The Age of Anxiety / FRFI 143 Jun / Jul 1998

FRFI 143 June / July 1998

Insecurity has been a permanent feature in the lives of the vast majority of working class people throughout the history of capitalism. This also has been true, outside the exceptional three decades of the post-1945 boom, for large sections of the working class in the rich western imperialist countries. So when two Guardian economic journalists write a book on the 'deep-rooted insecurity affecting our lives in an age of untrammelled finance', their primary concern is not with the working class. The Age of Insecurity1 gives political expression to the anxiety of growing numbers of the commercial and professional middle class threatened with proletarianisation by the neo-liberal policies of Blair's Labour government. David Yaffe examines yet another attempt to forge a political economy of the new middle class.

A press release calls the book 'the most important political book' since Will Hutton's The State We're In. In some respects it is very similar. Both books contain a sustained and scathing attack on neo-liberal policies. Both are fearful of the political consequences if such policies are not constrained. Hutton warns of social breakdown and the return of totalitarian parties of right and left, Elliott and Atkinson (E&A) that a collapse of western capitalism - though unlikely at present - would 'take most of us with it' (p252).

They all call for a return to Keynes - but not 'the bastardised Keynesian corporatism of the 1960s and 1970s' (Hutton), or the Keynesian 'excesses of big government' or of a 'cavalier approach to budget deficits' (E&A p261). The middle classes would not tolerate that. They seek the Keynes who believed that 'capitalism should not be left to its own devicesÉand (that) capitalism did have to be carefully managed' (E&A p261-2); the Keynes 'who offered the world an unparalleled period of prosperity' (Hutton); who believed in putting 'severe restrictions on the mobility of capital' (E&A p262) and whose programme today 'would entail a transformation of the way the financial system worked' (Hutton). They seek the 'authentic' Keynes, untarnished by the failure of Keynesianism in the crisis of the 1970s.

Both books argue that a successful capitalism requires a flourishing middle class and both are therefore concerned with promoting its interests. Hutton argues concretely that they will break with neo-liberalism only if they are given a vested interest in the system by 'incorporating inequality into the public domain'. E&A, more idealistically, appear to have written their book primarily to convince the middle classes of the error of their ways in accepting the free-market 'culture', by demonstrating, among other things, that they were much better off in the post-war Keynesian economy than under today's authoritarian, unstable and threatening free-market capitalism (p128-9).

After all this, the obvious similarities end. While Hutton's book offers a structured and well thought out defence of middle class interests with concrete policies to achieve that end, The Age of Insecurity is full of lazy generalisations and simplifications in reaching a different, if equally reactionary and utopian, standpoint to that of Hutton.2 Both books put forward incredible policies to control a rampant, and non-productive financial capital, but while Hutton approves of the European Union and the so-called 'independence' of the Bank of England, Elliott and Atkinson do not. Under the guise of being part of the tradition which 'deprecates imperialism, balance of power diplomacy and the construction of big, powerful political units', The Age of Insecurity puts itself in the 'Little England' tradition - 'the appropriate and moral foreign policy stance of a left-of-centre government' (p84). Imperialism, however, is not discussed - the word does not even appear in the index - and the book is full of such soundbites lacking any theoretical plausibility.

Culture, politics and economics

Elliott and Atkinson argue that the rise of the free-market rightwing and the unquestioned acceptance of the free-market economy was a cultural phenomenon (p19). In this they say they are at one with Hutton and others on the centre-left in seeking an explanation which 'enthrones cultural above economic forces' (p194). Their disagreement with Hutton is that having started from the right place, 'the rottenness of the state', he then proceeded in the wrong direction. In seeing Britain's political and cultural institutions as responsible for the 'national malaise', he demands wholesale institutional reform. However, Elliott and Atkinson argue, his position is 'hugely irrelevant to Britain's real problems' (p218), because it ignores the key cultural factor behind the present crisis of 'social democracy' - the unquestioned acceptance of the free market economy.

Exactly what brought on this 'unquestioned acceptance of the free-market economy' is never clear. Although the final blow for the post-war system, for them, was the 'economic crisis which stemmed from the Yom Kippur war in the autumn of 1973', it seems the way people lived and spent their leisure time and how they perceived themselves, 'all lay behind the gradual erosion of the collectivist cement that held the West together in the era of Beveridge and the Beatles' (p17). Thatcher and Reagan therefore ran 'with the cultural grain, and were able to fashion a new consensus of their own from the fears of the middle classes and the aspirations of the blue-collar working class' (p17). In another place it is put down to a 'New Authenticity' rather than any mysterious outbreak of 'greed' or 'selfishness' (p75). That is, the search for the 'genuine article in many, perhaps most, areas of life' . In this context, they argue, an inflating currency is no more acceptable than chemical beer. 'The latter led to the Campaign for Real Ale, the former to the campaign for real money: - monetarism.' (p70) Later, explaining the move to close down subsidised work- places such as British Leyland, they say that 'artificial jobs were no more acceptable than artificial bread.'(p74)

Reading this, it seems that it is our authors who have swallowed all the propaganda. But there is method in this madness. All this is necessary to avoid the obvious truth that the failure of Keynesianism was not a 'cultural phenomenon' but an economic one, arising from the contradictions within the capitalist system of production. The post-war boom came to an end because profits from production at home and trade and investment abroad, were insufficient both to give an adequate return on capital, and to finance state welfare and the growing unproductive private sector. It was no longer possible to guarantee the relatively privileged conditions of higher-paid workers and the middle classes through the state sector while sustaining adequate living standards for the mass of the working class.

As a result of the new conditions of capital stagnation and growing inter-imperialist rivalries in the middle of the 1970s, the social-democratic consensus began to break down. The 1974-79 Labour government set monetary targets and cut state spending in an effort to push up profitability. The low-paid state sector workers fought back and the 'winter of discontent', 1978/9, drove the higher paid skilled workers and the middle classes into the arms of the Tory Party. Thatcher embraced this new constituency and, as Hutton said in his book, 'the liberal professions, affluent council house tenants, homeowners, all benefited from her tax cuts, credit boom and privatisation programme.' They turned to Thatcher and embraced the market. For now it was the market which was delivering privileges which the state sector could no longer sustain. This is the materialist explanation that is the starting point for any understanding of the political, social and cultural changes that we associate with Thatcherism.3

It is precisely now that neo-liberalism 'has failed, even in its own terms, and left the global economy unstable and poised on the brink of a social and environmental chasm' (p14), that this book and others like it are being written. The aim is to show that the system can be saved if only the middle classes can be persuaded, cajoled, even bribed to embrace a more compassionate capitalism, to save capitalism from 'devouring itself' (p132).

Let's really hear it for Karl Marx

In opting for the dominance of culture over 'economics', the authors are aware that they are in direct conflict with Marx's understanding of capitalism - a standpoint which has little difficulty in explaining the main features of the global economy in 1990s. In a chapter 'Let's Hear It for Karl Marx: Inequality and Instability in the Market Order' they have to acknowledge this, while dismissing its revolutionary political consequences. Capitalism, they accept, if left to its own devices is inherently unstable. In that Marx was correct. Marx was wrong, though, because he failed to predict how pliable capitalism in the developed industrial states would prove to be: 'far from passively waiting for the masses to turn the streets of Manchester, Berlin or New York into rivers of blood, the capitalist class made concessions, big concessions.' The proletariat, far from signing up for the class war in response to greater immiseration, became richer and more contented. Capitalism between the years of Marx's death in 1883 and the end of the post-war Golden Age in 1973 became, according to our authors, more humane. (p220-1)

This kind of lazy simplification runs throughout the book. It is not only wrong but obscene. Those 'rivers of blood' did flow: through two imperialist wars, fascism and the Great Depression, with millions upon millions of working class
people losing their lives. After the second world war it wasn't 'unthinkable' that the pre-Depression status quo should be restored in countries like Britain (p262); it was politically impossible given the change in the balance of class forces resulting from those horrendous events. In addition, in case it has been forgotten, British prosperity and democracy after the war were built upon the backs of millions of oppressed peoples in the colonies. The authors need reminding that Attlee's Labour government might have 'presided over the high noon of British collectivism' (p25), but that it could do this only because it was virulently imperialist. Keynesianism was not responsible for the post-war boom, as the authors maintain, but gave ideological expression to the changing requirements of capital in that period. As we have argued, the post-war boom came to an end, and state welfare came under attack, not due to cultural phenomena but because of a renewed crisis in the capital accumulation process as the rate of profit began to fall. Neo-liberalism gave ideological expression to the new requirements of capital in this crisis-ridden period. Finally the desertion of the professional middle classes to Thatcher and the neo-liberal agenda happened because their privileged income and status could no longer be guaranteed within the state sector, and were increasingly distributed through the market - a materialist explanation based on class interests. Marxists, in fact, have little difficulty explaining all these features of the post-war period, unlike those who rely on 'cultural phenomena'.

Marx in the Communist Manifesto, under a section 'Conservative, or Bourgeois Socialism', wrote of that 'part of the bourgeoisie (which) is desirous of redressing social grievances, in order to secure the continued existence of bourgeois society'. He would have had no trouble in dealing with Keynes. He was also aware of those petit bourgeois socialists like Proudhon who wanted to perpetuate commodity production (today, the capitalist market economy) yet abolish money through the creation of free credit and a people's bank (today, severely restrict the mobility of capital through popular control of the money system - p275). In this we have the standpoint of the authors of The Age of Insecurity. As Marx said then, and it is worth repeating: 'one might just as well abolish the Pope while leaving Catholicism in existence' (Capital Vol 1 Ch 2).

The dominant position of a rampant, non-productive financial capital in the 1990s is the inevitable consequence of the capitalist market economy in crisis. It cannot be changed by changing cultural values but by destroying the system of production on which it is based. Marx understood this and fought to build the working class movement which could help to bring it about. For Marxists the standpoint of The Age of Insecurity offers no solution but is itself part of the problem.


  1. Larry Elliott and Dan Atkinson The Age of Insecurity Verso 1998 £17.00 hbk. All page numbers in the text, unless stated otherwise, refer to this book.
  2. For a review of Hutton's book see David Yaffe, 'The political economy of the new middle class',  FRFI 124 April/May 1995.
  3. In is only in this context that one can see the real role of Blair's Labour government. See David Yaffe, 'The politics and economic of globalisation' in FRFI 137 June/July 1997. For a detailed materialist explanation of the end to the post-war boom see David Yaffe and Paul Bullock 'Inflation, the crisis and the post-war boom' in Revolutionary Communist 3/4, RCG Publications 1974.