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September 7th, 2017

Britain in crisis: how societal divisions exist in the formation and resolution of crises

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Estimated reading time: 5 minutes

LSE BPP

September 7th, 2017

Britain in crisis: how societal divisions exist in the formation and resolution of crises

0 comments

Estimated reading time: 5 minutes

Christopher Kirkland explores two crises in British political economy: that of trade unions in 1976–9, and that of the banking sector in 2007. He argues that existing inequalities manifested themselves not only in the formation of those crises, but also within policy responses to them.

The term crisis, frequently used in politics, contains explicit negative connotations which ensure that additional resources are utilised, beyond the normal policy making processes, to overcome the effects of a particular event. But whilst it may be commonly accepted that crises require some form of liberation for those caught up in them, they are subjective and contested entities – the exact processes of deciding the composition of a crisis rest upon how a crisis is defined.

The parameters of blame themselves then depend on the definition used; a banking crisis, for example, is markedly different to a growth crisis. The first implies that changes are required to the banking sector whilst the second emphasises the rate of economic growth. To speak of an X crisis implies that X (be it an agent or action) could have produced a different result and that those responsible were aware of the alternative options available.

But within even the most straightforward of cases, a power relationship exists between those who are able to exert blame and those who are blamed. Such a relationship is further complicated if notions of blame are contested. Unless responsibility is taken for (the entirety of) what is perceived to have gone wrong, and such responsibility is accepted, crises offer scope for actors and agents to advance particular agendas.

My latest book explores and directly compares two crises in modern British history: the trade union crisis of 1976-79 and the 2007 banking sector crisis. Through offering a comparison of these crises, it demonstrates how inequalities can be transferred from normal policymaking to that in times of crisis. The key finding is that societal divisions manifest themselves not only in the formation of crises, but also within policy responses to them.

Through comparing these two events, I argue that the trade unions were over-blamed in 1976-9 and the banking sector was under-blamed for the crisis of 2007. Such inequalities stem from the initial definitions of what constitutes a crisis. That of the late 1970s was portrayed as one of a structural nature whereby Britain’s economic problems (as well as questions of governability) were portrayed as a product of wider labour-capital relations.

The second crisis was defined, at least initially, more in terms of agent’s actions. According to such narratives, the wider banking system was not broken or required legislative changes. Rather the economy could be returned to full health simply by altering the behaviours of individuals within the banking sector (or replacing them altogether). The redefinition of the crisis as one of spending ended up conflating cause and effect, and negated the importance of finding a new economic paradigm. Such inequalities were further enhanced by the resources available to each group: senior banking officials had greater resources at their disposal to defend themselves and their interests post 2007 than the trade unions did in the 1970s/1980s.

Credit: Pixabay/Public Domain

Crises also do not occur within vacuums, but interact with wider policies. It is often assumed that once a crisis is resolved, there is little merit in policymaking exploring further the causes (or effects) of that particular crisis. To put it another way, once blame is assigned and retribution (however defined) is achieved, the crisis is seen to be resolved, and no further action is necessary. Less thought is offered to the sustainability of the resolution. Another key argument of the book is therefore that the new economic paradigm which emerged out of the responses to the crisis of 1976-9 laid the foundations for the 2007 crisis. In doing so, the crisis of 2007 is viewed as having particular British elements to it due to profound changes in the British economy that occurred in the 1980s; in particular the trend towards globalisation signified through the reforms to the London Stock Exchange and the Big Bang deregulation of the financial sector in 1986, and the shift in the balance between labour and capital. These made the British economy increasingly reliant on house and asset prices, rather than on manufacturing capabilities and employment.

Defining the 2007 crisis as a particularly British one is not to imply that similar crises were not evident in other parts of the world simultaneously, nor is it to argue that the Thatcherite reforms of the 1980s directly caused events in the 2000s. Rather once events across the Atlantic and in Europe occurred, the composition of the British economy (i.e. the reliance on house price increases and stock market) was such that a crisis was the logical outcome of such events.

Within normal policymaking processes, it is commonly assumed that imbalances in power exist; some groups or agents have a greater propensity to advance their agendas and achieve their policy (orientated) goals. But outside these “normal times,” different power relationships are assumed to take priority. During times of crises, the traditional model of policymaking is assumed to be suppressed and the dominant power relationship is assumed to be between those able to instigate blame and those who are blamed. Whilst this relationship is important, the book argues that traditional power relationships (such as labour-capital distinctions) remain dominant in determining the trajectories of crises, and that such domination can question the effectiveness of policies aimed at achieving a resolution to the crisis.

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About the Author

Christopher Kirkland is the author of The Political Economy of Britain in Crisis. His research interests include British Politics, elections, and political economy.

 

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