Thatcherism's aftermath

...There are two broad choices for governing elites to chose from in contemporary economic development...

...One can aim for a rentier economy or for a 468 • DISSENT Reports from Abroad productionist economy...

...A rentier economy still demands a certain level of education to reproduce its administrative elite, and this is provided by the university system...

...Other symbols of the drift toward a rentier economy in Britain are well known...

...Yet a new study published by the National Institute for Economic and Social Research shows that the productivity of manufacturing industry in Britain in the 1980s was just two-thirds that achieved in the Netherlands...

...The question, then, of skills, training, and education is important not because of a technocratic desire to improve efficiency...

...However, in light of their election successes in the 1980s, they might seem a very clever party, and their decision to ditch Margaret Thatcher was also clever...

...Productionist economies offer the possibility of greater involvement...

...Further evidence of drift toward a rentier economy can be seen in the distribution of firms in Britain between manufacturing (productionist) and trading or extractive (rentier) companies...

...Even in Japan, there is a higher percentage (54.5 percent) of male workers in the service sector than in Britain (36.2 percent...

...It is not only a question of original research...

...auto industry save for the British Aerospace subsidiary Rover, and Honda has a 20 percent stake in that company...

...As London University's Professor Sig Prais points out, the difference between Britain and Germany is not in the production of university graduates-10 percent of each population were graduates—but at the level of "intermediate" skills...

...The new prime minister is an exemplaty product of a rentier economy—someone who left school at sixteen and then moved upward in a bank by attaching himself to a patron, Lord Barber, chairman of the bank where Major worked in the 1970s, and then repeating the exercise in his political career with Margaret Thatcher...

...They are also incompatible with John Major's government...

...More and more of manufacturing industry is now owned by foreign capital...

...The OECD (Organization for Economic Cooperation and Development) analyzes patent applications per one hundred thousand of population, and it is a good indication of the cleverness of a country: Austria 118 Denmark 114 Finland 119 Germany 220 Japan 300 Netherlands 116 Sweden 238 Switzerland 417 United Kingdom 111 What is common to all these countries other than Britain is that they have a fully organized, integrated education and vocational training system laid down by law and administered on a consensual bi- or tripartite basis...

...Although Britain has a relatively small administrative elite to be placed at the head of companies, government, and public institutions, it does not have the skills in depth to ensure quality—in products or services—at all levels of output...

...Politically, their best allies are often to be found in democratic parties of the left, linked to worker organizations that stress educational and skill opportunities for their members...

...But the difference between a rentier and productionist economy is to be found in nonuniversity training...

...His niceness, intelligence, dryness on economic or wetness on social issues are all irrelevant...

...A productionist capitalist economy offers possibilities for movement toward more pluralist and even social democratic policies, but a rentier economy is untransformable except through abrupt, violent upheavals...

...Nonetheless, part of the skill and information input will be generated in Japan and it will take some years, if not decades, before Japanese companies are ready to demand a wider reskilling of the British work force...

...Britain, it will be said, has nothing to do with these Third World rentier economies and instead is a mature, if economically problematic, European nation-state...

...Fujitsu has bought ICL, thus eradicating the British-owned computer industry, while Canada's Northern Telecom has taken over STC, a principal telecommunications manufacturer in Britain...

...Unlike the productionist economies of Sweden and Germany, where overtime is strictly limited by law or under the control of plant works councils, a rentier economy like Britain's prefers excessive overtime and a smaller number of manufacturing jobs...

...The only hope for twenty-first century democratic socialism will lie in the realm of democratic productionist economies, and that is why the politics of education, skills, and training is now the foremost item on the agenda of the contemporary left...

...Even the United States invests twenty times as much venture capital in companies carrying out innovative research and five times as much in high technology companies as does Britain...

...In Germany, Eduard Reuter, head of the Damiler-Benz vehicle and aerospace conglomerate, is an SPD member, while in France, Alain Gomez, head of the giant Thomson electronics group, is a Socialist party member and former theoretician of the left-wing CERES group...

...Mainly this was due to the massive cuts in employment of the early 1980s...

...This reflects a quite deliberate social decision to keep people in ignorance...

...Parts of British manufacturing will benefit from foreign takeover and, if anything, the Japanese have probably saved key U.K.-based manufacturing activities...

...In any case, in a productionist economy, the difference between blue-, white-, and bright-collar workers becomes eroded, with all seeking to maximize output, sales, and their share of wealth created...

...British venture capitalists spend their funds on mergers and buyouts or in low-technology sectors such as retailing...

...But with a deep-rooted political culture of social concern stretching from social to Christian democracy such as exists in Europe, productionist economies bring with them a social agenda extending beyond the workplace...

...Doomsayers are looking forward to the coming world recession, but rentier economies can drift along for decades under a pro-rentier government...

...The oft-cited dichotomy between industrial and service economies is, in this context, irrelevant...

...It is perfectly feasible to have productionist economies in which control is exercised to thwart workers from using skills and workplace power for broader social reasons—Japan is a good example...

...In a rentier economy there may still be plenty of manufacturing while in a productionist economy there is a great deal of income (that is, rents) deriving from shares, property, and investments...

...Ignorant people know their place...

...Productionist economies create a stratum of managers, even owners, whose chief aim is to improve product output in terms of quality as the only secure way of making a profit...

...In Germany, Japan, Sweden, and South Korea, the top ten companies in each country are in manufacturing...

...Manufacturing now occupies about 25 percent of the British economy compared with 30 percent in the 1970s...

...Also despite newspaper publicity given to some scandalously high pay increases for top bosses, British managers at all levels tend to be at the bottom of the scale in international comparisons of managerial earnings...

...According to British government statistics, British manufacturing workers put in an average of nine hours overtime per week, thus pushing up the working year toward Third World levels...

...A 1989 study showed British autoworkers working longer hours than the supposed workaholics on auto assembly lines in Japan...

...There are more fellows of All Souls in the government than at any previous time in the twentieth century, and they have presided over the worst cuts in British education, training, and skills base we have ever seen...

...Britain has fewer in education after age sixteen, fewer in university, fewer with technicians' qualifications, and fewer craftsmen than Germany, France, or Japan...

...Foreign ownership is not bad in itself—Ford and Vauxhall (GM) have never been British—but it is a mark of a rentier economy when foreign capital so predominates...

...Education and training for all and constant reskilling are incompatible with a rentier economy...

...An example of how much Britain has been made into a stupid country can be seen in the number of patent applications each year...

...In a rentier economy, managers are paid poorly, because the source of wealth is not earned income but shares, or property...

...On any measure of resources allocated to education and training, the decline has accelerated under the Tories...

...Under the Conservatives, Britain enhanced its profile as a nation of shopkeepers but increasingly had to buy abroad the goods to sell in shopping malls...

...This may have been to mistake an effect for a cause...

...As Dickens put it: Oh let us love our occupations Bless the squire and his relations Live upon our daily rations And always know our proper stations Hierarchical relationships linked to the values of a landowning aristocracy still dominate in Britain...

...South Korea is producing more Ph.D.s than Britain...

...The Netherlands, Norway, Denmark, and Sweden all have a higher proportion of the work force in the service sector than Britain, yet all are manufacturing centered with much higher levels of skill training and education...

...If far fewer people are producing the same, or even slightly smaller, output, then clearly productivity shoots up...

...The Conservatives accept this impoverishment of Britain as part of their policy to create a rentier economy...

...It is thus a matter of political choice, not an unstoppable economic distribution of employment FALL • 1991 • 469 Reports from Abroad that determines whether a country increases the knowledge and skills of its population...

...In 1988, according to the National Institute for Economic and Social Research, 62 percent of the British population had no qualifications of any sort, compared with only 26 percent in the then West Germany...

...According to Sir Claus Moser, president of the British Association, Britain "is now in danger of becoming one of the least adequately educated of all the advanced nations...

...Sixty-four percent of Germans had "intermediate" vocational qualifications compared with 28 percent in Britain, itself a decline from a decade ago...

...A principal myth of the Thatcher years was that Britain made great strides forward in productivity...

...The proportion of employees in training in manufacturing has fallen since 1979 to just 1.9 percent...

...Why not toddle along at half what your German equivalent earns because when Mummy dies and leaves you a five-bedroom detached house bought for U.S...

...Yet there is mounting evidence that in the years of Tory rule since 1979, they have done their best to turn Britain into a stupid country...

...Tiny Sweden and Switzerland, each of whose populations is smaller than that of London, are producing money-making ideas at more than twice the rate of Britain...

...To get quality right from the beginning and not have corrections or repairs to worry about further down the production line, workers have to be given the power—and the skills—to solve problems on the spot...

...Rentier economies ask you to vote once every five years...

...Only four out of the top ten British firms are in manufacturing...

...q FALL • 1991 • 471...

...It is in rentier economies that we see sustained attempts at violent overthrow of the government, notably in Latin America and the Philippines, while productionist economies such as Korea and Taiwan, although with state repression, are generating political organization, often based on industrial workers, and not armed violence...

...In fact, Britain in the 1980s has suffered from more violence (Ulster, urban ghetto riots, football hooliganism, violent crime, racist attacks, poll tax riots) than any other European country as the Conservatives drive to a rentier economy...

...The democratization of the workplace or the community is only achievable if workers and citizens have the skills, knowledge, and ability to use information required to make complex, often painful, decisions...

...The problem lay not in a specific form of ownership but in the nature of control exercised by workers and managers based on insufficient skills and knowledge...

...To empower workers is to alter the nature of control...

...Emphasizing rentier instead of productionist values is a medium- and long-term mistake because as a country's manufacturing base decline so does the strength of its rentier sector...

...It is profoundly a question of social power and will determine whether Britain continues its change into a full-fledged 470 • DISSENT Reports from Abroad rentier economy or whether it can become a twenty-first century productionist economy...

...In the days when nationalization of the means of production was the chief goal of Labour, a major argument advanced in its favor was that the owners or managers of the coal mines or steel mills were so stupid that only public ownership could secure efficient management of industry...

...Britain is producing hundreds of thousands of sixteen-year-olds without the hope of education and training...

...Indeed, one of the key reasons that the Japanese are buying into British industry is the hierarchical, obedient-to-superior relations that come with the work force in a rentier economy...

...There are other consequences that flow from choosing the rentier, low-skill, hierarchical path as opposed to the productionist, knowledge-developing, egalitarian path...

...Like a powerful candle drawing hordes of moths, Thatcher attracted more intellectuals to her side, more theory-spinners than any other British prime minister...

...The rentier economy forges a coalition of haves, of those who have some wealth stored in property, unit trusts, or shares, against have-nots...

...American, Japanese, and French companies now own all of the U.K...

...This is not a haphazard process based on government meanness...

...That one of them becomes prime minister is no excuse to condemn all the others to the vagaries of a rentier economy existence...

...Of the world's top fifty banks, Britain has only four compared with twenty-two for Japan and seven for Germany...

...What is being applied is a deliberate political strategy linked to the electoral needs of the Tories...

...Output in Dutch textiles and basic metals is twice the corresponding level in Britain...

...Despite all the rubbish about Thatcher's attack on the establishment and the rise of Tory meritocracy, egalitarian relations based on teamwork are decreasingly evident in contemporary Britain...

...A manufacturing economy is also about empowerment...

...The greening of the labor movement in Northern Europe and the fight for women's rights in the workplace are examples of the social spin-offs of productionist economies linked to a socially aware political culture...

...Productionist economies have to pay managers well and should (though often enough don't) pay workers well...

...Despite rhetoric and cosmetic changes, this government will not be able to tackle the education and training problems that now top the political agenda in Britain...

...30,000 in 1975, now worth ten or twenty times that amount, you are going to be in clover...

...Rentier economies do not implode or collapse under the weight of Marxist contradiction...

...At key moments in twentieth-century British history, such as Munich, Suez, and the destruction of manufacturing after 1980, they have taken decisions as a government that beggar belief...

...British industries were inefficient not because they were privately owned but because the workforce— including the managers—were not well enough trained to run them with innovation and excellence...

...One of them is that in a rentier economy employees have to work much harder...

...A Major government is incapable of moving toward a productionist economy because it would mean breaking faith with what it believes...

...Patent registration also reflects entrepreneurial skills in spotting opportunities in specialized journals or at the laboratory stage...

...The team-working consensual approach of the Japanese and the relatively small wage and salary differentials in Sweden and Korea are also marks of a productionist economy...