The ‘Enterprise Economy‘

Arthur Marwick: British Society since 1945, Chapter 20

Jasmin TerraschkeSebastian HeinrichsKatharina PartekEvelyn Zitzke

OutlineI • Production statistics, evaluation

• Main features of the Thatcher Government concerning economy

II • Growth in small business• Multi-Nationals• IT• Privatization

III • Sponsorship- main protagonists- figures

IV • Economy and safety- working conditions- tragic disasters

Statistics 1/2: Table

Statistics 2/2: Explanation

The Table shows the indices of production between 1976 and 1986

→ Illustrates most important aspects of economic change

e.g. Declines in manufacturing industries → E.g. Coal industry decreasing after 1980

e.g. Revival of industries → Upturn in iron and steel in 1985/ 86

evidence of striking growth in ‘post industrial’ industries → E.g. main areas: Computer and office

machines other striking figures: e.g. rise in soft drinks

The Thatcher Government 1/2

1945 – 1970s: Economic orthodoxy of most politicians was KEYNESIANISM

→ As a consequence of this doctrine, the prime duty of the government was to secure full to near-full employment

Importance of maintenance of welfare services

Thatcher Government→ wanted a culture with thriving enterprise, a steady value of the pound and (more) individual freedom

The Thatcher Government 2/2

Monetarism: Strict control of money in circulation esp. by limiting government

borrowing and spending

Thatcher Government also wanted reductions in direct taxations on economic principle → consequently hard work and enterprise would be encouraged;

disposal of income should mainly rest with individuals

Main philosophy: economic decisions which would support the country were those of the free market-place [without any influence of the government]

Government didn’t manage to stick to the borrowing limits, but nevertheless a policy with ‘monetarist flavour’

1972: Growth in Small Business

‘Swing of certain circumstances’: e.g. rise in oil prices, consumer orientation towards specialized services

‘Lust after bigness’ (Post-War Years: 60s) → ‘small was beautiful’ (70s)

‘Enterprise Culture’: Electronics and microprocessors opened opportunities Thatcher Governments supported SB by grants, loans and tax relief ‘venture capitalism’ (companies investing in SB)

‘Multi-Nationals’ Foreign firms invested in SB (‘venture capitalism’) Government supported multi-nationals MNs had considerable power over jobs

Marwick: ‘The free market included the freedom to reduce freedom’

New style of industrial relations, established by overseas companies No-strike agreements Reduced power on the shop-floor Exaction of a high level of company loyalty from the

employees ↕

Greater worker participation in decision-making A less distant management

IT 1/2

‘What is IT?’ ‘includes computers and office machinery, telecommunications,

and electronic video and satellite equipment’

In early 80s innovative, robust home computer industry

BUT unsupported by Government undercapitalized lack of access to and penetration of wide markets

Clear signals of an enterprise economy

IT 2/2: The Importance of IT

IT Brought redundancies Created new job opportunities and sources of prosperity Polarized working skills between

‘those who understand something of the principles involved’ ‘those who simply assemble components’

IT is important for Service trades based on it Political and administrative developments Banking, policing, newspapers, telephonic communication, TV,

video and other entertainments

IT created ‘banks of information’

Privatization Marwick: ‘selling off to private buyers nationalized

industries and other Government-owned assets’ Some of the main sales between 1983 and 1987:

Jaguar Cars British Aerospace Britoil

Critics: ‘selling of the family silver’, since prices seemed over generous to purchasers

Commercial Sponsorship of Sports Goes back to 19th century Main protagonists → press → they created events which

could be extensively reported Oil companies were interested in motor racing 60’s → critical changes began the sports council set up a working party first major investigation outside sports = SPONSORSHIP

(1973) → commercial research body System Three reported that in the last ten years there had been “a massive increase in the industrial support given to sports and, less dramatically, to the performing arts”

SPONSORSHIP = “an additional marketing medium for influencing a wider public”

(or Cultural Activities)

Sponsorship figures 1/2 1. motor racing (₤ 3 Mio.) 2. horse racing (₤ 700,000)3. golf (₤ 500,000)4. association football (₤ 300,000)5. cricket (₤ 270,000)6. arts (₤ 250,000)7. tennis (₤ 230,000)

total ₤ 16 Mio in 1978 ₤ 20 Mio in 1981 ₤ 40 Mio according to the

Compton Report (later figures refer only to sports sponsorship)

Sponsorship figures 2/2

80’s → Sport sponsorship rose to over ₤ 60 Mio according to 1983 Howell Report for the Central Council of Physical Recreation

Motor sports (₤ 19 Mio)

football (₤ 12 Mio)

commercial spirit had beneficial results to the preservation and display of older buildings, cathedrals…

Economy and Safety 1/2

Long working hours

Unpleasant working-conditions

Many working-places ignore legal requirements and basic standards for occupational health, safety and welfare

Economy and Safety 2/2: Tragic Disasters 6 March 1987: Ferry Herald of Free Enterprise capsized

193 deaths 18 November 1987: Fire in a section of King’s Cross

Underground station 31 deaths

6 July 1988: Piper Alpha North Sea platform exploded 167 deaths

12 December 1988: Crash with three trains 35 deaths

20 December 1988: Pan-Am jumbo jet blew up and crashed down

8 January 1989: Plane crash 50 deaths

Can you help us? What does the ‘Keynesianism- doctrine’ mean? What are the main economic policies of the Thatcher

Governments? What is the philosophy of `monetarism`? Explain “poll tax”. What are the consequences if making profit is regarded as

more important than safety? What are the reasons for and the consequences of commercial

sponsorship? Which circumstances made the small business grow? In how far was the new style of industrial relations, established

by overseas companies., ambivalent for the employees? What was the impact of multi- nationals? What was the main factor that made the percentage of share

holders in Britain rise from 7% to 19% in the late 80’s?