“The Failed Experiment” by Andrew Fisher on 30 years of neo-liberalism

“The Failed Experiment” by Andrew Fisher on 30 years of neo-liberalism

Today is George Osborne’s Autumn Statement where we will have yet another tranche of neo-liberalism thrown at us in the form of another instalment of Austerity. So I thought it would be very pertinent to share with you the report of Andrew Fisher’s talk to last month’s Sheffield Trade Union Council meeting about neo-liberalism and the effects this has had on inequality over 30 years.

His talk was based on his recent book “The Failed Experiment” which can be purchased for £9.95p online direct from the publisher at http://www.radicalread.co.uk/latest-titles/6-the-failed-experiment with free p&p. He also blogs regularly at http://leapeconomics.blogspot.co.uk/ on a range of economics issues. 

Martin Mayer Secretary


National speaker: Andrew Fisher London Economic Advisory Panel (LEAP) and author of “The Failed Experiment” an economic analysis of neo-liberal economics over the past 30 years

Andrew began his talk by illustrating how the politics of austerity uses divide and rule tactics to divert attention from the real causes of peoples’ misery – by pitting workers v pensioners; public sector v private sector; black v white; benefit claimants v the rest. George Osborne has tried to blame high public spending on teachers, civil servants etc for the economic crash. Yet public spending was going down under the last Labour Government and had fallen below that of the Tories as a percentage of GDP by the time of the crash in 2007. Ed Balls blames the crash on the economic crisis in USA e.g. collapse of Lehman Bros in 2008. Yet the collapse of Northern Rock in 2007 predated the fall of Lehman Bros and had its roots in the structural imbalance in the UK economy which by 2006 had the smallest manufacturing base in the G7 and the largest banking sector (which was dangerously unregulated). In fact a low production economy in which huge wealth is extracted for the few was the ultimate result of the neo-liberal project started over 30 years ago under Margaret Thatcher.

The failures in our housing market and the labour market can be traced back to this. Between 1979 and 1997 1.7M council houses were sold off but now the majority have been sold on as buy-to-lets owned by private landlords. Over the same period housing benefit rose 450% to pay for ever rising private rents. Rent controls were ended altogether in 1989. In London the average house price is now £512,000 equivalent to 14 x average salaries, and inner London boroughs are shifting tenants to cheaper rented housing in Basildon and Swindon.

There has been an absolute decline in wages of 10% since the Coalition Government was elected in 2010; accelerating a long term trend that has seen wages decline as a proportion of GDP from 65% in 1970’s to less than 55% today. Tony Benn once said that “Democracy transferred power from the wallet to the ballot” but Margaret Thatcher has privatised so much of the economy that democratic control itself is threatened. The transfer of wealth from the poor to the rich is stark. Just in the last year the richest 1000 Britons increased their wealth by £70B. In 1979 the poorest 10% paid 35% of their income in direct and indirect taxes whilst the richest 10% paid 37%. By 1997 the poorest 10% were paying 44% of their income in taxes (mainly due to the massive hike in VAT) whilst the richest 10%’s contribution fell to 34%. Not only has private wealth shifted massively from the poor to the rich but privatisation did the same. The huge inequalities in our society mean that the long awaited but fragile recovery is undermined by lack of consumer demand. It can hardly be called a recovery when even under Government’s own figures 80% are worse off!

Part of the answer must be a return to public ownership – run for the public good not an extraction of public wealth for private profit. East Coast rail franchise is a particularly good example of a publicly owned company outperforming the privatised rail franchise. Since National Express handed the keys back on its franchise. East Coast has paid over £1B in revenues back to the Treasury – yet the Tories still want to reprivatise it!

In the Tories NHS “marketplace” they talk about failing hospitals. Yet these are not hospitals failing to tend to the sick. They are struck by a funding crisis caused by austerity spending cuts on the one hand and crippling PFIdebts on the other which have left a legacy of £350B debt on assets worth£50B!

A similar story applies to pensions and benefits. British State Pension used to be 25% of average earnings but today is merely 15% and ranks the lowest in Europe after Malta, Estonia and Latvia. State Benefits for the unemployed are just £72 per week and only £56 per week for under 25’s. An ever stricter regime of sanctions has seen even those benefits stripped away – the main reason for an ever increasing number of food banks in UK – the sixth richest country in the world.

Trade union and workers’ rights have been cut and wages are further undermined by “workfare” in which benefit claimants are forced to work for free and receive only their benefit payments. This Government has seen a huge increase in apprenticeships – which may sound a goof thing but when apprenticeships training on shelf stacking at Tesco’s receive only £2.50 per hour it is clearly yet another abuse to provide cheap labour to big profitable employers. In our deregulated labour market, employers are using agency labour, zero hours contracts and bogus self-employment to drive down their labour costs and shift the burden of responsibility from the employer to the worker. Meanwhile highly profitable companies are allowed to sack workers with impunity e.g. our publicly owned Lloyds Bank which made£1.7B profit last year has sacked 30,000 staff since 2009 and is laying off a further 9000 staff this year. In France this political issue is being raised seriously by the Left.

The question is: do we want an economy that works for us or one in which we work for them? He suggested trade unions can provide some alternatives for workers e.g. UNITE now provides a credit union service for its members. This is not just an economic crisis but a political crisis too in which workers interests are no longer represented.

Questions and comments from the floor included:


·         There is pressing need for political education for trade unionists/activists on the economics of neo-liberalism and the alternatives

·         We need to fight back for a socialist future – not just a return toKeynesianism

·         Fightback is possible – look at US fast food workers for instance

·         If no socialist alternative is available, UKIP and far right parties will fill the void

·         Massive personal debt makes working people vulnerable – and hesitant about fighting back

·         Trade unions are not bold enough – accepting below inflation wage awards for instance

·         The mass media is captured by the right wing – makes it difficult to get our ideas across


Andrew responded by making the following points:

Between 1945 and 1975 – when the welfare state structure was at its height – we had the best growth rates, exceeding anything we’ve had since. He believes the current decline in living standards cannot continue – there will be a reaction. Will it be UKIP? Obviously he hopes not. In other countries the left of centre social democratic parties were swept away and new left parties have to come to the fore e.g. Greece and Spain.

Mass media is an obstacle but alternative media is a fantastic opportunity which we never had before.

Debt is a class issue. We wrote off the bankers’ debt, but we won’t do the same for student loans or baling out the poor? Tenant evictions are at an all time high due to mounting rent arrears. Unsecured debt was 168% of income at the time of the crash (the highest in the world after Holland). Now it’s 153% and rising by £1B per month


Andrew finished by offering a limited number of copies of his book “The Failed Experiment for £8.95.


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