Baroness Thatcher has of course been prominent in the news in recent days.
I will not here comment on her or her economic or labour market policies, but one incident in 1975 pre-dating her election as Prime Minister in 1979 caused me to think about a chief influence on her economic view.
In 1975 soon after becoming leader of the Conservative Party the Institute of Economic Affairs arranged a meeting between Friedrich Hayek and Margaret Thatcher in London. During her only visit to the Conservative Research Department in the summer of 1975, a speaker had prepared a paper on why the "middle way" was the pragmatic path the Conservative Party should take, avoiding the extremes of left and right. Before he had finished, Thatcher "reached into her briefcase and took out a book. It was Hayek's The Constitution of Liberty. Interrupting the pragmatist, she held the book up for all of us to see. 'This', she said sternly, 'is what we believe', and banged Hayek down on the table".
Hayek was a champion of classical liberalism, though he had earlier been sympathetic to democratic socialism. His most well known book is ‘The Road to serfdom’, written between 1941 and 1943, published in 1944 and greatly admired by Milton Friedman. This warned that central planning (a necessity during World War II for the Axis powers, the Soviet Union and its satellites and the Allied powers) if carried to extreme would lay the foundations for dictatorship and totalitarianism, reducing ordinary people to serfdom.
Seventy years later it seems that deregulated global capitalism and increased flexibility in the work force is also leading / has led to serfdom for many:
- zero hours contracts (insecurity of pay)
- short term contracts (insecurity of employment)
These may not be an issue for workers in a growing economy, especially if they are engaged in other activity which is facilitated by this work, e.g. further study, or they are trying to establish themselves in the early stages of a career, but where this becomes the norm., where workers for whom these conditions of employment would formerly be unacceptable, or where these conditions are extended exploitatively then workers are reduced to a serf-like condition.
For example in response to Government pursuit of a leading chain of coffee houses for tax avoidance the chain demanded its workers agree to changed terms and conditions, effectively reducing their pay, or walk.
Some zero hours contracts include conditions requiring that the employees hold themselves available to work at short notice a significant amount of the time, curtailing their freedom to engage in other activities while providing no recompense for that availability. Practices that are reminiscent of some industries in the industrial age, e.g. dock yard day labour, but in different sectors in this information age and predominantly service sector economy (primarily catering, caring and retail).
According to Tanya Gold's article in the Guardian:
- 23% of large British firms use zero hour contracts
- At least 200,000 are expected to remain 'on hold' in case work is available
- Doctors and university lecturers are among those now living with zero hours contacts
Capitalism, like other -isms can lead to 'serfdom,, it isn't the 'ism' its issues of responsibilty, compassion and relative inequality.
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