Back to the Past

Zack Breslin
13 min readSep 6, 2022
Photo by Dawid Małecki on Unsplash

Liz Truss is Britain’s new Prime Minister and while there is an air of unpredictability about how she intends to govern, it appears probable that her government could very well be facing increased industrial conflict and perhaps even the outbreak of social unrest. Truss has signaled her intention to tear up a range of workers protections and has consistently voiced her opposition to the very reasonable demands made by Britain’s organised workers. Meanwhile, a newly emboldened trade union movement has already shown an appetite and aptitude for resistance. With Truss unlikely to easily prevail over the trade unions as they intensify their campaigns, a new Winter of Discontent beckons.

When we add in other factors at play — the massive spike in the price of energy caused by the outbreak of war; levels of inflation not seen for a generation; a looming economic downturn that could yet prove to be the severest for decades — the 2020s are looking more and more like the tumultuous years between the mid-1970s and the mid-1980s; a period when western capitalism transitioned away from the mixed economy model of the post-war decades and towards the much more rapacious neoliberal era.

The 1970s was the decade when the once successful post-war economic model finally ran out of steam. Then, as now, the central issue of political economy was that of inflation. And just like today, the initial cause of inflation was not to be found in the economic realm, arising instead from the geopolitics of the time. The first geopolitical event that contributed to inflation was America’s war in Vietnam, which by 1965 the government was funding by running a deficit. In an economy nearing full employment this resulted in a higher rate of inflation. With prices rising, trade unions in the US demanded wage rises and they largely got them, further contributing to inflation. At the time, this was not necessarily seen as a problem. After all, previous decades had seen incomes steadily rise right across the western world and this was in fact a key contributor to the economic dynamism of the time.

However, problems arose with another geopolitical shock. In response to western support for Israel in the 1973 Arab-Israeli war, oil producing nations in the Middle East slapped an oil embargo on the US, sending oil prices skyrocketing. Oil, just like today, was crucial for western…