Thatcherism, Monetarism & Fuck You-ism in 1980s Britain.
Above Photo: A woman sits on a bus in 1980s Liverpool (Tom Wood)
Readers of Bombed Out! know that it’s a lot more than a Punk and New Wave memoir. Events in the book play out against a grim 1980s recession, mass unemployment and catastrophic economic and political forces that were laying waste to the city of Liverpool and many other towns and cities across the UK at that time.
So it was with interest that I recently read a superb article by Andy Beckett, which was first published in the UK’s Guardian newspaper. In it he talks to a right-wing 1980s Economist, Patrick Minford, who was one of Thatcher’s Far Right Economic attack dogs, who seemed to think experimenting with peoples’ lives was some kind of academic doodle, forgetting about the likely social consequences.
Oddly enough, Minford even lived near Liverpool and taught at Liverpool University. I vividly recall him tub-thumping for Thatcher’s economic policies on local TV throughout the 1980s while I was long-term on the dole and trying to find a way out. I thought he was a blinkered tosser then, and this article changes nothing.
I’ve illustrated the article with a lot of photos that, for me, capture Liverpool’s social and street landscape of the 1980s, and one I inhabited during the time chronicled in Bombed Out!, many by a superb Liverpool photographer called Tom Wood, who retains copyright in the photos.
By Andy Beckett
“For much of the postwar period, Britain imported more than it exported. The resulting trade deficits were widely seen as a sign of approaching economic doom; that a once-great trading and manufacturing nation could no longer make its way in the world.
In 1980, this pattern went into reverse. That year, and in 1981 and 1982, there was a rare British trade surplus in goods. Yet the economic commodity most valued by Margaret Thatcher’s often struggling first government was still an import. It was not an industrial product, but something much more modern; an intellectual product, a theory – monetarism.
The theory was laid out in 1980 in Free to Choose, a surprisingly watchable imported television series broadcast by the BBC, which showcased the thinking of the American radical right. It was presented and co-written by Milton Friedman a University of Chicago professor with deceptively merry eyes and a folksy drawl.
According to Friedman, the most acute problem of western economies was high inflation, which was principally caused by profligate governments “printing too much money”. The solution – monetarism – was for governments to control the amount of money circulating in their economies, by raising taxes or interest rates and cutting public spending.
Friedman went on: “Inflation is like alcoholism … the good effects come first. The bad effects only come later. When it comes to the cure, it’s the other way round. When you stop drinking, or you stop printing money, the bad effects come first, and the good effects only come later … [But] every country that has been able to persist with [monetarism] … has been able to cure inflation.”
A globe-trotting intellectual superstar, Friedman was too busy to work for Thatcher. Instead, much of the technical and intellectual support for this risky policy venture came from the tiny community of British monetarist academics. One of them was Alan Walters, a quietly spoken man with an icy-blue gaze who, like Friendman, had visited and supported the brutal but economically innovative Pinochet dictatorship in Chile. Walters became Thatcher’s chief economic adviser on 1 January 1981. Another was a former PhD student of Walters, with a voice like sandpaper and a machine-gun laugh, Patrick Minford.
At the start of the 1980s, Minford was teaching at Liverpool University. Once Walters started at Downing Street in 1981, Minford told me, “I was constantly in touch with him. I was providing him with consultancy on macroeconomics. I’d meet him at No 10. We would discuss unemployment; whether interest rates were too high – the overall economic situation.”
What Minford offered was particularly enticing, even in an increasingly competitive market for new Tory ideas: an analysis which seemed to prove that monetarism would work in Britain. He called it the Liverpool Model.
“Economics problems are just like engineering problems,” Minford explained to me briskly. In the late 1970s and early 80s, he went on, Liverpool University had a single mainframe computer. “In the social sciences, no one much used it. I kind of schmoozed the computer director. Computer directors always like to expand their empire, so he gave us [Minford and a few research assistants] loads of time on the mainframe.”
They used it to build a model of how he believed the British economy functioned. “We would set the model up, and then we would simulate it with shocks of various sorts” – such as changes in overall government spending, or in the level of welfare benefits, or tax rates or wages. “And then the data would speak.”
In a strikingly short 1981 pamphlet titled The Problem of Unemployment, Minford wrote: “Estimates based on the Liverpool Model suggest that a combination of a 15% cut in real social security benefits … and a reduction in the union [wage] mark-up to its level in the mid-1960s … would reduce unemployment in the UK by around 1.5m by the mid-80s.”
In a May 1982 lecture in the City of London, titled The New Classical View of the Economy, he made another large claim: “To cure inflation permanently, you require that cuts in public borrowing [and, therefore, public spending] and money supply be permanent … The cure can be effected with minimal disruptive effects … if a government with credibility in the pursuit of such cuts is expected.”
Minford’s zeal was reinforced by how he saw the city he taught in. Liverpool University is just north of Toxteth – or Liverpool 8, as residents preferred to call it, after its postcode. During the 19th century, when the city was one of the richest ports in the British Empire, Toxteth’s criss-crossed rigging of streets had housed merchants and sea captains, in terraced Georgian mansions of fine brick and cream stucco, set along boulevards with self-congratulatory names such as Upper Parliament Street.
But by the 1980s, this prosperous, prestigious world, like the sea captains, was long gone: bombed in the Second World War alongside Liverpool’s docks, half a mile downhill by the River Mersey; partially redeveloped after the war as low, boxy council houses and blocks; and partially left to rot. Most of the surviving mansions had been subdivided and rented out or simply boarded up. Flaking, damp, with buddleia sprouting like unkempt hair from their basements and back walls, the houses faced stretches of waste ground, where uncleared rubble from the war mixed with fly-tippings and dog shit.
Inhabited streets ended abruptly or degenerated into roofless shells, broken into and stripped for their lead and copper. Confident Victorian churches and public buildings – some functioning, some abandoned – stood like islands under a sky that seemed too open, too unobstructed for a city landscape. After dark, prostitutes used the shadows.
Between 1971 and 1981 alone, the population of Toxteth fell by more than a third. In extreme form, the area exemplified the wider decline of Liverpool. Since the Edwardian era, the city’s commercial zenith, its long chain of working docks – with their colonnaded quays and warehouses like palaces – had been thinning and corroding. Britain’s maritime trade had moved steadily to other ports on the east coast not the west, closer to Europe.
Since the 1970s, the factory jobs that were meant to replace the dock work had been disappearing too, with Liverpool plants increasingly regarded as disposable branch facilities by manufacturing conglomerates based elsewhere. Since the 1950s, Liverpool’s population had been dropping faster than in any other city in the country: from a peak of almost 900,000 to under 500,000 in 1981.
Much of Liverpool was still handsome, with its bright estuarine light and its steep city-centre hills, stacked with centuries of grand buildings from past booms. It still had cultural leverage and charisma, with its ongoing tradition of clever pop music from the Beatles to mouthy new bands such as Echo and the Bunnymen; and a quick-passing football team, Liverpool FC, that was in the middle of a period of unprecedented dominance of both the English and European games.
Yet all this swagger was, at best, inadequate compensation for, and at worst a distraction from, the depopulation and the decaying economy. Early 1980s Liverpool, even more than the country’s many other tatty, depopulating cities, could be seen as a warning: the fall of Britain writ large.
“It was just like having a case study on your doorstep,” Minford told me. “The British disease in its terminal phase. Productivity – hopeless. Union militancy – very strong. Living on benefits – the norm. I saw whole streets doing that at first hand.” On weekday lunchtimes, he and Liverpool University colleagues used to go to a pub on the northern edge of Toxteth. “You had to be a bit careful. But in many ways it was very instructive.”
Once he became known nationally as one of the government’s few academic cheerleaders, Minford had to be rather more careful. By the early 1980s Liverpool, previously politically fickle, was moving strongly leftwards, with the aggressive Labour splinter group Militant surging in municipal elections, and the number of local Conservative MPs rapidly collapsing. In his Toxteth pub from 1981 onwards, Minford said, more quietly than usual, “There was a bit of aggro.”
But then his impregnable grin returned: “Mostly quite friendly aggro. Liverpool’s a funny place … There was this kind of feeling: ‘He may be in the enemy team, but at least he’s in Liverpool!’”
Minford actually lived in Birkenhead back then, across the Mersey but only a few minutes’ drive away from the city. During 1981, he began to get anonymous phone calls. “‘We know where you are,’ sort of thing,” he said, quiet again, fiddling with the cap of a mineral-water bottle. “We got threats, so we went ex-directory. The police were alerted. We didn’t want to encourage people to turn up on the doorstep.”
Other political enemies were slightly more subtle. “I was regarded with a mixture of contempt and hatred by colleagues in the profession.” Minford waved a meaty hand: “I just wrote them off. I thought, ‘It’s lucky I don’t want to get a [university] chair anywhere else. I’ve got my chair in Liverpool. No one can stop me!’”
Later in our conversation, though, Minford conceded that the sheer scale of the shake-out in Britain’s jobs market had surprised him. The initial versions of the Liverpool Model had assumed, as did many Thatcherites, that the country’s “natural” rate of unemployment was low, and therefore purging the economy of inefficiencies with monetarism would mean, at worst, hundreds of thousands of redundancies – rather than millions.
“In the Liverpool Model, we were too optimistic about the speed with which the economy would … come right,” Minford admitted, “although we were closer than many of the pessimists.” Then he paused, untypically: “The bit we were way out on was unemployment.””
Buy a signed copy of Bombed Out! here: http://www.bombedoutpunk.com/buybook.php
Link to the full article here: http://www.theguardian.com/cities/2015/sep/14/toxteth-riots-1981-summer-liverpool-burned-patrick-minford-jimi-jagne