The callous caretaker

Paul Sagar
November 17, 2013

When Margaret Thatcher died, social media sites in Britain exploded  with polarized opinions. As well as splitting along obvious class  lines, those either cheering a death or paying tribute to the ‘greatest  leader in the post-war era’ could, to a large extent be grouped by  geography: those of northern provenance tended to bunch differently from  the rest. Some of the bile and vitriol of the first group was  tasteless, no doubt. Predictably, those who professed outrage at such  outpourings of hatred largely missed the point (sometimes quite deliberately) that the tastelessness was not simply vindictive, but born  of a sense of righteous justification. Yet any victory for the haters  was clearly pyrrhic. Thatcher’s death was at best a consolation; a booby  prize providing the briefest of distractions from the fact that whilst  the woman might be dead, her spirit lives on with a vengeance.

Altogether more interesting is the response from Thatcher’s admirers.  We all knew the clichés already, and her death provided only an  opportunity to rehearse them together at once. This was the woman who,  as David Cameron put it, ‘saved Britain’, whilst according to Tony  Blair, she was a ‘towering’ leader who put Britain on the track to  prosperity by breaking the hold of the unions and ushering in economic  modernity. This – the mythos of the right – is why she was a Great  Leader. Compared to her, grumble many Tory ultras, her ideological  descendants on the Government front bench are mealy wets of the sort  Thatcher herself despised, unable to complete the great transformation  she started. Inconvenient facts are, as ever, overlooked. The same Prime  Minister who pledged to roll back the state consistently saw it swell  in size and cost. The champion of British independence handed over, when  she signed the Single European Act, more British sovereignty to  European bureaucrats than anyone before or since. But those are details,  and everyone either knows or ignores them and has done for a long time.

But what if the central plank of the right’s narrative of the great  leader is simply wrong? What if Thatcher didn’t force through a period  of radical economic change, but was merely the caretaker of processes  much deeper and more powerful than she herself ever was? A caretaker,  whose main contribution was to add cruelty and callousness to economic  processes of change that were set in motion long before she came to  power?

One obvious piece of evidence supporting this hypothesis is the brute  fact of Ronald Reagan. The reforms Reagan oversaw in the 1980s  fundamentally changed the American political and economic landscape, to  the point where the two Democratic presidents that have held office  since can comfortably be classified as to the right of Nixon. For  despite going down in infamy thanks to the Watergate scandal, in  practice Nixon continued the LBJ reforms of the 1960s, and his economic  policies would now be regarded as a species of communism by much of what  has – in no small measure, thanks to the legacy of Reagan – become the  mainstream American right. Yet if the old economic adage that when  America sneezes Britain catches a cold holds any truth at all, then the  political-economic corollary certainly applies, too. Thatcher’s  ideological soul mate wrought changes that redefined the US political  landscape, and the impact has been felt on this side of the Atlantic.  But then, this way of looking at things merely shifts the Great Leader  hypothesis one stage further back. What if Reagan, too, was mostly  caretaking?

Reasons for questioning the Great Leader hypothesis emerge if one  delves into the murky waters of Britain’s complex relationship with its  vast tax haven network in the 1960s and 1970s. Doing so opens up a  startling story of how the growing power of international finance left  governments vainly locking stable doors after horses had bolted, before  eventually deciding to let them run as free as they liked.

A good place to start is with an internal memo sent by Inland Revenue  officials to their Treasury colleagues on October 18th, 1967. Appalled  at the huge levels of revenue being lost to illicit and barely-licit  avoidance schemes by wealthy individuals and corporations, the Revenue  desperately appealed to the Treasury’s greater might in shutting down  such practices. They pessimistically noted that whilst we ‘do not  suppose that the Treasury will be able to help us in this…we feel we  must leave no stone unturned’. The desperation was palpable: ‘Even a  piece of gossip that Mr X. was thought to have made such a transfer  would be some help, because we might not hitherto have suspected Mr X.  and we can then at any rate launch an attack on him by requesting  information’. Despite initial scepticism that it could help, the  Treasury soon became strongly sympathetic to the Revenue’s cause. Not,  however, because it was especially concerned about tax revenues. During  the 1960s, its main priority was capital controls.

With Britain operating a fixed exchange rate and ‘Keynesian’ economic  management, it was imperative to manage the movement of currency in and  out of the British economy and the wider Sterling Area it controlled.  Crucial to economic policy was control of the balance of payments (the  difference between the value of imports and exports), which in turn  allowed central government to run targeted taxation and spending  policies so as to manage the overall level of demand in the economy,  only possible with a minimum of external interferences. Employment and  inflation were indelibly linked to the matching of national aggregate  supply and demand for goods and services, which in turn depended on a  well-managed balance of payments, achieved by keeping Britain’s exchange  rate pegged at a fixed level. Government policy dictated that money  could be moved in or out of Britain only with official permission. (Even  withdrawing funds to go on foreign holiday required such permission.  Professor Sol Piccciotto, of the University of Lancaster, once showed me  his passport from the period, filled with pages of official stamps  detailing how much currency he was entitled to take abroad at any one  time). Yet Illicit and disguised avoidance schemes – especially of the  scale the Revenue was reporting – directly undermined this central  economic imperative by allowing individuals and corporations to move  capital without government knowledge or permission, distorting and  upsetting the balance of payments. Tax evasion (illegal) and tax  avoidance (technically legal, but usually only with the help of good  lawyers and accountants) were emerging as serious economic problems:  such activities undermined British capital controls, and hence national  economic policy.

Even worse, the territories facilitating such practices were  frequently dependencies of the British Crown, meaning they were inside  the sterling area but not under the direct control of Whitehall. They  were also granted economic privileges such as the ability to set tax  rates and decide banking legislation, which they rapidly began to  exploit in the post-war era. Given that, just a month after Treasury  officials were alerted to the tax haven problem, Prime Minister Harold  Wilson would be forced into the humiliation of a sterling devaluation,  it is safe to say that the activity of British tax havens would have  come under increasing disapproval in Whitehall at that time. Although  the Channel Islands and the Isle of Man would later emerge as leaders of  the illicit financial secrecy world, in the late 1960s it was the  Caribbean that appeared to pose the biggest threat. (Some fun facts:  today there are over 18,000 companies registered to a single building in  the Cayman Islands, whilst the tiny Channel Isle of Sark boasts 24  registered companies for every human being on the island. Safe to say  that since the 1960s, the growth of world tax havenry, especially in  British-affiliated territories, has only accelerated.)

The Caribbean was prominent for several reasons. Most important,  however, was that because of the relatively desperate economic outlook  of these territories, the more adventurous were increasingly prepared to  co-operate in any way desired by wealthy outsiders seeking to hide  money. Although Bermuda and the Bahamas were long-established as places  to avoid estate dues, or to set up secret trusts to avoid  domestically-owed taxes, in the 1960s the Cayman Islands emerged as  promoter of the most aggressive schemes whose purpose, as one Revenue  official put it, ‘blatantly seeks to frustrate our own law for dealing  with our own taxpayers’. As Cayman brazenly expanded its activities,  poorer neighbours wanted a piece of the action. The tiny Turks and  Caicos Islands began emulating Cayman, much to the alarm of Revenue and  Treasury officials desperate to avoid ‘yet another’ tax haven in the  sterling area. Yet whilst we still mostly refer to these territories as  tax havens, and tax avoidance and evasion are certainly something they  facilitate, in reality what they’ve always more fundamentally provided  is banking secrecy. Environments in which money can conveniently  disappear and then reappear; in which companies that never do a day’s  trading can be registered so that books elsewhere can be made to  balance; where money can be squirrelled away without anybody asking – or  even more importantly, telling – where it came from or where it is  going. In the 1960s the Caribbean was hosting a race to the bottom as  each territory offered more and more secrecy with less and less  oversight, to whoever happened to have the cash. In the early Wild West  days of Caymanian financial aggression, suitcases of money and diamonds  were flown into micro airports before disappearing into ‘banks’ that  were little more than brass plaques on walls, a practice established in  Switzerland and Lichtenstein in the 1930s, as described in Nicholas  Shaxson’s riveting book Treasure Islands. By the late 1960s, British tax  revenues and capital controls were starting to seriously suffer. That  made it a national economic issue.

But the problem wasn’t just domestic. Alerted by the Treasury, the  Foreign Office was also alarmed. Crown territories supplying secrecy to  anybody who had the cash did not represent a prudent international  strategy. For a start, the Americans and the French were growing  increasingly upset about British territories undermining their tax  regimes and exchange controls. The Americans were particularly  aggrieved, ‘deploring’ British encouragement of tax havenry because the  Caribbean’s proximity meant Island banks were deliberately targeting US  investors. France ‘animadverted on the prevalence of paradis fiscaux as  yet another undesirable feature of the Sterling area’. More generally,  tax havens were themselves potentially deeply unstable. Small  populations lacking well-run political and economic infrastructures  might not cope well with vast influxes of cash and the corresponding  social divisions that moneyed elites would bring. In an era of increased  political identification across post-colonial ethnic lines, there was a  significant race dimension to the potentially explosive politics of  Caribbean territories. Most of the moneyed newcomers, brought into  manage accounts and look after brass plates, tended to be white, unlike  the impoverished island residents expected to wait upon them. And in the  era of decolonization, it was particularly undesirable for emerging  African dictators in failing regimes to be using British territories to  hide ill-gotten loot they were stealing from their populations. By the  end of the 1960s, the Foreign Office joined the Treasury and Revenue in  determining to put an end to British provision of illicit financial  secrecy.

But not everybody agreed. The then Ministry for Overseas Development  (later to become the Department for International Development) objected  that these territories simply had nothing else to offer: the only  alternative for ‘colonial pensioners’ was a lifetime of dependency on  the ‘British dole’. Overseas Development recommended instead that  Britain send trained financial advisors to its territories, to teach  them how to provide secrecy properly, to make sure it was done right.  The Treasury and Revenue balked at such suggestions, closing them down.  Much more important, however, was the Bank of England, to whom the  Treasury appealed for data and expertise. For the Bank had very  different ideas about where its priorities lay, and whose interests it  existed to serve.

Repeatedly declining to co-operate with a working party established  by the Treasury, Foreign Office, and Revenue, the Bank dragged its heels  and refused to share meaningful information. When asked for data it  would delay for months before sending across a handful of irrelevant  numbers, citing confidentiality as an excuse. As the months dragged by,  it became increasingly clear that the Bank had no intention of helping  the Government. Acting as the champion of the interests of the City of  London, the Bank protected the benefits British finance was steadily  reaping from the exploitation of banking secrecy. For what  British-affiliated tax havens facilitated was the ability for banks and  other financial institutions to move money quickly, and without  disclosure, in and out of the sterling area. This meant avoiding both  the interest of government officials, but also the delays associated  with having to acquire permission for capital movements. Due to the  impact on the balance of payments this was of direct detriment to the  British revenue and central economic policy. Despite being a  nationalized institution, therefore, the Bank of England consciously and  deliberately obstructed the attempts of Whitehall to administer  economic policy in what was perceived to be the national interest. (La  plus ça change, some might say.)

Realising that the Bank would not be forthcoming with assistance, the  Treasury, Foreign Office, and Revenue pressed ahead under their own  steam. Painstakingly putting together reports, organizing fact-finding  visits to tax havens, and co-operating on cross-departmental lines,  civil servants eventually produced a lengthy report on Britain’s tax  haven problem, finalized and published in 1971. Although the bulk of the  document was divided into three corresponding parts to reflect the  relative concerns of each department, it nonetheless opted for a strong  line in order to clamp down on British territories engaging in abusive  financial practices. And at first the report appeared destined to become  more than just another shelf-filler. Public awareness of tax haven  issues was growing, with questions being raised in Parliament and enough  of a head of steam built up within Whitehall for memos to emerge  indicating that the Minister of Finance, and Treasury Ministers of  State, were taking a direct interest, keen to implement the findings of  the report and end the ‘quite uncivilized’ behaviour of Cayman and its  emulators.

But just as all seemed about to change for Britain’s tax havens, it  didn’t. At this point the historical record becomes decidedly murky, a  clear picture hard to obtain. Noticeably, the individual civil servants  who for years doggedly pursued the tax haven issue suddenly disappear  from the records. Coincidence, or were they purposefully moved on? We’ll  probably never know. In any case, their replacements thought the tax  haven issue irrelevant, and promptly shelved the report it had taken  four years to painstakingly assemble. But also, and undoubtedly more  importantly, 1972 saw a fundamental change in the global economic game.  In 1971 Nixon had ended dollar-gold convertibility, heralding the end of  the Bretton-Woods era of international economic agreement that  underpinned domestic Keynesian tax-and-spend policies. This decision had  a massive impact on Britain’s ability to keep a fixed exchange rate and  manage its balance of payments, and in turn its domestic economic  management. Following Nixon’s action, in 1972 Britain contracted the  Sterling Area and placed the Caribbean territories outside exchange  controls, in a rearguard effort to keep a grip on the exchange rate.  (One which would eventually fail: Wilson was forced into a second,  credibility-eroding sterling devaluation in 1976.) The Treasury and  Foreign Office lost their main incentive to care about the activities of  Britain’s Caribbean tax havens, and interest immediately waned. Indeed,  if anything the Treasury now began to see tax loss as small beans  compared to the capital that could be diverted into the City of London  out of North America and other countries via Britain’s tax haven network  operating under the watchful guidance of the Bank of England. Nothing  changed for the beleaguered Inland Revenue. But this minnow of a  department could pack no punch on its own. (This conspicuously continues  to be the case today: compare the political attention currently paid to  the £1.3 billion lost annually to benefit fraud, to the £30 billion tax  gap estimated by HMRC arising due to tax avoidance and evasion.) After  1972, the impetus died, and Britain’s tax havens received freer rein  than ever.

The ongoing relation between Britain and her secrecy jurisdictions  was not, however, without irony. Having initially shelved the original  working party report, the next generation of Treasury civil servants  soon found themselves drawn into the morass of tax haven skullduggery.  As outrage at offshore financial activities grew, the issue was forced  back onto the agenda. In 1974 the so-called Lonhro scandal erupted,  revealing extensive tax evasion and corporate corruption centering on  Caymanian financial services, but indelibly connected to UK individuals  and companies. A flurry of activity in Whitehall followed as government  ministers prepared to face tough questions in Parliament about the  extent to which the UK did not adequately control territories  facilitating corruption in the metropole. Around the same time,  Chancellor Dennis Healey received a correspondence from an outraged  constituent on the matter of tax avoidance and evasion, along with a  copy of the magazine Tax Haven Review, apparently intended for bankers,  lawyers and accountants, which had mistakenly fallen into the  constituent’s hands. (We know that Tax Haven Review was not intended for  a wider audience, because the subscriber information promised that to  ‘maintain the confidentiality of this privately circulated newsletter,  the full name of Tax Haven Review will not appear on the envelope’. Tax  haven activities were accorded the public unacceptability of something  like pornography: going in for this sort of thing was clearly best kept  private.) During the 1970s the Channel Islands and Isle of Man came into  their own as leading providers of financial secrecy, co-operating  overtly with the Bank of England in hosting conferences advising  individuals on how to avoid UK-owed tax. The MP Tony Benn indignantly  forwarded a letter from one of his constituents on to Healy, which  objected to the Bank’s openly colluding in tax avoidance schemes in a  process that was surely ‘just a bit too sordid to be true’. By the  mid-1970s it was apparent that contracting the sterling area had not put  the genie back in the bottle. On the contrary, Britain’s tax haven  network was still leaking capital and damaging the UK balance of  payments, due to the secrecy it provided. The Channel Islands had now  joined the game at maximum pace. The Treasury was still powerless in  getting things under control. The new generation of civil servants, who  in 1972 had dismissed their predecessors’ working party as irrelevant,  belatedly came to admit that the findings of the earlier report remained  troublingly relevant, and ought to be revived.

But in 1979 the changes made in 1972 were effectively repeated, but  now at full throttle. Following the collapse of Bretton Woods, and the  perceived failure of Keynesian economic policy at home, the new Thatcher  government abandoned capital controls and moved the UK to a floating  exchange rate. It is worth asking why capital controls had to be  abandoned. Certainly, the perceived and real failure of Keynesianism,  and the ushering in of the era of monetarism – which demanded open  borders and floating exchange rates as taxation and spending were  superseded by the setting of base interest rates as the primary tool of  economic management – can only be explained via myriad complex and  interconnected factors. Of particular importance is the end of the  post-war boom, American economic policy after the decision to abandon  dollar-gold convertibility, and the oil shocks of the early 1970s. But  not insignificant is the fact that by the end of the 1970s the  enforcement of capital controls was anyway becoming impossible for  clunking government administrators of all nations. The invention of the  telex machine, in conjunction with cheap access to transoceanic phone  lines, meant that those willing to bend and break financial rules could  move money in and out of jurisdictions far faster than government  officials could chase it down or keep track of it. Tax havens, and the  secrecy they provided, played a crucial part in this. One did not need  to physically fly money into the Caribbean if one had a trustworthy  banker with a good telex connection, and space for a brass plate. In  significant measure capital controls were abandoned by the end of the  1970s because they had anyway became increasingly unworkable, in no  small measure thanks to global finance deepening its ongoing love affair  with cross-border technology. By 1979, capital controls increasingly  couldn’t be maintained, because multinational financial institutions, in  conjunction with secrecy jurisdictions, were helping make state  regulation of currency flows across borders all but impossible.

What has all this to do with Thatcher’s disputed status as a great  leader? The point is to ask whether Thatcher stood to the entire British  economy as the Treasury stood to capital controls and the desperate  attempts to secure the sterling area in the 1970s. Was the game already  up by 1979, the times well and truly a-changed? Was ‘Keynesian’ economic  management dead, a move to monetarism and open border capital flows  inevitable in a globalizing world in which financial technology dictated  a change in the rules? If so, when Thatcher imposed monetarism at home,  it was not a brave decision taken by a visionary leader, but a  political-economic inevitability anybody in Downing Street would have  been forced to follow sooner or later. What wasn’t inevitable was the  way the transition was conducted. The assault upon industrial  communities. The spy operations and violent confrontations against trade  unions. The wholesale removal of worker rights and protections. The  deliberate abandonment of entire swathes of the population to poverty  and misery. The vindictiveness with which desolation and destitution was  permitted to destroy the lives of the no-longer-working poor, told they  had nobody to blame but themselves. The labeling as ‘enemies within’  individuals who were trying to protect their families and livelihoods.  An ideology of selfishness and greed trumpeted as enlightened  benevolence. The ‘Big Bang’ in financial services, which didn’t so much  give the horses free reign as pump them full of steroids and put them on  the long stampede that would eventually take them over the cliff of  2008.

But if, indeed, none of those things needed to happen, what is left  of Thatcher’s legacy, and especially the mythos of her party? Certainly,  there is not much substance to the idea of her as a great leader, an  economic visionary with the iron will required to see through change  that would otherwise not have occurred. No matter how much strategic  acumen she demonstrated in her confrontation with the trade unions,  there is scant evidence that she and her chancellors were ever really in  control of the economic changes they presided over. Instead is the  image of the heartless caretaker, indifferent to the suffering of  communities whose economic base was being removed almost overnight with  nothing put in its place, that comes out most clearly.

It is a platitude to say that Thatcher reshaped British politics. In  some ways it is of course immeasurably true: Tony Blair is proof enough  of that (although without Reagan there would have been no Clinton, and  that matters to the New Labour story also). The current coalition  government has taken up Thatcher’s spirit with vigour, whatever the more  extreme sections of its backbenches claim. Indeed, after the pause  afforded by New Labour – those 13 years were at best an interlude and no  sort of reversal – they are taking it far further. The present crop of  Tories (the Lib Dems are largely an irrelevance when it comes to hard  policy-making) has done what even Thatcher didn’t dare: launch a frontal  attack on the NHS, and begin the slow process of dismantling and  siphoning off that will probably end in privatization and some sort of  insurance-based system.

But again, we must be wary of the cult of the individual in political  explanation. How much is down to the personalities of Cameron, Osborne,  Lansley, Willetts et al? It is a persistent misperception that the  British welfare state was enacted out an egalitarian spirit of socialist  goodwill. If that had been the case, no government would ever have  managed to secure the broad support required to establish or sustain it.  Rather, Tony Judt got things right when he wrote that:

the twentieth-century ‘socialist’ welfare states were constructed not  as an advance guard of egalitarian revolution but to provide a barrier  against the return of the past: against economic depression and its  polarizing, violent political outcome in the desperate politics of  Fascism and Communism alike. The welfare states were thus prophylactic  states. They were designed quite consciously to meet the widespread  yearning for security and stability that John Maynard Keynes and others  foresaw long before the end of World War II, and they succeeded beyond  anyone’s expectations. Thanks to a half-century of prosperity and  safety, we in the West have forgotten the political and social traumas  of mass insecurity. And thus we have forgotten why we have inherited  those welfare states and what brought them about.

With the collapse of the communist regimes in 1989-90 went also  (albeit unfairly) much of the plausibility previously attached to social  democratic welfare liberalism (another point made by Judt in his final  works). With the supposed ‘end of history’, what has come to be known as  neo-liberalism has marched ever onwards. But why? Because of Thatcher  and Reagan and their courageous personalities? Or because of the rise of  global financial power, as accelerated immeasurably by technology –  think of what the internet is now to the telex machine – changing the  way the game can be played between sovereign nations and global finance,  the backbone of modern capitalism, as 2008 made painfully clear. It is  both a platitude to say (and yet, perhaps, remarkably under-explained  and –appreciated outside of specialist circles), that the rise of the  multinational corporation changes the nature of international political  economy, and the options available for leaders of sovereign nation  states. What the failure of British civil servants to get a grip on the  activities of tax havens in the 1960s and 1970s illuminates is the  period of transition between what we might think of as western post-war  industrial capitalism of the period 1945-79, and the financial services  driven capitalism which came to replace it in the 1980s down to today.

But if neo-liberalism, and the sort of western democratic society  that goes along with it, is the only available option for modern states –  and nothing else is on the table, China clearly not being a desirable  alternative for people anything like us – the future begins to look  bleak. We have (thankfully) lost the external and internal threats of  communism and fascism that provided the impetus for the provision of the  welfare states we have inherited. But neo-liberalism is cruel, cold and  powerful. It does not, if allowed to flourish in isolation, support  systems of support for the destitute, at least above the bare minimum  needed to prevent domestic unrest out of sheer desperation. The task now  is to prevent, or at least mitigate, outbursts of the sort witnessed in  the riots of London and other British cities in August 2011. It is not  to counter organised political revolutionaries with a structuring  ideology. This new task can be achieved relatively easily, with a  repressive state apparatus operating via police and punitively  retributive courts, and by emphasizing the threat of the ‘feral’  underclass to the no-longer-so-prosperous classes just above them. What  it does not require is a genuine welfare state: an NHS and a safety net  providing support for the unemployed, the disabled, the unlucky.

This goes a long way towards explaining why the present government is  removing the welfare state inherited from a different era. It is not a  pretty picture. Hardly inspiring, either, fostering as it does a  significant sense of hopeless powerlessness. And here I disagree with  Judt. His diagnosis was accurate, but his belief that we could revert to  the social democratic welfare states he championed strikes me as  hopelessly naïve: a relic from a different era of capitalism that is not  coming back.

David Runciman has recently argued – most publicly in the London  Review of Books – that democratic regimes are typically criticized from  one of two directions: as being either a confidence trick, or as falling  into a self-defeating confidence trap. According to proponents of the  confidence trick view, democracy is a sham, a façade behind which a  ruling elite more or less secretly sits. When the chips are down, true  power shows its face, and illusions of rule by the people are dispensed  with. On the confidence trap view, by contrast, democracy is all too  real, but that is precisely why it is terminally incapable of dealing  with crisis. The people are shortsighted, greedy, selfish and cowardly:  when faced with real crises, democracies put off tough decisions and  either collapse outright, or cease to be democracies in order to  survive. In either case, say its detractors, democracy is not build to  last.

Runciman does a convincing job of showing that both these attacks are  misguided. Modern representative western democracies are dynamic  entities that learn from their mistakes when they need to, and exhibit  such multifaceted qualities that they always prove to be more nimble –  as well as complex – in practice than their detractors paint them in  theory. With the possible – and significant – exception of the challenge  faced by climate change, Runciman is confident that not only is  democracy for real, but it has the most advantages, and is best placed,  to see out the century, even when compared to the emerging rival of a  Chinese model which looks, in the short term, to have the upper hand.

But there is another vision, neglected by Runciman, which tracks his  view quite closely in all but its final optimism. This view agrees that  western representative democracy is dynamic, nimble and adaptable. But  it also emphasises that democracy is umbilically connected to modern  capitalism, and that the interplay between the two is one of the things  that makes democracy good at surviving and renewing itself. But  surviving and renewing itself in what form? Democracy may well continue,  but if the trajectory of the past 30 years is extended for the  foreseeable future (and there’s every reason to think that’s what will  happen), the world we are faced with is one of rampant inequality,  growing destitution for the increasingly disenfranchised and expanding  underclass, political mistrust between the haves and haven-nots, and the  expansion of the reign of selfishness and greed to all areas of public  life. On this view, the danger is not that democracy – coupled as it  must be with capitalism – will fail, but that it is altogether too well  placed and adapted to succeed.

In the recent science fiction film ‘Looper’, a society of the  near-future is depicted with unnerving clarity. In tomorrow’s America,  the vast majority live in a semi-lawless existence, abjectly poor and  scraping out survival through violence and desperation, whilst a tiny  super-wealthy elite live apart, as though in another world. That future  West has decayed, is atrophying almost to the point of breakdown. The  momentum of history has moved to China, a society more prosperous than  ours, but hardly more desirable in its social constitution. The  disturbing thing about ‘Looper’ is how near – in both chronology and  trajectory – it looks. When America catches a cold, what happens to  Britain? In any case, the future is not bright. There are forces on this  earth far more powerful than caretakers, however callously they sweep.

A correction was made to this article on November 17th 2013 at  18:08. It originally suggested that Thatcher signed the Maastricht Treaty (which she didn’t), rather than the Single European Act (which she did).


All by
Paul Sagar