 1964 were
‘paternalistic,’ meaning that they were meant to look after and
protect its citizens [36]. Despite this, Britain was becoming less
deferential to institutions like the monarchy [37]. The Angry Young
Men were the first countercultural movement that reacted against
this. The movement was manifold, but it was partly political and
religious. Its most famous exponent was Kingsley Amis, who published
Lucky Jim in 1956. Amis satirised the deference that was
prevalent in British culture. His novel covers a university in Great
Britain and its protagonist is forced to participate in its pomp and
circumstance to gain acceptance. The novel actively satirised British
institutions and pretensions. It sold very well and it was
controversial. As well as satirising British society and its
institutions, it also criticised Britain's attraction to continental
modernism and the avant-garde [38]. Meanwhile, Colin Wilson
popularised existentialism with his book The Outsider (1956).
The book appealed to the counterculture, as it glorified the idea of
the ‘outsider’ in art. Wilson represented the more religious
strand in the movement, as he later wrote a book entitled Religion
and the Rebel (1957). His
book mixed a plethora of disparate writers and thinkers, but it
helped bring contemporaneous continental philosophy to a British
audience. Crucially, Wilson came from a working class background and
had never been to university, which signified the rise of equal
opportunities [39].
The tail-end of the 1950s also witnessed the nascent beginnings of
Britain’s satire boom. Beyond the Fringe – comprised of
Peter Cook, Dudley Moore, Alan Bennet and Jonathan Miller – created
sketches which satirised toffs and in many ways prefigured Monty
Python. In an iconic moment, Beyond the Fringe performed
in a theatre with then-prime minister Harold Macmillan in the
audience and Peter Cook walked up to Macmillan and impersonated him
in his presence [40]. Beyond the Fringe and the Angry Young
Men segued into the decadence, radicalism and anarchism of the 1960s.
However, much of the satire of both movements was rather soft. Peter
Cook claimed that the real target of his satire was ‘complacency’
and that they were not interested in tearing down patriotism or
morality [41]. Indeed, Sandbrook writes that the impact of the
programme has been exaggerated and that only a small fragment of
society saw the programme when it was broadcast [42].
The 1990s resemble the 1950s in many ways, as it also was a period
of prosperity and economic growth. The children of the 50s
generation, the ‘baby boomers,’ came to power. Bill Clinton and
Tony Blair rebelled against the statist paternalism of the 1950s and
accepted the Thatcher/Reagan settlement [43]. Globalisation had
generated high levels of economic growth and wealth. The collapse of
communism appeared to confirm that liberal democracy had won the
battle of ideas. This also solidified laissez-faire, which had made a
come-back after the stagflation of the 1970s [44]. Europe had also
enjoyed its longest period of peace. As such, history appeared to
have reached a plateau, which led Francis Fukuyama to theorise about
the ‘end of history.’ Several ideas had been tried and tested,
but liberal democracy had won the battle of ideas. Fukuyama did not
claim that there would no longer be historical events, rather he
claimed that ideology had expired and that liberal democracy had
mollified political extremes [45]. Fukuyama was a Hegelian
conservative and Hegel was a thinker who believed that political
ideas were theses and antitheses which produced syntheses. In other
words, history has a purpose. Moments in history and political ideas
are all parts which add up to produce events. Certain political
events end when they have achieved their purpose, such as the Roman
Empire [46]. According to Fukuyama, liberal democracy had won the
battle of ideas and history had culminated, which led to the kind of
perpetual peace envisaged by Kant. This was a universal, liberal and
co-operative federation of states. Kant claimed that wars occur when
individuals self-interestedly disregard justice. Republics, united by
international law, would subscribe to a universal doctrine of rights.
Also, national barriers had to be overcome and nations would have to
co-operate [47]. The world in the 1990s was starting to resemble this
ideal. This global liberalism was Fukuyama’s notion of historical
culmination whereas for Marx it was communism [45].
Like the Kenynesian statism of the 1950s, there was also some
complacency in the 1990s. There were unusually high levels of
economic growth and it was assumed that it would keep growing. In the
USA, the economy grew on average by 4%, 1.7 million workers were
added to the workforce, the average income grew by 10% and the
poverty rate fell to an all-time low of 10% in 2000 [48]. Clinton and
Blair took financial deregulation further. Bill Clinton signed the
‘Financial Services Modernisation’ Act in 1999, which was
welcomed by most people and was not seen as reckless [48]. British
Labour chancellor Gordon Brown even spoke about ‘the end of boom
and bust,’ [49] which suggested that economic growth would extend
exponentially without a single recession. Brown also deregulated the
banks from the oversight of the Bank of England [50]. There were some
doom-mongers who claimed that this laissez-faire attitude would
result in a global financial meltdown, but these were a minority. Roy
Jenkins had been a Labour chancellor in the 1960s and proposed
Keynesian solutions to generate full employment as leader of the SDP.
However, he sensed that the financial deregulation could cause a
giant economic depression that mirrored 1929 [51]. Similarly, John
Gray wrote a book called False Dawn: The Delusions of Global
Capitalism (1998) in which he claimed that laissez-faire was
hubristic, debt-prone, created higher crime, broke up families,
created greater atomisation and that it would soon lead to a meltdown
[52].
However, laissez-faire globalisation was winning the argument in the
1990s whilst the left appeared to have lost it completely.
Globalisation had brought countries in Africa and south east Asia out
of poverty and starvation [53]. The left was beating the same tired
drum, arguing against globalisation and for greater protectionism.
Noam Chomsky sold less books during this period [54] and a figure
like Tony Benn became completely estranged from the Labour party
[55]. Labour embraced globalisation and rebranded itself as ‘New
Labour.’
The unprecedented wealth also led western countries to believe that
they should export western values and laissez-faire economics to
third-world countries. ‘Neo-conservatism’ and ‘liberal
interventionism’ became fashionable buzzwords during this period
[56]. British Foreign Secretary Robin Cooke spoke about an ‘ethical’
foreign policy [57]. George W. Bush was elected in 2000. His
vice-president Dick Chaney and his secretary of state Donald
Rumsfield were branded as ‘neo-conservatives.’ Neo-conservatism
advocates free market capitalism and an interventionist foreign
policy which exports this form of capitalism. Paul Wolfowitz promoted
the invasion of Iraq [58].
Like the 1950s, complacency towards the economy and foreign policy
soon started to generate problems. George Bush took financial
deregulation further [59]. This led to the biggest bust in economic
history, which meant that governments bailed out banks with state
money and accrued large deficits. Gordon Brown and Barack Obama spent
money on the economy and bailed out ailing companies [60]. Liberal
interventionism, which had been solidified by successful
interventions in Bosnia and Sierra Leon and genocides in Rwanda, also
led to chaos. The invasion of Iraq led to to Sunni/Shia sectarian
battles and a failed state [61]. Also, a power vacuum led to the rise
of ISIS and to a nascent Islamic caliphate across Iraq and Syria
[62].
Like the 1950s, Hollywood films from the 1990s reflect the economic
boom. Many films – such as Forrest Gump (1994)
– recreate a sense of economic freedom and a sense of optimism.
Like the British satire boom of the 1950s, there was a lot of satire,
which became more hard-edged and biting. It may have been reflecting
the prevalent complaceny. Bret Easton Ellis published his novel
American Psycho in 1991, which mordantly satirised the vapid
consumerism and individualism of the day. Programs such as The
Simpsons attacked sacred cows and everyone was on the brunt of
their attacks – conservatives, liberals, leftists, etc. South
Park took this iconoclasm further. Both programs were
controversial when they were first released. In the early 90s and
late 90s, schoolchildren who wore t-shirts of both programs were sent
home [63].
The 1950s were a prosperous but complacent decade. Conservative
governments did not modernise industry. The Labour Party’s
revisionist theories were too complacent, as they took economic
growth for granted. The prosperity of the era had made some of the
ideals of the Labour movement redundant. As such, it placed greater
emphasis on greater social mobility and equality of opportunity.
However, many of the assumptions, such as state planning and
intervention, had been dropped by the 1970s. The boom of the 1950s
was created primarily by manufacturing, but mismanagement ran most
British industries to the ground by the 1970s. Many people assumed
that the prosperity of the 1950s would continue indefinitely – many
people thought the same about the prosperity of the 1990s – but
proved illusory. Similarly, many assumptions of the 1990s were
complacent. Governments increased financial deregulation and it was
not seen as imprudent. Indeed, British chancellor Gordon Brown
hubristically claimed that the era of boom and bust was over. The
whole world was prospering in the 1990s and this led Francis Fukuyama
to claim that the ‘end of history’ had been reached. Fukuyama
believed that history had reached an apotheosis, that ideology had
died and that liberal democracy had won the battle of ideas. As such,
the world was starting to resemble Kant’s ideal of a universal
republic. However, this was also a complacent assumption to espouse,
as there were several conflicts in Kosovo, Rwanda and Sierra Leon.
Subsequently, a shadow banking system almost brought the world
economy down and governments had to bail out the banks. Foreign
policy ideas from the 1990s were also equally hubristic, as they
assumed that western values could be exported and imposed on other
cultures, but the invasion of Iraq tarnished these ideas. Finally,
the satire of the 1990s, like the satire of the 50s, also acerbically
critiqued the complacency of the era. The 1950s and 1990s were
similar decades in that they were prosperous, but they also naively
assumed that this prosperity would continue.
Notes
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4. Robert Skidelsky. 2013. Meeting
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5. Brian Marren. 2012. Class,
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28. The
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29. Colin Tahin. 1992. Two
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30. Simon Rodgers. 2010. Historic
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31. Jonathan Derbyshire. 2010. The
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39. Never
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40. Andy Parsons. Andy Parsons on
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42. Never
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45. Eliane Glaser. 2014. Bring Back
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