Through one of those chains of thoughts that sometimes send one from book to book, I ended up browsing through Tony Judt’s magnificent [amazon_link id=”009954203X” target=”_blank” ]Postwar: A History of Europe Since 1945[/amazon_link] over my second cup of coffee this morning. Looking for his take on post-war austerity, I ended up instead in the 1970s and its crisis of capitalism. And here (p462 in my 2007 UK paperback) is this passage:
“The greatest beneficiaries of the modern welfare state… were the middle classes. When the post-war system started to unravel in the 1970s it was those same middle classes who felt not so much threatened as cheated: by inflation, by tax-financed subsidies to failing industries and by the reduction or elimination of public services to meet budgetary and monetary constraints. As in the past, the redistributive impact of inflation, made worse by the endemic high taxation of the modern service state, was most severely felt by citizens of the middling sort. It was the middle classes, too, who were most disturbed by the issue of ‘ungovernability’….”
And, he continues, politicians appeared to have lost all capacity to do anything, as the world financial system unravelled.
An reminder of the extraordinary similarities between the last major crisis of capitalism and the present one – the main difference being that the failing industry now soaking up those tax-financed subsidies is banking, rather than steel and coal. On a little reflection, though, every crisis squeezes the middling sort, those with something to lose but not so much that they needn’t really worry. The same was true in the 1930s. Marx of course claimed that: [amazon_link id=”0140447571″ target=”_blank” ]”The history of all hitherto existing society is the history of class struggles.”[/amazon_link] But he wrote that at exactly the point when history was becoming the history of middle-class struggle.
[amazon_image id=”009954203X” link=”true” target=”_blank” size=”medium” ]Postwar: A History of Europe Since 1945[/amazon_image]
The post war welfare settlement has collapsed. The middle classes got free education and free healthcare in return for providing a massive tax subsidy. It was assumed that over time the numbers of unemployed, sick etc would go down – in fact it has gone up and the services that the middle classes have been left with as their part of the bargain – schools and hospitals – deliver a poor service. Yes, we need to cut middle class welfare (e.g., paying for people’s parents in care homes and then letting the children inherit the house) but in return we need a radical improvement in state services. Maybe a place to start is by ending state control of schools and moving to a voucher system?
Or by reducing unemployment and chronic illness? I don’t know where you start redrawing that deal, except that as an individual middle-aged, middle-class person I’m only counting on myself – and my children!