Old City and New Times

This chapter examines the relatively distinct economic and political logics behind government attempts since 1979 to make the City more flexible. ¹ We will describe the neo-liberal accumulation strategy intended to save Britain from economic decline and the ‘two nations’ popular capitalist political strategy which is meant to save us all from creeping socialism. Although we believe that there is a strong strategic element to Thatcherite politics and policies and that the best way to make sense of Thatcherism is to explore its strategic dimensions, we do not claim that there is one single, overriding strategy: the strategic line is emergent and ten-dential, subject to change or reversal in the light of new circumstances, and even includes important ad hoc elements as well as broader, long-term objectives (cf. Jessop et al. 1989; Stones 1990). Thus we will argue that, although they have both been clearly discernible as key elements in the emerging strategic line of Thatcherism from 1979 onwards, the purpose, weight and vehicles of neo-liberal and popular capitalist objectives have changed several times. We will also argue that, in certain crucial respects, these twin strategies are internally inconsistent, individually self-defeating and mutually contradictory. In particular we will suggest that the Thatcher government’s neo-liberal strategy was ill-suited to the needs of the intense international race for modernisation and that it was further deformed through their concern to secure political support through popular capitalism and social division. Our essay proceeds in five steps. First we describe the emerging crisis in the City to which the neo-liberal strategy represented one possible response; then we describe the rise of Thatcherism and assess its general political significance; third, we describe the attempts to make the City more flexible; fourth, we show how the neo-liberal strategy has been deformed by political considerations; and, finally, we show how Thatcherite strategies have made things worse economically and, if continued, will go on doing so.