The policies of Milton Friedman are being implemented by the ConDem Coalition, and Labour isn’t even paying attention

I’m finding it hard to blog these days.  What is happening nationally is too depressing and Britain and the Left are sleep walking into the restructuring of British society.  No, I don’t mean the Big Society.  I don’t even mean severe cuts to public services.  No, something more fundamental is happening. 

Labour and media pundits agonise over aspects of government cuts, and Labour leadership candidates are obsessed about positioning themselves against each other.  Meanwhile the economic extremists in both the Tories and Lib Dems (David Laws having been in the vanguard and he will no doubt remain influential before returning to the Cabinet) are embarking on a programme of privatisation, dismantling the welfare state, and (in due course) tax cuts.

If anyone has read Naomi Klein’s brilliant ‘The Shock Doctrine’ will recognise that what is happening in Britain today comes directly from the philosophy of Milton Friedman.  Klein explains the concept of ‘Disaster Capitalism’ where there are “orchestrated raids on the public sphere” in the wake of a disaster or crisis, the crisis at this time being the near collapse of the banks and the ensuing economic crisis which is being used to justify just about anything.  And the Labour Leadership contenders fiddle while Britain is burnt.

Friedman wrote: “Only a crisis – actual or perceived – produces real change.  When that crisis occurs, the actions that are taken depend on the ideas that are lying around”.  Klein say that “some people stockpile canned goods and water in preparation for major disasters; Friedmanites stockpile free-market ideas”.  Friedman believed that once a crisis happens, it is crucial to act swiftly to impose rapid and irreversible change before society slips back into what he describes as the “tyranny of the status quo”.

Friedman wrote that “a new administration has some six and nine months in which to achieve major changes; if it does not act decisively during that period, it will not have another such opportunity”.

The ideas of Milton Friedman are alive and well and thriving in the Conservative Party and on the right of the Lib Dems.  Both Cameron and Clegg worked for Moneterist ministers in Thatcher’s government, and their economic philosophies have evolved since then.  The only difference is that their presentational skills have also developed to ensure that they are seen as ‘compassionate’.  But the political and economic intentions are just the same.  David Laws gave the game away when he said that he wanted the cuts he proposed to send shock waves throughout Whitehall. 

The Welfare State is being dismantled before our very eyes.  Education (as in the USA where Charter schools are taking over) is being privatised through the acceleration of Labour’s Academies programme.  In due course the NHS will be privatised.  And Cameron and Clegg’s friends (and also those of Blair) are ready for some very rich pickings. 

And the Labour leadership contenders continue to fiddle.

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14 Responses

  1. We simply cannot afford to waste and burn money the way labour did for the past decade.

    We private sector bods have been creating mountains of wealth for the past few decades, while the government have been taking it and destroying it.

    We don’t have the wealth we created and much of the public sector don’t have sustainable jobs – they just have ‘make work’ jobs to keep them off the dole.

    Labour have been evil, nasty, stupid, selfish, greedy and destructive. It will take generations for the wounds (that they inflicted on us) to heal.

    You can stick your head in the sand and pretend otherwise, but you can’t claim to be logical, sensible or rational while you do so…

    • I don’t agree fully with Paul Perrin. He repeats some ready-made phrases form some Brit parties during the election. Don’t try to understand New Labour in 2010. Understand Labour in 1997 after 17 years of Conservative rule. Labour picked up a serious economic downturn from the Conservatives then. With chronic under-investiment in transport, schools, NHS, Council, etc. How do you expect to run a modern society without those indispensables? And how do you expect to run Europe without engaging there as the Conservatives tried to do? Gross, really. But the true fact is that Cons-Lab has been ruling this country for the past 30 years and what have we got to show for it? A financial meltdown. It is stupid and too partisan to blame Labour for the current state of affairs in the Brit economy. Where are the manufacturing bases that we need to get us out of this hole? For 30 years according to Thatcherite wisdom there was no future in manufacturing so better give all those jobs to the Chinese. But in the meantime, Germany, France, Spain and Italy continued to produce great cars, planes, motorcycles (I got one), trains, washing machines (I have two). All stuff that the world wanted to buy. In the meantime, Rolls Royce one of our last proper car makers was purchased by the Germans together with the Mini (look how they transformed it) and Rover. Rover was take over by a Brit consortium. They couldn’t get out of it fast enough after making sure they syphoned as much money as they could. The only thing after thirty years that Briain show the world we had was the financial industry. The envy of the world, everybody agreed. All gone up in smoke. A folly that we are now paying for. But it was all Thatcherite economics. More suitable for the Cold War than the War on Terror. The only reason why I did not vote Labour again after 2003 was because the war in Iraq. With Labour we had better schools, better NHS, better trains, better Councils, better arts, better everything. OK. Yeah. Somebody’s got to pay for it. Us, of course. But we also have to pay for the financial industry and what are we getting out of it? Higher credit card charges for us and higher bonuses for them. So, enter the Conservatives and the Lib Dems. Anybody that thinks that George Osborne has any knowledge on how to be a Chancellor must get his/her head examined. The guy has not uttered a word for the past six months !! Sometimes I wonder if Cameron chooses his close allies by how they look. No doubt that Osborne and Clegg are good looking boys as Mr Cameron is too. But, It is stupid in the extreme to think that Osborne is going to bring any measure of relief to the economy out of his own ideas. Ask Vince Cable what he thinks of George Osborne. I do not deny that David Cameron has good intentions and that he is intelligent. So, while Labour re-gathers its forces and identify its targets, let Cameron muster some of his forces and let him get to work. But he will have to be open minded. He cannot rely on the past. Do you see any sign of that? Not much. I cross my fingers.

      PS: What we have seen in the last 30 years was an import of American economy behaviour and doctrine, spearheaded by the financial industry. The opposing model, the European, has been derided for decades. Now, let’s see what happens with the euro. We are in there too. The Europeans need good luck and and governance too, to get out of their hole.

  2. Hey Brighton Politics. I read your blog earlier. I sparked a few anti-Milton tweets like “Milton Friedman is a charlatan but it provided the excuse for a great transfer of wealth from the poor to the rich”. I thought that was neat of me. Your article is awesome. I can’t read it hard enough. So much so that I read it twice. But I know about MF already. I’ve got another tweet about MF going out soon. “Where are the Nobel Prize winner that during the 80s+90s prepared the ground for what we now know as ‘the credit crunch’. Neat. Keep up the good work. You’re awesome.

  3. I have MF well studied by empirically only. The guy was very persuasive when speaking to the relatively small minded. The people who needed easy answers to complex questions. The Reagan, Thatcher types during the Cold War. There are at least two problems. First, the fact that there is no competitive ideology. The demise of the Soviets an so on here. The new ideology has not been articulated yet. Naomi Klein talks about the fact that people’s always chose a public-private mix economy when they could choose. That is good there. But compared to Marx it’s really flimsy. It won’t dent the hedge-funders next balance sheet much. I’ve forgotten what’s Second, now. Maybe it was contained in the first. Ah! Yes! I remember it now. It’s not a joke to say that during the 80s and 90s the Swedish Academy of Sciences gave the Nobel Prize to Economics to every conceivable academic from the market economy camps. Just go to Wikipedia and confirm this. Easy. But the funny thing about it is that the Nobel Prize for Economics is not given by the Academy of Sciences of Sweden. It’s given by the Swedish Central Bank “in the spirit of” Alfredo Nobel. This is fishy indeed. They invented a category altogether. This category provided the meat from which many righ wing politicians fed since 1980. After 2000 some different economic thinkers started to get a look in. Joseph Stiglitz is one. He proposed as Naomi Klein type of economy. But I can’t honestl say Stiglitz is a great thinker. He’s just OK and well meaning. But I’ve seen him on Newsnight given a great opportunity to make a dent by Jeremy Paxman and he waffles his points. But, I am not a great student of Stigliz either. Striclty speaking about Cameron and Clegg you say something interesting in your blog. That they both cut their mustard in the Thatcher years. But more than this, take a look at who they represent, with all their good intentions. Cameron’s father was a broker and Clegg’s grandfather a banker. Nothing wrong with this. It’s just that it is highly improbable that these two are going to be champions of the working classes. The LIbDems under Clegg have not been able to get an MP from any other background other than Middle Class privately educated. No blacks, Muslims, East Enders, Asians. Nothing. In the case of Cameron, their only representative outside the norm is Baroness Farsi, who is not even an MP. With her the Conservative ticked a lot of social boxes and she is very happy to oblige. So chances that this government is going to try anything else other than ‘savage cuts’ is improbable. All they have been saying for two weeks is that “Labour has left the economy in a bigger mess than we thought”. But what can we do now? At the Parliament Square Peace Camp I saw a big sign waving in the wind that caught my attention. It read “BE THE CHANGE YOU WISH TO SEE”. This means, don’t look around for people who have changed. You are the one that is posing the question. You have a supporter here.

    PS: My Tweet phrase about a “great transfer of wealth from the poor to the rich” was actually pinched from Joseph Stiglitz so perhaps he’s not that bad.

  4. Hey, Perrin and Brighton Rock. Good night everybody! No hard feelings I hope. I enjoyed this!

  5. I agree about the demise of our manufacturing industry affecting our economy. I started work in 1968 when Norwich, for instance, was well supplied with factories for shoes, chocolate and clothes amongst others.

    The factories have disappeared and we are trying to rely on finance and service industries which a diminishing number of people can afford to support. Insurance companies are being taken over by foreign companies who cut back on hard-working staff thus cutting down the number of jobs available in the area; banks are doing the same.

    Please can we have our economy back? I do try to buy British goods but it is becoming difficult when hardly anything is made here any more.

    • The recent case of Cadbury is a good case study. A successful business is developed by the local British worker and it’s administrators. But if the emphasis is on greed, then greed by the administrators will overtake everybody else’s and the company will be sold. The administrator will earn a lot of money and the British worker will be out of a job because the manufacturing base went to Poland. It is not the job of the greedy administrator to worry about jobs in the UK. It is the British worker’s job to do that. Or the government’s job. But what if the government is in the hands of the greedy, which is the case of the UK and US economic model? The financial industry suffered a similar fate. In this case, the vasts amounts of greedy money that an administrator could make in 10 years stood him up for life. So he doesn’t care what happens to the business after that because he has no particular connection with the business as it is not his business. The moral of the story is that the greedy should not be allowed to take the reigns of the country because if this happens only one result is assured: bankrupcy of the country for the sake of the greedy which is exactly what happened in the US and UK, except that in both cases the worker had to fork out with his own future labour the bail-out of the country. The greedy got away with it because the balance of power was heavily titled towards him. He kept his cake and also ate it. Other theoricists will then use the argument that if we don’t ship the jobs abroad or if we don’t lower the salaries or if we don’t work in efficient industries at the end of the day we will also go bankrupt, which, as they say, what happened in the UK in the 70s. But we must be weary of this kind of arguments because they benefit the tribe of the people who say it. However, that’s where we are today.

  6. http://www.touchstoneblog.org.uk/2010/06/a-question-of-power/ This is an interesting article that can be used to counter the anti-social view of the world proposed by Milton Friedman.

  7. Truth is that Milton Friedman was talking about what human beings are really like. As long as everything is going along ok, the vast majority of human beings won’t make the changes they need to. This applies to government, which is a body of humans. It’s only when a crisis happens that there is the real motivation to change, even though we know we should have done it years ago. It will be same with climate change. We all know (well, most of us) that it is happening and that the consequences are dire but, until something really bad happens, we’ll only motivated to tinker at the edges. I reckon it will take large scale flooding of London until real changes are implemented.

    • If your theory was correct, then after the financial meltdown thighs should’ve changed. They didn’t. This is because certain powers within government manipulated events to suit the status quo. We then devised the bail out. Not so much here as in America.

      It was not panic that devised the bail out. It happened because deep inside power in the White House were people who supported the status quo. So the money was paid (800 billion) and no questions asked.

      Those people are now enjoying their bonuses while the rest of the US and UK pick up the bill.

      Where was change when it was needed? There is more than meets the eye.

  8. In recent blogs and articles I have discovered a possible solution. It’s contained in the article http://www.touchstoneblog.org.uk/2010/06/a-question-of-power/.

    In this artilcle, Henry Tam is careful not to fall into the traditional references of workers and capitalists. He has moved on from the 70s.

    Herny Tam uses a distinction that was always there but unused. It is the distinction between the powerful and the powerless. Which, in the end, it’s the root of what we see today.

    He asks that in any social, political, financial or economic agenda we should ask first ask: does it contemplate redistribution of power?

    The UK is a case in point. David Cameron tells us that “we are in it together” when he wants to implement new cuts.

    But within this planned social change there is absolutely NOTHING than would include any kind of redistribution of power. In fact, the last time there was any kind of democratic gains for the UK voter was when women were allowed to vote back in the 30s. Democratic progress has stood still since.

    So if the UK voter is asked to bare the brunt of social change, we must make sure first that a redistribution of power accompanies that change. After all, the people in power before were the ones that put us in this situation; in this case, the entire financial edifice of the UK and US.

    Michael Moore in his film ‘Capitalism: a love story’ is careful not to intrude in old concepts. He also calls for a redistribution of power but he does not call it ‘socialism’, which brings up mixed emotions, particularly in the US.

    Michael Moore calls it DEMOCRACY. Indeed, both words should be virtually indistinguishable. But the word ‘democracy’ seems to have been taken away by the very people who are intent in preserving the status quo, their power.

    The unspecified use of the word ‘democracy’ by many of our leaders was a Cold War tactic when we were fighting communist dictartorships in Eastern Europe. But that was 20-30 years ago. Now, there is no democracy without full engagement of the people and this means redistribution of power. Power to the voter, power to the citizen.

    When there was a mass demo in Eastern Europe we called it ‘people’s power’. When there is a mass demo in the UK, it is simply ignored. Our leaders should not ignore mass demos as they should not ignore a vote every five years.

    Democracy still means power of the people, like 3,000 years ago. It has nothing to do with economics.

    It still means being in favour of the true exercise of social liberty through the vote, discussion and democratic changes to the system; as well as economic liberty.

    Somehow, social thinkers tried to convince us that ‘there is no such this as society’. They were asking us to ignore the fact that there are powerful and powerless in society, with their own interests. The former surfaced their ugly head in the recent financial crisis and we all saw how they got away with virtual financial theft (some MP expenses and some bankers).

    It is time to improve the democratic accountability by giving more power to the powerless. Power should not be hereditary in this day and age.

    When tradition gets in the way of progress, progress should prevail.

  9. […] A british blog-post makes use of Naomi Klein’s “Shock Doctrine” to reveal that The policies of Milton Friedman are being implemented by the ConDem Coalition, and Labour isn’t ev… […]

  10. […] A british blog-post makes use of Naomi Klein’s “Shock Doctrine” to reveal that The policies of Milton Friedman are being implemented by the ConDem Coalition, and Labour isn’t ev… […]

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