Countdown to war begins
THE WAY for an invasion of Iraq by the United States and its allies was cleared by the adoption on November 30 of a
UN Security Council resolution authorizing the use of force, if Irag does not quit
Kuwait before January 15
There can now be no doubt about Washington's Intentions. The first such resolution provided the cover for the
Korean War.
Today, It Is the bureaucratic regimes themselves, which speak in the name of socialism and anti-imperialism, that have directly given their endorsement to unleashing a holocaust against Iraq. Washngton has the explicit, If hesitant support of Moscow. Desperate to gain the acceptance of the capitalist powers, and even to assimilate to the capitalist system, the Soviet bureaucrats have cast aside pretences of supporting a struggle for a new world order. The Chinese refusal to vote for the resolution reflected nothing more noble than an interest in showing that It can defy international condemnation of its repressive internal policy, in any case, it gave backhanded support to the imperialist effort, abstainIng when it could have vetoed the resolution.
Now, nothing stands in the way of a tragedy, possibly of historlc scale, In the Middle
East, except the antiwar movements in the Imperialist countries and the nationallst ones in the Arab world. The US antiwar movement, draw-
Ing on the tradition of the mass mobilizations against the war in Vietnam, has already shown signs of taking off. It has gained considerable attention, therefore, from the mass media In the other Imperialist countries. The polls show that the American people do not want war, It is now essential to step up the antiwar mobilizations. They must, and can, stop the war, *
GULF CRISIS / BRITAIN
From Thatcher to euro-Thatcherism
BANX "I'll be glad when we have a classless society - 1 never could stand the poor." T HATCHER fell crushed between the resistance of the working class on the one side and the attempt to pursue a policy independent of European capital on the other. Her replacement by John Major represents the reorientation of British capital towards Europe, but it does not indicate a softening of the attacks on the working class. Quite the reverse — the rise of what can best be described as "EuroThatcherism" means a reorientation toward Europe but the retention of the same policies of mass unemployment and anti-trade unionism that characterized Thatcher herself. This time these attacks will be reinforced by Britain's recent membership in the Exchange Rate Mechanism (ERM) of the European Monetary System.
Underlying Thatcher's resignation and the divisions within the Conservative Party and ruling class which it reflects, was the disintegration of the economic project embarked on by the Tories in 1979. This involved an attempt to use the resources created by North Sea oil to impose a profound defeat on the working class while maintaining an economic orientation and political system rooted in Britain's imperial past — the dominance of the City of London, overseas investment and a military apparatus out of all proportion to the real strength of the British economy, all at the expense of undermining the UK's domestic economy.
For two years after 1979, the Thatcher government allowed British domestic manufacturing industry to collapse. Brit-
THE RESIGNATION of
Margaret Thatcher as British
Prime Minister and her replacement by John Major is the most dramatic explosion in the Tory [Conservative] party for over a decade. The removal of Thatcher signals the end of a particular project of the bourgeoisie and the beginning of a reorganization of British politics. JAMES BROOK ish manufacturing fell by more than 15% — the greatest decline since the aftermath of World War 1. All restrictions on the export of capital were lifted and a net outflow of $200bn took place over the next decade. The balance of payments was funded through North Sea oil revenues and booming financial services. Unemployment soared to over three million on official figures and four million in real terms.
Simultaneously a major reorganization of the UK's domestic economy was undertaken. A programme of privatization began - including telecommunications, steel, the ports, gas, electricity and water. Trade union laws were tightened, with restrictions on picketing, the outlawing of the closed shop [compulsory trade union membership], and the seizure of assets of unions engaged in industrial struggles. Specific groups of workers — above all the miners, but also the steelworkers, dockers and printers — were singled out for exemplary defeat. On the political front, the Labour Party split in 1981 with the formation of the Social Democratic Party — the majority of which went on to fuse with the Liberals after the 1987 election.
After initial hesitations, the ruling class united behind the government's economic programme. British financial capital gained from the widening of the scope of its international operations. The oil companies — a major sector of British capital - gained from the North Sea oil boom. Major manufacturing sectors began to rap 3 idly diversify investment abroad-
BRITAIN around 50% of the profits of the top 100 UK firms now come from overseas operations. At the same time the government's calculation was that the resulting unemployment would crush the resistance of the working class, and, on that basis, the domestic manufacturing base of British capital would be rebuilt together with the profits of its manufacturing firms.
Initially, this strategy worked brilliantly for capital. The share of GDP accounted for by company profits soared from under 12% in the depth of the recession in 1981 to over 19% in 1984.
At the same time the revenue from North Sea oil allowed a substantial increase in the living standards of a large proportion of the employed working class — real wages rose by 27% in the decade after 1979.
The working class was split between a large section hit by unemployment and its effects, such as low pay, and another part gaining economically from Thatcherism. In both the 1983 and 1987 general elections, substantial sections of high-paid skilled workers swung to vote for the Conservatives, while, on the other hand, riots broke out in the most deprived inner cities in 1981. With Labour devastated by the 1981 split, Thatcher won three consecutive general elections.
Boom and Thatcher collapse together
But the Thatcher government's economic policy was a product of the rise in commodity prices and the international financial boom after 1979, and it began to collapse with them. The oil price collapse of 1985 severely affected the balance of payments. In the stock market crash of 1987 UK capital lost almost a quarter of 190l A capital lost almost a quarter of its overseas assets.
Sectors of UK capital oriented to oil and international financial operations were no longer able to take the strain of financing the UK balance of payments, which after 1987 has deteriorated into the worst deficit in British peacetime history. Furthermore the huge outflow of capital began to undermine the domestic economy. In 1989 the net outflow of long term capital was $40bn, 6% of GDP. This required foreign borrowing of $40bn, attracted by high interest rates which rose to 15%, with a devastating impact both on UK investment and on the Tory Party's electoral support amongst homeowners with mortgages.
Most fundamentally, despite terrible defeats inflicted on particular groups of workers in struggle — with the number of steelworkers cut by over 50%, the number of miners by 60%, and total defeat of the port workers — the working class was not beaten down severely and comprehensively enough to allow the sustained rebuilding of the profits of domestic industry. In 4 1988 railworkers, and in 1989 local government workers, defeated the government. In 1990 most of the major engineering employers were forced to concede a reduction in the working week from 39 to 37 hours after selective strike actions by unions. The working class was able to resist the attempt to cut its living standards and from 1989 on company profits plunged as the working class successfully defended real incomes - company profits fell from 17% of GDP in mid 1988 to 13% by mid 1990.
Government unpopularity deepened as mass opposition to the poll tax developed. By the beginning of 1990, a sharp economic recession was setting in. The UK economy had arrived in an impasse, both domestically and internationally.
But, while the decisive factor which broke Thatcher was her inability to grind down the working class, the immediate occasion for her resignation was the crisis of orientation provoked by this former fact inside the ruling class in its relation to the EEC.
In the period of the oil boom, Britain's North Sea oil reserves were a major asset for the EEC and also allowed the UK to run trade surpluses with almost all EEC countries. The UK was in a relatively strong bargaining position - achieving significant reductions in its payments to the EEC budget. Thatcher was therefore at first able to maintain a relatively strong position for British capital within the EEC hierarchy despite the run down of the domestic economy.
But with the collapse of oil prices, the UK's bargaining position collapsed also, and the already dominant position of Germany and France was further strengthened. Given Britain's weak domestic manufacturing economy, Thatcher understood that the UK could not partici-
PANCH O
International Viewpoint #196 • December 10, 1990 pate in the moves towards greater monetary harmonization undertaken by France and Germany without immense economic and political difficulties. The traditional petty bourgeois economic base of the Tory Party would furthermore be destroyed by moves towards European economic union. In the 1989 elections to the European parliament, Thatcher attempted to consolidate the Tory Party around a "Gaullist" attitude to Europe.
But the result was a double debacle. British capital, for which participation in the post-1992 European system is more important than the Tory Party's electoral considerations, found Thatcher's policy unacceptable. Thatcher's Chancellor of the Exchequer [Finance Minister] Lawson, resigned over Britain's delay in joining the ERM. Michael Heseltine, one time defence minister - who had resigned from the government in 1985 because he favoured selling the Westland helicopter company to a European as opposed to a US firm — had steadily built up a proEEC leadership challenge within the Tory Party.
Decisive defeat in Euro-elections
Second, the working class was concerned by the deteriorating economic situation, particularly rising inflation and the effect of high interest rates, rather than Thatcher's grandiose dreams, and was by this time turning decisively against the government. In June 1989, in the European elections, Thatcher suffered her first defeat in a nationwide election.
From autumn 1989 onwards, the writing was on the wall. A token candidate was put up against Thatcher for the Tory Party
leadership in October 1989. A series of Cabinet [the inner-circle of the Government] resignations took place throughout the following year - including that of Thatcherite industry minister Nicholas Ridley following his anti-German outburst. Finally, the resignation of the deputy prime minister, Geoffrey Howe, over Thatcher's refusal to endorse plans for economic and monetary union put forward at the EEC's Rome summit, precipitated Thatcher's downfall.
Confronted with this debacle all three of the challengers for the succession to Thatcher - Chancellor of the Exchequer John Major, Foreign Secretary Douglas Hurd and PLANTE Michael Heseltine - proposed, in different degrees, to rationalize the government's activities in a common direction — eliminating the most extravagant anti-working class provocations, notably the poll tax, and improving relations with the EEC.
But the removal of Thatcher does not represent a shift towards a new and less severe economic order. On the contrary, the core of the policy will be an even more severe drive to force down wages. This is to be achieved through increased unemployment and closer integration with West European capital. This is clear from the policies proclaimed by all sections of the Tory Party, and most notably the new prime minister, John Major. All propose to "build on the achievements of" Thatcher, not eliminate them. No one has suggested altering the anti-trade union laws — except to further tighten them. No one has talked about reversing the privatizations. No one has proposed to tackle mass unemployment.
The one new policy of the anti-Thatcher camp in the Tory Party was to still further tighten the screw on the working class through ERM membership. This, indeed, will mean stepped up attacks on the working class — leading to a rapid new surge in unemployment and a sustained attempt to reduce real wages.
Thatcher herself was removed because she opposed capital's turn towards Europe and combined this with bourgeois triumphalist attacks on the working class, such as the poll tax, which went beyond what was politically sustainable in the class relation of forces in Britain.
John Major, who was the preferred candidate of both the Thatcherites and big business (he was endorsed by both the Financial Times and the Times) supports acceptance of the turn towards Europe but, at the same time, wants to negotiate the best position for British capital within it. He is Thatcher's ex-chancellor and will maintain her attacks on the working class.
BRITAIN
THAT'S ALL? • VPo -SORRY THAT'S THATCHERISN Major is as hardline as Thatcher on the economy and the market but he does not share Thatcher's ideological opposition to Europe — despite the Thatcherites endorsement of him.
He brings the Tory party into line with the goal of integrating Britain with big European capital whilst pragmatically defending the specific position of British capital within this. Rather than putting forward the messianic British vision of Thatcher, he aims to defend the specific interests of British capital within a European framework.
The same applies on the social level. Major's policy means trying to drive down real wages, but without some of the specifically Thatcherite excesses - for example, he has gone out of his way to declare his commitment to the National Health Service. His opposition to the death penalty is well known and, unlike Thatcher and many of his own Thatcherite backers, he has in the past strongly opposed racism.
Attack on living standards planned
But despite the short term honeymoon for the Tories that will follow Thatcher's replacement, the fundamental political problem for British capital is that the attack on working class living standards implied by the present state of the UK economy and ERM membership is so severe that no government implementing these policies can hope to be popular. Current economic conditions and ERM membership would also destroy the support of a Labour government carrying them through. The problem for capital, therefore, is how to carry through a policy whose effects will be rejected by an overwhelming majority of the electorate under any government.
The answer for capital is that every party in British politics must be committed to support for current economic policies and, in particular, membership of the ERM. The latter must be an issue placed by all party leaders above "questioning". The Tories must carry the policies through regardless of the electoral consequences. Labour must be forced to promise to maintain such a policy if in government even though it would eliminate any basis for reforms. Such "Euro-Thatcherism" in reality Euro-natcherism in reality will require a radical reorganization of the political system. Thatcher's downfall indicates we are coming to the end of an era in British politics -that of an alternation in government of a dominant Tory party and periodic right wing partv and periodic right wing majority Labour governments. Such a system had its base in the strength of British imperialism. In foreign policy terms it rested on Britain's "special relationship" with the United States - on whose role in stabilizing the international capitalist system the security of British overseas investment depended. The stable and subservient British Labour Party has existed as a part of this imperialist system. But this economic system has been in steady decline for the entire twentieth century although Thatcher made a last attempt to save it using the bonus of the resource of North Sea oil.
In the end the balance sheet of Thatcher's premiership is clear. She failed on all her own strategic objectives. Despite the North Sea oil and the disarray of Labour she never succeeded in increasing the Tory vote. She failed to make the domestic economy internationally competitive. Her government disintegrated amid the pressure of working class resistance on one side and the new projects of the BEC on the other.
Major will equally fail because, in essence, his economic project amounts to reorienting British capital into Europe, but trying to maintain Britain's imperial edifice in place. This combination, as with Thatcher, is more than the British economy can sustain. British capital is reaching the end of an historic road — the economy is beyond mere tinkering and even to achieve capitalist economic rationality a radical break with the imperialist past is required. . The insoluble problem for Major, and any Conservative leader, is that such a reorientation collides precisely with those sections of capital on which the interests of the Tory Party are most firmly based.
Amid Thatcher's fall the outline of what in the longer term will be a new party political system is therefore shaping itself in Britain. The firmest defenders of the European option in Britain are the Liberal Tory pray and roe right in or the 5 Democrats, the pro-European wing of the
PEN-
SIONS
BRITAIN / IRELAND Labour Party. The bourgeoisie must now Iry to create a system of government which gives permanent hegemony to these forces through Tory or Labour governments and finally through Tory-Liberal or Labour-Liberal coalitions. That will require ending the first past the post electoral system based on Tory pre-eminence and a shift to proportional representation and coalition government. This would be a shift to a "European" political system.
Such governments would maintain in place the essential anti-working class policies of Thatcherism while integrating British capitalism into Europe. The interests of capital have and will also make new demands on the Labour Party under Kinnock — to tie Labour into pro-European capital, to bring in proportional representation, to sever the link with the unions, to break the left in the party, to bring Labour to accept coalition with the Liberals.
The other side of the undermining of the traditional political system is that the intensity of the attack on real wages necessary for UK capital to compete in Europe finally threatens the stability of a rightwing Labour government carrying out a "pro-European" policy.
Continued resistance to Labour right
Resistance to Kinnock in the trade unions and Labour Party, with the left weakened but not eliminated, continues to disturb capital. The latter's goal of eliminating Labour's deep structural links with the unions and reorganizing it as an essentially West European social democratic party has still not been reached.
The differences in the Tory party are not over how much, but merely over by what means, to attack the working class movement. Tactical miscalculations such as the poll tax may or may not go, but the core of Thatcher's policies will continue.
Taken overall, despite the failure of her own project, Thatcher played a decisive role for the bourgeoisie in attacking the working class — she was undoubtedly in this respect the most successful prime minister since the inter-war period. Under the impact of the split in 1981 Labour moved decisively to the right. The trade unions have been weakened. Thatcher's successors aim to build on these achievements for capital by integrating British capital more clearly into Europe while maintaining the scope of her attack on the working class — a policy to be pursued by Tory, Labour or coalition governments.
There is undoubtedly widespread popular satisfaction that Thatcher has bitten the dust. But Euro-Thatcherism will turn out to be more vicious than Thatcherism mark one.
At the same time, Euro-Thatcherism will confront a working class encouraged by the downfall of its most hated enemy. 6 Britain is entering a period of intense class struggles. * International Viewpoint #196 • December 10,
A bad result for the big bourgeois parties A NEW shockwave hit the Irish political system with the election of Mary Robinson as President of the 26 County Southern State following a three-way contest on November 7.
Robinson, a non-party feminist and civil rights lawyer backed by the Labour Party, Workers' Party, and the Greens, took 38.9% on the first count and then went on to defeat the nominee of the governing Fianna Fail party Brian Lenihan by over 80,000 votes on the second count.