Routledge Revivals Global Capitalism and National Decline First published in 1990, Global Capitalism and National Decline is a major contribution to the study of British political and economic decline. The author concentrates on the global nature of capitalism as the context for the development of national capitalism, and on the relationship between internal and external factors. A long-term view of British politics enables him to demonstrate that competing popular explanations of Britain’s crisis and the rise of Thatcherism in response to it, are in fact interconnected. The long decline of Britain originating in the 19th century, the inherent weakness of the post-1945 settlement, and the critical events of 1970s, acquire their fullest meaning when seen as different ‘layers’ of one and the same historical process. Henk Overbeek takes the story of Britain’s decline through to Mar- garet Thatcher’s tenth anniversary in office. His book will be invaluable to scholars and students of economics, politics, and history. it offers a clear perspective on the problems of national decline within a global context, and on Britain’s position in Europe and in the wider world. Global Capitalism and National Decline The Thatcher Decade in Perspective Henk Overbeek Firstpublishedin1990 ByUnwinHyman Thiseditionfirstpublishedin2022byRoutledge 4ParkSquare,MiltonPark,Abingdon,Oxon,OX144RN andbyRoutledge 605ThirdAvenue,NewYork,NY10017 RoutledgeisanimprintoftheTaylor&FrancisGroup,aninformabusiness ©HenkOverbeek1990 Allrightsreserved.Nopartofthisbookmaybereprintedorreproducedorutilisedin any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrievalsystem,withoutpermissioninwritingfromthepublishers. Publisher’sNote Thepublisherhasgonetogreatlengthstoensurethequalityofthisreprintbutpoints outthatsomeimperfectionsintheoriginalcopiesmaybeapparent. Disclaimer The publisher has made every effort to trace copyright holders and welcomes correspondencefromthosetheyhavebeenunabletocontact. ALibraryofCongressrecordexistsunderISBN:0044454139 ISBN:978-1-032-36897-9(hbk) ISBN:978-1-003-33437-8(ebk) ISBN:978-1-032-36898-6(pbk) BookDOI10.4324/9781003334378 Global capitalism and national decline THE THATCHER DECADE IN PERSPECTIVE Henk Overbeek London UNWIN HYMAN Boston Sydney Wellington © Henk Overbeek 1990 This book is copyright under the Berne Convention. No reproduction without permission. All rights reserved. Published by the Academic Division of Unwin Hyman Ltd 15/17 Broadwick Street, London W1V 1FP, UK Unwin Hyman Inc., 8 Winchester Place, Winchester, Mass. 01890, USA Allen & Unwin (Australia) Ltd, 8 Napier Street, North Sydney, NSW 2060, Australia Allen & Unwin (New Zealand) Ltd in association with the Port Nicholson Press Ltd Compusales Building, 75 Ghuznee Street, Wellington 1, New Zealand First published in 1990 British Library Cataloguing in Publication Data Overbeek, Henk Global capitalism and national decline : the Thatcher decade in perspective. 1. Great Britain. Economic conditions, history I. Title 330.941 ISBN 0-04-445413-9 ISBN 0-04-445639-5 Library of Congress Cataloging in Publication Data Overbeek, Henk. Global capitalism and national decline : the Thatcher decade in perspective / Henk Overbeek. p. cm. Includes bibliographical references. ISBN 0-04-445413-9 ISBN 0-04-445639-5 1. Great Britain—Economic conditions—20th century. 2. Great Britain—Economic policy. 3. Capitalism—Great Britain-—History—20th century. 4. Thatcher, Margaret. I. Title. HC256.094 1989 338.941—dc20 89-16552 CIP Typeset in 10 on 11 point Bembo Printed and bound in Great Britain by Biddies Ltd, Guildford and King's Lynn Contents List of abbreviations page xi List of tables and figures xiii Preface xvii Introduction 1 1 Long waves of class formation 11 Class formation in the world system 11 The temporal dimension of class formation 17 Class formation and the political articulation of class interests 23 Capital fractions 23 Concepts of control 25 Generations in the bourgeoisie 29 2 The rise and fall of British hegemony 35 The making of the British class structure 35 The rise of British capitalism 36 The nature of the British state 37 The logic of priority 38 The class structure of the Pax Britannica 39 The heyday of British industrial capital 41 The aristocratization of the bourgeoisie 44 Britain's imperial decline 46 British foreign investment 49 The incorporation of the labour movement 51 The downfall of the Liberal Party 55 Towards the General Strike 57 3 Between New Deal and fascism: depression, war and transition in Britain 59 The turn to protectionism 60 Corporate liberalism in the 1930s 63 vii GLOBAL CAPITALISM AND NATIONAL DECLINE The strength of the state monopoly bourgeoisie 68 The structure of the British economy during the 1930s 70 The declining industries 71 The Fordist industries 76 The balance of depression 80 The long decline: determination vs. contingency 81 4 The redefinition of Britain's global position 1941-73 84 Global Fordism 84 Postwar reconstruction of the global order and the birth of the 'special relation' 88 Britain's relationship with Europe 93 Early European integration projects 96 Suez and the special relationship 97 The move towards Europe 100 The world market and the British political economy in the 1950s 105 The multinationalization of the British economy 105 The effects of City dominance for British monetary policy 106 5 The postwar Fordist offensives 112 The postwar Labour government 113 Nationalization 114 The establishment of the welfare state 119 The continued decline of Britain during the 1950s 122 Concentration and centralization of capital 123 Labour relations in the postwar decades 125 Modernization offensives in the 1960s 128 The rise of the Conservative corporate liberals 128 The Macmillan era 130 Labour back in power 132 The failure of Fordism 137 6 Global crisis and the rise of neo-liberalism 141 The crisis of the 1970s 141 Capitalism and crisis 141 The international context 144 Britain and the crisis 147 Weak state, strong City 151 The problem of union strength 152 Three options 154 The neo-liberal revolt in the Tory Party 155 The Heath years 155 Europe 156 viii