International Committee of the Fourth International
Fourth International 1991: Oppose imperialist war and colonialism!

Lessons from the fall of Thatcher

This editorial board statement originally appeared in the December 1, 1990 issue of “International Worker,” fortnightly newspaper of the International Communist Party, British section of the International Committee of the Fourth International, and the forerunner of the Socialist Equality Party (UK).

The resignation of Margaret Thatcher was a cause for celebration by the working class. Her downfall saw many breaking off from work to celebrate, whilst in the schools children clapped and cheered. There was a wave of elation, coupled with an air of disbelief that her 11 years was finally up! There has been a whole generation which has grown up knowing nothing but Thatcher’s seemingly endless victories against the working class. The capitalist press are even referring to the end of her “reign.” Even on the day of her resignation, the headlines led on her pledge to “fight on and fight to win!”

But workers must not allow any euphoria to obscure the vital political lessons which must be drawn. The fact is that the working class was completely excluded from playing any part in her demise by the treachery of the Labour Party and TUC bureaucracy. It was not the enormous class hatred and anger of millions of workers and youth that removed her from office, but her allies of the last 11 years. That such a “bloodless coup” by sections of bourgeoisie itself was necessary demonstrates the enormous crisis of British capitalism. That it was possible only underlines the paralysis within the labor movement under the domination of the Kinnock/Willis leadership.

While the working class was happy to see her fall, many feel cheated that its result has been a leadership contest within the Tory Party, in which three of her closest allies—Heseltine, Major and Hurd—are left to decide who continues to function as prime minister. Furthermore, many who saw Thatcher’s demise as an opportunity to deal with the Tories once and for all will have been disgusted by the actions of the Labour Party and their counterparts in the TUC.

Labour leader Neil Kinnock was forced reluctantly to put a motion of no confidence in the government. This was prior to the Thursday, November 22, cabinet meeting at which Thatcher had been told by her cohorts that she must withdraw from the second round of the leadership contest and resign, if the Tory Party was to be saved. While workers and youth cheered, in the Houses of Parliament, the Labour Party looked like it had gone into mourning. Kinnock praised Thatcher, claiming that she “amounted to more than those who have turned against you.” Others such as Gerald Kaufman sympathized with her for being “stabbed in the back.” The “Lefts” were virtually silent, with Skinner making pathetic jokes, to which Thatcher could reply, “I’m enjoying this.”

Kinnock stated that he was pleased that Labour played a part in bringing down Thatcher. This is a lie—the greatest indictment of the Labour Party is that they played no part whatsoever in this. Indeed, Thatcher’s resignation has created a huge crisis for them. The National Executive meets this week to prepare for an early general election. They are faced with the task of completely redrafting their propaganda, which was all directed at Thatcher. At the same time, their policies are indistinguishable from those of Heseltine.

The questions which must be answered are: “Why has Thatcher been forced to resign?” and “Why is Labour still prostrate before the Tories?” Workers must draw the real lessons of the last 11 years. The Labour Party and TUC, with the aid of the middle class radicals, have carefully cultivated the myth of Thatcher as the “iron lady”—a Churchillian figure whose strength embodied the superiority of capitalism over socialism. In fact, Thatcher was always the mediocre representative of a crisis-ridden capitalist class. Her apparent stature was always an inverse reflection of the minuscule standing of her opposition. That the “iron lady” has been shown to have feet of clay only confirms that since coming to power, she has relied totally on the labor and trade union bureaucracies’ betrayal of every single struggle of the working class to implement her class war agenda.

Thatcher has been forced to resign because of the complete failure of the strategy on which she has based herself for the last 11 years. Her fate expresses profound shifts in class relations. More than any other figure—including Reagan—she epitomized the strategy associated with the inflationary boom of the 1980s, the creation of masses of fictitious capital and international speculation, coupled with austerity and class war against the working class. This policy was hailed by the Stalinist bureaucracy in the Soviet Union and Eastern Europe as the model for their own drive for the restoration of capitalism.

Thatcher was brought to power on the backs of the betrayal of the 1974-79 Labour government. Under conditions of mounting crisis for British and world imperialism, the bourgeoisie internationally began to break with the policies of social reformism. Thatcher declared her intention to “roll back the frontiers of socialism” and “let the lame ducks go to the wall,” in order to liberate the entrepreneurial spirit through policies of “popular capitalism.”

Under these slogans, a massive program of privatizing previously state-owned industry was launched, coupled with the dismantling of the welfare state. Two-thirds of state-owned enterprises have been privatized. Welfare provisions were slashed to the bone. The top rate of tax was cut from 83 percent to 40 percent. The beneficiaries of this were primarily the big bourgeoisie. But Thatcher built her social base in the middle class by bribing them with some of the fruits of this and creating a new social phenomenon—the “yuppie.”

A large portion of Britain’s manufacturing base was destroyed—20 percent by 1982. Thatcher focused on creating masses of speculative capital for investment on the world markets, deregulating the stock exchange to facilitate this. External assets rose from 6 percent of GNP in 1980 to 29 percent by 1986, largely in the USA.

To carry this out, she launched a campaign of union busting, which saw unprecedented use of state violence against the working class to enforce the anti-union legislation which was drawn up.

Yet far from rescuing British imperialism from disaster, this strategy has left it as the most decrepit capitalist nation on the world arena. Its complete artificiality was exposed with the stock market crashes of 1987 and 1989, from which the capitalists have never fully recovered.

Black Monday 1987 saw $1 trillion wiped off the international stock exchanges, bringing to an end the speculative boom and preparing for the recession which has now begun. Under these conditions, the fundamental contradiction of the capitalist system, between the world market and the system of rival nation-states, once more reasserts itself. The competition between the various capitalist powers for control of the world’s markets assumes cutthroat dimensions. World economy is breaking up into antagonistic blocs pursuing trade war against their rivals to rescue their economies from collapse.

The collapse of the speculative boom left Britain with trade deficits of 20 billion last year. Last month it rose by 1 billion and is expected to be 316 billion by the end of the year. Inflation is hovering at 11 percent—double its nearest European rival—while interest rates are expected to rise again to 16 percent. Britain has the slowest productivity growth (1 percent) in Europe and this is expected to go into the negative for the next five years. Manufacturing investment is already down 7 percent this year. Companies are faced with mass closures. Liquidations have almost doubled to 15,000 per annum. Major clearing banks such as National Westminster, Midlands and Lloyds are in trouble.

The conflict over entry into the European Exchange Rate Mechanism—which was the immediate cause of Thatcher’s downfall—was an expression of this crisis and the advanced development of trade war. Thatcher and British imperialism were forced to abandon the pretense of Britain’s independence on the world markets and subordinate it instead to the economic policies of the German Bundesbank, by pegging the sterling to the deutsche mark to prevent a collapse.

But the greatest indictment of the myth of “popular capitalism”—a lesson which the working class in the Stalinist-ruled countries are now learning—is the social devastation it has wrought on the working class. Fully a third of the population now live in, or on the threshold of, poverty. Three million and more are unemployed. Between 2.5 to 3 million are homeless. Health care, benefits and education are being denied to millions in desperate need of it. Now even the middle class which Thatcher carefully cultivated are under the hammer, from high interest rates, mortgage payments and the destruction of services. Far from creating a property- and share-owning democracy, the Thatcher years have seen home repossessions rise by 800 percent, while share ownership by small investors has declined from 28 percent to 20 percent, as capital is concentrated in huge multinational enterprises.

Thatcher had become too much of a liability for the British bourgeoisie to bear. Her record on Europe was an albatross around their necks, severely jeopardizing Britain’s competitiveness. At the same time, the end of the speculative boom and mounting class antagonisms focused the hostility of the working class and alienated large sections of the middle class.

Thatcher’s 11 years in office was only made possible by the treachery of the Labour and trade union bureaucracy. The defeat of such struggles as the steel workers, printers, dockers, ambulance workers and—above all—the 1984-85 miners strike, was entirely due to their isolation by a bureaucracy which is utterly committed to the defense of capitalism and which has adopted almost entirely the program of the Tory Party. They have ditched wholesale any pretense of a commitment to reform capitalism and now praise a “free market” which stands in ruins. They are pledged to continue all the attacks which Thatcher initiated, such as the anti-union laws, because they, like her, are representatives of the bourgeoisie and not the working class.

The TUC has already offered the capitalists the imposition of a wage freeze and clampdown on strikes. TUC General Secretary Norman Willis’s only comment on Thatcher’s resignation—after 11 years which have seen union membership fall from 12 million to 8.5 million—was a 39-word statement, declaring, “An understanding of the role of trade unionism in society was never one of Mrs. Thatcher’s strongest characteristics.” They no longer defend any of the past gains of the workers, but act as the policemen of the capitalists and a fifth column of the state.

The source of this treachery lies in the pro-capitalist program of the bureaucracy. The collapse of the postwar order, established on the basis of the betrayals of Stalinism and the economic, political and military hegemony of the United States, is producing the most reactionary development in all those tendencies based on a national program. The evolution of the bureaucracy in the capitalist countries has the same source as the drive for capitalist restoration by the Stalinists. It is not the bankruptcy of socialism, but the crisis of the nation-state and profit system of capitalism. It is impossible to fight international capital on anything other than an international program. National programs today threaten the destruction of the labor movement.

The middle class radical groups which infest the labor movement such as the Militant Tendency and Socialist Workers Party have all joined in a chorus to portray Thatcher’s fall as a “personal crisis,” resulting from the poll tax. The SWP ran around hysterically trying to organize champagne parties, whilst the Socialist Organiser declared, “It is likely that whoever the new leader is there will be a return to consensus politics.” These middle class radicals have all lined up behind a Kinnock-led Labour government without addressing the program of the right wing. By obscuring the real issues that are involved, they try to create the illusion that something progressive can come from Thatcher’s resignation, outside of the working class intervening independently and seizing the political initiative.

The Tories will not ameliorate their attacks on the working class in the manner of the “caring capitalism” demagogy of Heseltine. Theirs and Labour’s agenda is being set by the desperate crisis of world imperialism. The collapse of Thatcher’s strategy cannot be resolved by a change of course towards Europe, with other things continuing along the same lines. Thatcher’s strategy was an attempt to overcome deeper historical questions—to offset the breakdown of the postwar arrangements and prevent the collapse of capitalism and the onset of world socialist revolution.

The agenda of the bourgeoisie is set by the trade war, slump and the drive towards war in the gulf. The rival imperialist powers are beginning a new carve-up of the planet. Its price will be untold suffering for millions of workers. On the very day of Thatcher’s resignation, Parliament agreed to the sending of a further 14,000 troops to the Persian Gulf, with Labour voting in favor.

The crisis-ridden ruling class can only deepen its assault on the workers movement. Thatcher’s resignation signals the onset of intense class battles. They now have to completely destroy social services and bring in poverty wages. It is estimated that two million jobs will go as a result of the Single European Market and the onset of slump. Their ability to bribe large sections of the middle class has been destroyed, while they have expressed doubt over the Labour Party and TUC’s ability to contain workers struggles should it come to power.

The working class must seize advantage of the desperate crisis of British imperialism in a struggle for a workers government to overthrow capitalism and establish socialism. Workers can only oppose the trade war, slump, and the war in the Middle East by fighting on a new axis—the international unity of the working class in a common struggle for socialism. This means building the leadership of the International Communist Party, British section of the International Committee of the Fourth International.

The working class must break out of the straitjacket being imposed by the Labour Party and TUC and take the fight to this bureaucracy. Labour has called for a General Election and been rebuffed. Workers must demand that they mobilize the entire labor movement to force the Tories from office. Do not accept the Tory policies of Kinnock and Willis! Demand that those “lefts” who claim to speak for the working class break from their program, kick them out of the workers’ movement and mobilize the working class on a socialist program, based on the nationalization of banks and industry, under workers’ control without compensation. They must end their collaboration with the war in the gulf and demand the withdrawal of all British troops. The Tories must be replaced by a Labour government pledged to socialist policies.

We warn: place no confidence in the bureaucracy to carry this out! Occupy factories and workplaces threatened with closure and take wildcat strike action. Organize the defense of all picket lines and communities. Form strike and occupation committees as the nucleus of workers’ councils which must be the basis of a workers’ government. The working class must adopt the program of the ICP, contained in our pamphlet, The British Revolution and the Tasks of the International Communist Party. We call on all workers and youth who agree with this perspective to join this party and build it as the new revolutionary leadership of the working class.