Can anyone cite libertarian economic policies being a success in a real country?

[Filuwaúrdjan]

Both Thatcher and Pinochet laid down the foundations of the booms that followed in the UK and in Chile.

The issue with any economic boom is who benefits. The trouble with the various post-Thatcher financial services/consumer spending driven booms is that large parts of the country did not benefit in any meaningful way, though they have always taken a knock in the subsequent recessions. Most of the old industrial areas were significantly better off in the worst years of the 1970s than they were in the best years of the 1990s. The coalfields went from being models of working class stability with advanced civil societies and communal networks (the NUM paid for everything from cricket pitches and adult education to subsidised beer and, obviously, cheap coal) to unemployment traps with serious drug problems in less than ten years; and this wasn't just because of the pit closure programme, but because most of the new manufacturing facilities that had been established to replace jobs lost by 'rationalisation' in the 1960s shut as a consequences of the government's economic policies in the early 1980s. Already declining industrial cities like Liverpool came close to collapsing entirely, and even better off industrial areas like Birmingham were hammered. In the booms, the decent jobs lost were often not replaced at all (the unemployment rate in Aston, an inner city district in Birmingham, was 24% in 2001) or were replaced with low-paid jobs in the public sector or by low-grade service sector occupations. Meanwhile, manufacturing continued to decline as successive governments (of all parties) continued to favour the financial services industry over the rest of the economy, a state of affairs that didn't change until 2008. And, of course, the policies that led to much of this - the second Harrying of North that is and not the later booms - were actually abandoned by the Thatcher government as a failure in the mid 1980s. The booms were a straightforward result of deregulation and various policies aimed at encouraging consumer spending, not the result of the policies pursued in the early 1980s. This is, by the way, all very well documented, although any opinions are my own.

My point is that while there were winners - the reality is that much of South East England and the West End of London even now are more prosperous than they were during the 1950s and 1960s - there were losers, and ten of millions of them. This is what politics is actually about.

You must be logged in to read this quote.

Irrespective of whether it was a good idea or not, remind me again which government made the switch to monetarism in Britain?

[Gustaf]

Al, I'm not saying that the way it was done was the best way. It most likely wasn't. And I appreciate, at least intellectually, that the social costs in many of the communities that were struck were huge.

Still, it is my opinion that the welfare state of the 50s and 60s, with everything that society entailed, wouldn't have lasted regardless. The discussion on that would be long and have very little to do with libertarian economic policies, so I'm not sure whether we should launch into it. Most of what I would have to say would be based on what I know of Sweden, but I suspect the overall patterns are broadly similar.

Partly it's about economic change. And then I don't mean change in policy, primarily. With the way the 3rd world has developed and with the way technology has developed all those manufacturing jobs were never going to stay. With the addition of machinery in production there is much less need for coal miners or factory workers and in order to have such a job you need a lot more education than what used to be the case. This obviously hurt a lot of people, predominantly working class males. Not just economically, but probably even more socially. In Sweden I suspect the end of conscription largely contributed. There are a lot fewer ways today for a young man from the working class to find self-esteem and be good at something. And then of course we have industrialization in countries like China and India, which I fundamentally think is a good thing. These people have a right to economic prosperity which is at least as strong as ours. And then we end up with all of these depressed areas that used to rely on some factory that may have shut down business and moved overseas but that, even if it is still around, can no longer support an entire community.

And then there is a lot of other stuff involved as well, such as the breakdown in social cohesion that I think has also hurt the working class a lot. My dad has described the feeling of pride in being a worker that he grew up with, where his family and their friends actually looked down on, even pitied, the upper class for being morally inferior. That feeling is gone today, and I think that has more to do with 1968, secularization, the internet and a lot of things independent of any economic policies.

A lot of things have certainly been lost over the last decades, some of them very good. I still believe that in a global perspective things have gotten better in many ways. In material terms I suspect most people are better off today and in social terms you have to weigh the losses in collective culture against the larger degree of individual freedom that I think people have today.

After googling it seems like Callaghan introduced monetarism so I suppose that is what you're referring to. That's interesting and it might mean that Labour would have fixed the problems had they stayed on. Again, my point isn't so much that Thatcher was necessary as that some of her policies were. It's fully possible that she went too far - I'm not really familiar enough with British politics to say. My point is rather that had Callaghan stayed in power and really managed to bring down inflation it would have been painful. Forcing down inflation expectations is difficult.

I'm not sure whether the above is nothing other than a rant, but it was supposed to be a reply to what you said...

[k-onmmunist]

Thatcher wasn't neccesary - she ruined this country's economy for good by putting millions out of work and making us dependent on trade.

[Gustaf]

Thatcher wasn't neccesary - she ruined this country's economy for good by putting millions out of work and making us dependent on trade.

She made you dependent on trade? Excuse me while I laugh myself to death.

[Filuwaúrdjan]

Al, I'm not saying that the way it was done was the best way. It most likely wasn't. And I appreciate, at least intellectually, that the social costs in many of the communities that were struck were huge.

Not only was it not the best way, but the signature policies themselves weren't even especially successful (so many things were fudged and re-designed behind the scenes in the early 1980s that it would be funny, were it not for the millions of job losses). Monetarism itself was eventually abandoned by the Thatcher government, of course. Which is where we get back to the issue of later 'booms'; the first one was, in part, caused by Lawson's decision to ditch monetarism, combined with financial deregulation and the like.

You must be logged in to read this quote.

Nothing ever lasts. But, yes, the 'Golden Age of Capitalism' was clearly over by the mid 1970s and much of what had been built around it was less than entirely secure without it. Not disputing that.

You must be logged in to read this quote.

These are long-term shifts. In Britain in the early 1980s a massive number of manufacturing jobs were lost in about eighteen months; I don't have the figures in front of me because of my inefficient filing system, but it was at least a fifth and may have as much as a third (memory fuzzy). The impact of that was horrific, as you can probably imagine. This was a direct consequence of policy decisions (basically the decision to over-value the pound meant that British industry - which did admittedly have long-term structural problems as a result (perhaps ironically) of early industrialisation - became, briefly but devastatingly, utterly uncompetitive) and has to be considered as distinct from long-term shifts. The mining industry is a separate case and directly political, of course.

You must be logged in to read this quote.

It's all connected, though. Not that I'm in much disagreement with you on this, I suspect. The movement towards cultural individualism and consumerist commercial mass culture (I like Richard Hoggart's distinction between mass culture and popular culture and think it's a shame it isn't widely used) had been mostly negative in working class districts and would have been even had economic change been less traumatic. But traumatic economic change greatly increased the damage (as well as the stuff it added on its own).

You must be logged in to read this quote.

That mostly depends on how things are measured. Though it's enough to say that a lot of people are, a lot aren't and we know who's in each group.

You must be logged in to read this quote.

Well, that's the interesting question, isn't it? Do people have more individual freedom than they used to? Some groups clearly do, but in general I'm not sure.

You must be logged in to read this quote.

It was already painful and was the main reason why Labour lost the 1979 election; the Winter of Discontent was fundamentally a revolt of low-paid public sector workers against a decline in living standards forced on them by anti-inflationary policy. In the election itself there were especially strong swings from parts of the electorate that had faced similar pressures, especially at the upper end of manual wage-earners (people working in the car industry in particular).

[Filuwaúrdjan]

Thatcher wasn't neccesary - she ruined this country's economy for good by putting millions out of work and making us dependent on trade.

She made you dependent on trade? Excuse me while I laugh myself to death.

Didn't you know? Before 1979 Britain was a bastion of protectionism and autarky. You can't trust people who say else; they're probably Tories or revisionist social fascist traitors.

[k-onmmunist]

Thatcher wasn't neccesary - she ruined this country's economy for good by putting millions out of work and making us dependent on trade.

She made you dependent on trade? Excuse me while I laugh myself to death.

Didn't you know? Before 1979 Britain was a bastion of protectionism and autarky. You can't trust people who say else; they're probably Tories or revisionist social fascist traitors.

I didn't mean it in that way. I mean that we used to be able to produce some of the goods we need ourselves. Now we don't produce anything.