Kirkland the political economy of britain in crisis; trade unions and the banking sector (2017)

BUILDING A SUSTAINABLE POLITICAL
ECONOMY: SPERI RESEARCH & POLICY
Series Editors: Colin Hay and Anthony Payne

THE POLITICAL
ECONOMY OF
BRITAIN IN CRISIS
Trade Unions and
the Banking Sector

Christopher
Kirkland


Building a Sustainable Political Economy:
SPERI Research & Policy
Series editors
Colin Hay
SPERI
University of Sheffield
Sheffield, UK
Anthony Payne
SPERI
University of Sheffield
Sheffield, UK


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Christopher Kirkland

The Political Economy
of Britain in Crisis
Trade Unions and the Banking Sector


Christopher Kirkland
Department of Politics
University of Liverpool
Liverpool, MSY
UK

Building a Sustainable Political Economy: SPERI Research & Policy
ISBN 978-3-319-59237-4
ISBN 978-3-319-59238-1  (eBook)

DOI 10.1007/978-3-319-59238-1
Library of Congress Control Number: 2017943636
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Contents

1Introduction 1
2 The Trade Union Crisis of 1976–1979  53
3 Placing the Thatcher Reforms in the Context
of the Capital/Labour Relationship  105

4 The Financial Crisis of 2007  129
5Conclusions 185

Bibliography 
203

Index 
205

v


List of Figures

Fig. 2.1
Fig. 2.2
Fig. 2.3
Fig. 2.4
Fig. 3.1
Fig. 3.2
Fig. 3.3
Fig. 4.1
Fig. 4.2

Table of selected trade union data 1950–1980
61
Public perceptions of trade unions 1963–1989  79
Public perceptions of trade unions power, 1972–1988  82
Respondents (%) to the Gallup question: “What would
you say is the most important problem facing the

country at the present time?”  85
House prices 1975–1995  110
Household debt as a proportion of household income.
Chained volume measure  113
Percentage of people living below 60% of median
incomes before housing costs 1977–2010  113
GDP adjusted for inflation 2004–2013  168
UK unemployment rate Q1 2005–Q3 2016  169

vii


CHAPTER 1

Introduction

Abstract  This chapter introduces notions of crises. It highlights how
crises are perceived as holding both constructivist and materialist elements. It argues that accepted narratives of events combine to constitute/construct a crisis, before exploring how crises are related to
concepts such as blame, framing and agenda setting. Furthermore, crises are not necessarily viewed as negative events, but can be utilised by
certain actors to promote certain agendas. Hence, it may be beneficial
for some actors to highlight/generate notions of crises. This chapter
establishes the research questions and hypothesis for the remainder of
the study, in particular it hypothesises that the trade unions will be over
blamed for the crisis of 1976–1979 and the banking sector will be under
blamed for the crisis of 2007.
Keywords  Blame · Banking · Crisis · Trade unions
The fluid nature of British political economy has historically been
observed in many contexts. Political researchers, among others, have
placed increasing importance on such developments through exploring the relationships that exist between what had previously been
viewed in separate “political” and “economic” spheres (Habermas 1979;

Kindleberger and Aliber 2005). This book, through exploring two
recent economic crises, explores and expands existing debates around the
© The Author(s) 2017
C. Kirkland, The Political Economy of Britain in Crisis, Building
a Sustainable Political Economy: SPERI Research & Policy,
DOI 10.1007/978-3-319-59238-1_1

1


2  C. KIRKLAND

relationship between crises and policy formation. Crises are by no means
the product of a single realm, but are frequently described and explored
by academics and other from within a variety of disciplines. Crises are
often assumed to treat all those unfortunate enough to be caught up in
them equally. Such an assumption, however, is questionable and can be
challenged through comparing the crises of 1976–1979 and the financial
crisis of 2007. These crises, and the responses of the media and politicians
to these crises, demonstrate that crises can impact unequally upon those
blamed for the onset of the crisis. I further wish to explore how such
inequalities can manifest themselves within crises. In particular, here I
wish to explore how notions of blame can lead to inequalities. This study
explores the relationships that occur within times of crises (particularly
between those who are blamed and those who are charged with finding a
resolution to the crisis) and ask how useful the existing literature of crises
and crisis resolution is, if current understandings are sufficiently adequate
to explain how crises occur, how the effects of crises bear out upon various agents, groups of agents and institutions and finally how crises can be
resolved or overcome (if they can indeed be resolved or overcome at all).
In exploring the nature and resolutions of crises and notions of

blame this book explores two comparable cases studies; the case of
the trade union movement in the late 1970s and the banking sector post 2007. Both cases have commanded large works of literature
in their own right (see, e.g. Taylor 1991; Gamble 2009; Hay 2011).
Each body of literature has explored, though with little consensus, the
importance of these events in their contemporary settings. Studies of
the trade union movement and its history remain as important in shaping the relations today as they were in the 1970s and 1980s (Nuttall
et al. 2011; Quinn 2010). Equally, the financial problems that emerged
in 2007 have had wide-ranging effects upon populations, and looks
set to shape the political and economic settlements for the foreseeable
future.
These two crises are linked through the policy responses or crisis
resolution of the 1976–1979 crisis. The 2007 crisis—did not emerge
from the blue but came about as a result of the crisis resolution to the
crisis of the 1970s (see Chap. 4). Such links strengthen the case for
compare the 1976–1979 crisis with the financial crisis which started in
2007. I use the experiences of both crises to map out policymakers’
options in times of crisis and argue that the experience of the 1970s
and 1980s demonstrates that current government macroeconomic


1 INTRODUCTION 

3

policy will fail to offer a long-term sustainable recovery to the crisis
which emerged in 2007. Such linkages also enable me to offer a revisionist account of the responses to the crisis of the 1970s and the crisis resolution in the 1980s, questioning that the sustainability of the
“resolution”.
These case studies will form the basis for comparison of the questions set out in the first two chapters. The linkages between the two crises mean, I contend, that the latter crisis should not be studied without
first learning or exploring the lessons of the 1976–1979 crisis. Krippner
(2011) has explored such linkages relative to the American crisis. Tracing

the American economy from the 1970s and 1980s into the 2000s, she
argues that the problems of the crisis stemmed from a financialisation of
the economy. Defining the central thesis of her argument she notes:
the turn to finance allowed the state to avoid a series of economic, social
and political dilemmas that confronted policy makers … paradoxically preparing the ground for our own era of financial manias, panics and crashes
some three decades later. (Krippner 2011, 2)

Such links have been largely absent from the existing literature on the
British crisis. Though one exception to this is Gamble (2014, 13) who
moves beyond the initial comparisons made between the crisis and the
1930s to argue that “there is greater similarity with the 1970s … out
of that crisis a new order did ultimately arise, the neo-liberal order”.
Gamble (2014) links the crisis of the 2010s (which he identifies as starting in 2008) to the crisis of both the 1930s and the 1970s. However,
Gamble views the crises as holding an international impact and argues
that the cause of the crisis in the 1970s was the collapse of the Bretton
Woods system in 1971. Whilst I do not seek to question the economics
of such an argument, I contend that such analysis fails to explain Britain
as the “sick man of Europe” or the presentation of some politicians and
journalists of the crisis of the 1970s. Rather than viewing the crisis in
international terms, I wish to emphasise the domestic nature of the crisis, viewing the crisis as having a distinguishably British element to it.
Newspapers and politicians did not in the late 1970s reference the collapse of the Bretton Woods economic system when talking about the
contemporary crisis—as Gamble himself notes this collapse failed to alter
the hegemonic power of the USA or generate a paradigm shift—instead
the increasing number of elites interested in defining a crisis focused


4  C. KIRKLAND

upon the relationship between capital and labour which existed within
the domestic economy. In this narrative, Britain was defined as being

different to other leading economies due to the restrictive nature of the
trade unions and the so defined excessive powers they held.
Offering a revisionist account of the 1970s and 1980s has three basic
strands. The first is a methodological one—crises can, and should, be
viewed as constructed entities. Ideologies are advanced through narratives that seek to use or instigate crises to advocate changes to policy (see
the definitions below). Viewing crises as constructed is important as it
poses questions over the framing, and powers within such crises. The
ability to define and generate dominant discourses around a crisis can be
a powerful political tool. Such a position is admittedly not novel, and
many authors have spilled much ink arguing over the nature of crises (for
a discussion of this debate see below). The other two contributions of
this stem from the empirical research. As the case studies demonstrate
agents have unequal power in times of crisis, this is born out through the
responses of policymakers, the media and blamed parties during times of
crisis and crisis resolution. The final contribution is to argue that the two
crises—the crisis of 1976–1990s and the crisis of 2007 are linked to the
policy responses to the former. In particular, I trace the foundations for
the crisis of 2007 to the shift in labour–capital relations in the 1980s. In
doing so, I suggest a longer-term appreciation of British macroeconomic
policy is required to trace the origins of the 2007 crisis. Linked to this is
an understanding and recasting each period as a British crisis. Here the
policy responses of the 1980s in particular helped to create a distinctive
economic path for Britain, one which emphasised the City of London as
a financial centre. Such policies therefore following their acceptance and
continuation in the 1990s and early 2000s led to a British, rather than a
global, crisis.
Important here, and before defining the concepts which I am going
to use, it is worth outlining the limitations to this study, and principally
what this study is not setting out to achieve. I am concerned with only
what happened following a state of crisis being declared and accepted.

My focus when exploring these crises is twofold, first, I wish to explore
how inequalities in crises emerge—principally, this involves inequalities
relating to the crisis formation and those relating to the crisis resolution.
Equally I cannot, and do not seek to, speak definitively about inequalities which exist outside times of crisis. Finally, the crises I explore here
both relate to Britain. This point is especially noteworthy in relation to


1 INTRODUCTION 

5

the crisis of 2007. Here I reject the notion of a global crisis—due to the
peculiarities of Britain’s experiences and the unique position of Britain in
2007 (not least due to the crisis resolution which was undertaken in the
1980s and consolidated between 1990 and 2007—see Chaps. 3 and 4).

Definitions
Crises can generate effects upon a variety of levels and are not isolated
entities within political study. Before moving to a discussion of whether
certain events entail being labelled as crises, it is important to understand
how crises occur and exist within a political framework. To speak of a
crisis employs, either implicitly or explicitly, a range of related concepts;
blame, framing, and agenda setting. In this first chapter, I seek to explore
such relationships and ask how concepts such as blame, framing and
agenda setting are related to notions of crises.
Notions of crises and blame are often seen as being related. Crises,
defined broadly as suboptimal events, lead to questions such as “Why did
this scenario arise?” and “Who or what caused this scenario to arise?”
Asked another way, “Who or what is responsible, or to blame, for this
scenario occurring? As I will set out in this chapter, these are not the

only concepts linked to this relationship. In the remainder of this chapter, I will seek to define crisis, and within a political context ask: how are
such “crises” created? What characteristics are required for a “crisis” to
be declared? And how do notions of crises and the relationships associated with crises affect government policy? I will also introduce concepts
of blame, agenda setting and framing and demonstrate how these concepts are interrelated. The relationship between the notions of crisis and
blame also poses questions: who gets blamed? Why do they get blamed?
Who do they get blamed by (i.e. who is able to frame the debate and
set the agenda)? And whose narratives of the debate/events matters?
And, how does any political fallout affect such blamed parties (i.e. how
does blame, and framing, affect agenda setting)? Over the course of this
book, I will relate these questions and definitions to the two periods
with which this study is concerned and in doing so generate subsidiary,
focused, questions which will be returned to throughout the study.
Here I establish and define the core concepts used in this study: crisis,
blame, agenda setting and framing. By showing how such concepts are
interrelated, I argue that all four are required to establish and understand
how and why differences in crises and crises management occur. Such


6  C. KIRKLAND

differences are important in looking at the relationships governments
and government policy held with the trade unions in the 1970s and the
banking sector in the 2000s. When undertaking and examining my cases
studies, it will be important to ask questions such as how crises occur,
evolve and shape the political agenda? How the political agenda is framed
and constructed? Where power rests in the construction of policy? And,
how agents are (un)able to shape policy and responses to crises? Such
questions will be further explored and answered relative to the trade
unions in the late 1970s and the banking sector post-2007 in Chaps. 2, 3
and 4, before some conclusions can be drawn out in Chap. 5.

Crisis
The term crisis has been used by various philosophers and politicians in
manners so vast that the concept has become “one of the most allusive,
imprecise and generally unspecified concepts within the theoreticians’
armoury” (Hay 1999, 317–318). Gamble (2010a, 6) speaking about the
recent “financial crisis” further notes “when events as large and complex
as this occur it is not easy to establish their causes or to assess their significance, in part because that is determined over time by the political
responses to them”.
Scholars in other fields too have varying methods and means of analysing crises (Dutton 1986; Kindleberger and Aliber 2005, 24). With
such importance placed upon notions of crisis, and in particular policy
responses to crises, they are portrayed as being in some regards exceptional events and therefore often synonymous with immediate action.
Crises can therefore be viewed as turning points (Gamble 2009, 38–39).
Gamble drawing upon the medical definition of crisis, distinguishes
between the crisis and the cause of the crisis, noting that the “crisis is the
turning point in that disease, the moment in which the body either starts
to shake off the disease or succumbs to it”. The separation of the crisis
(as an entity) and the causes of said crises are key here. The response(s)
to, or understandings of, certain events generates a crisis, rather than the
event per se. Similar events may lead to different outcomes of policymakers, for example, one recession may not be the same as another and the
difference in responses or the effectiveness of responses may lead to one
set of events being declared a crisis and the other not. Indeed, Gamble
(2009, 40) later notes that the term crisis can refer to “an impasse, or


1 INTRODUCTION 

7

deadlock, in society or institution, which can persist for a very long time

before it is decisively resolved”.
A shift or acknowledgement of a shift must, by definition, be a
response to or recognition of an event. Irrespective of whether it is
events or narratives which constitute a crisis (for a discussion see below),
the crisis is a product of something and therefore cannot exist before the
event(s) or narrative that generated it. This is irrespective of what causes
the crisis. For example, the effects of either a natural or structural event
of the framing and organisation or interests to shape or construct a crisis
can only happen after the said actions have occurred. Crises must have
a point of reference. When we talk of a crisis, on an aggregate level, we
speak of an x crisis, for example, a banking crisis or financial crisis. Such
referencing is often implicit rather than explicit, for example, others have
spoken about a financial crisis (Davies 2011), a missile crisis (Allison
1969) or a crisis within a relationship (Minkin 1974, 20). This system
of reference is important to our understanding of the crisis and helps
answer questions such as how the crisis originated, and how the crisis can
be overcome. To say there was a banking crisis, at least initially, requires
an exploration of the banks involved. The importance of such framing
will be outlined below, however, before that can be done we must ask
what constitutes a crisis?
Dutton (1986, 502) differentiates between periods of crisis and of
non-crises noting that in the former “decision makers increase the levels of resources expended on an issue, enhance control over issue resolution and increase the level of issue-related explanation”. Crises, in
other words, generate priorities for policymakers and enable the prioritisation of resources to policies designed and implemented to overcome
the crisis. Crises therefore raise the stakes of the political game; they are
“moments of decisive intervention” (Hay 1996, 254). Crises are not
ordinary times of politics. They require, by definition, a greater amount
of resources and effort to solve the problems they present. They take priority upon the agenda and are built as temporary negative entities, they
encourage quick solutions to return to a somewhat “normal” state of
affairs, often defined as being the state of affairs prior to the crisis (or at
least defined in relation to the pre-crisis situation)—for example, the economic indicators of the recent financial crisis are generated in comparison

to the pre-2007 figures. This is consistent with other financial crises, the
great depression of 1929–1933 was compared to 1929 data, and only
once economic indicators had surpassed their corresponding figure was


8  C. KIRKLAND

the crisis seen as being resolved. The ability to define both crises and the
means by which the crisis may be resolved, or be seen to be resolved are
therefore highly politicised decisions.
The existing literature can be divided into two approaches to crises. The first takes a materialistic approach to crises, whereas the second views crises as constructed entities. Whilst differences clearly exist
between these positions, similarities between the two views should not
be neglected. Whilst both disagree with the manner in which crises
occur, they share common ground in the effects of crises. Both suggest
on some level that crises are retrospective events, they emerge only after
an event or narrative. Crises can be viewed as turning points and as generating paradigm shifts (see below), however, they must exist before such
a shift can occur.
Although two distinct positions emerge, these two positions agree on
some broad themes:
a crisis situation must be perceived by someone or some group to have
reality; (2) its character must be defined before others, particularly those
least directly or not at all affected by it, can be convinced of its existence;
(3) by definition it involves a real or implied threat of a major loss or an
unwanted change that threatens the established order; (4) by definition it
implies the need for a response. (Brass 1986, 246)

Crises cannot be viewed as mere narratives. To say, in the case of the
house located within the path of the tide, “the waters are rising” relies
upon a real event (i.e. changes in the water level) to speak of a crisis relies
upon evidence derived from material(s) or events. These are objective

and independent of the person, though their interpretation obviously
is not. Equally, in the case of financial crisis, it is important to ask how
the crisis should be defined, in monetary terms, or unemployment, etc.
The problem, or crisis, occurs due to accounts of materialism or events.
Money (or what constitutes money, e.g. coins, paper notes, property),
in various forms, is a real entity, though constructed. The crisis therefore that occurs due to a lack of money (as is the case within the recent
financial crisis) again stems from real, observable, events, (e.g. housing
repossession or increasing levels of debt) though the interpretation of
those events (or the effects and therefore their impact upon agents) is
constructed, though the causality can be cyclical rather than linear. In
short, our understanding of narratives must, on some level, relate to an


1 INTRODUCTION 

9

understanding of a materialistic or “real” objective world. To talk about
an event or to generate a narrative of an event, one must provide or
seek to provide evidence of that event (though this is not to say that the
cause and effects of events are perfectly understood). For example, to say
that one’s house has been flooded by the rising tide or destroyed by the
earthquake is to rely upon the evidence either of the tidal pattern and
location of the house or any remains (or indeed lack of) the house fallen
by the earthquake.
To view crises as stemming from effects upon agents is akin to
Habermas’ (1979, 1) definition of the resolution of a crisis as stemming
from, “a liberation of the subject caught up in it”. For Habermas notes
“we cannot speak of a crisis … if it were only a matter of an objective
process …. The crisis cannot be separated from the viewpoint of the one

who is undergoing it”. Later Habermas (1984, 134) notes that “if we
interpret a process as a crisis, we are tacitly giving normative meaning.
When the crisis is resolved, the trapped subject is liberated”. Though it
also important to note that crises are simply the product of an event (or
set of events) upon an agent, for “not all individuals, faced by the same
hazardous events, will be in a state of crisis” (Rapoport 1962, 212).
Here the narrative of the event represents one part of the effect upon
agents, although it is important to note that some events do not attract a
narrative. For example, events that go unnoticed in nature or events that
occur without affecting agents’ en masse often do not command a crisis
narrative within a public sphere. For example, personal crises or localised
crises that do not extend to the entirety of the population often go unreported in the national media. Deaths, for example, rarely attract such
media attention. These are certain crises for the individuals involved. Yet
the majority of the population are unaware of these crises.
Crises are both subjective and constructed by agents especially crises
of an economic and/or political nature. Both systems are constructed
by agents (though they are inevitably shaped by structures outside of
agents’ control). The use of the term “crisis” implies that the observer
believes the events to be generated by agents (as oppose to acts of God),
or at a minimum, agents’ actions could have shaped events differently
(Bovens and Hart 1998, 12). Bovens and Hart make this point relative
to the notions of fiascos, but it also holds true with regards to notions of
crises. Creations such as money are not a natural phenomenon, but constructed (amongst other reasons) to enable an easier system of exchange.
Even with regards natural crises, such as earthquakes, human decisions,


10  C. KIRKLAND

e.g. the building of habitats where an earthquake hits, and the reporting
of the event outside of the immediately affected area, are actions which

facilitate the definition of a crisis being employed. By defining crises in
terms of their effect upon agents, the agents’ decisions have in some
manner led to the crisis occurring (albeit in the case of the earthquake,
these decisions are in the most part unintended and unforeseen—if
knowledge of the earthquake, and its severity, had been available to, and
utilised, by agents the effect upon humans would have been far less, people would have left such residences either on a permanent or temporary
basis).
If crises are products of agency then so too must their responses (for
now the effectiveness of such responses are not important). The subjective nature of crises and crisis management further suggests that they are
not inevitable events. To say that crises are not inevitable is not to suggest that they are unlikely to occur. This is an obvious point in terms
of man-made crises, however, it requires some explanation in terms of
“natural” crises. Above, I contended that crises stem from the effects
upon agents, which enabled a differentiation between two similar events
(i.e. two earthquakes), if the effect upon agents is the defining feature of
a crisis then crises cannot be described as “natural” or inevitable events
(defined as events which occur irrespective of agent’s actions). For example, if an earthquake occurs there is nothing inevitable about its effect on
agents, there is no inevitability that houses or offices would be built upon
any given square mile of land. This is not to say that natural events cannot cause or contribute to crises or that crises do not and cannot occur,
merely that every crisis is, or was at some point, preventable, through
agents’ decisions (or lack of—i.e. deciding not to expand settlements).
If it is accepted that crises are constructed, on some level, then a
resulting question naturally asks “who constructs such crises?” And, if
they are seen as negative entities, “why would anyone or any group wish
to construct crises?” For example, the effects of unemployment on an
individual may be seen as a crisis at an individual or family level, depending upon the importance of the person’s previous income, however, by
describing, or promoting, it as a crisis little change if any will result.
However, politicians may be able to aggregate several cases of individual
crises stemming from the same factor (i.e. unemployment) to promote
the idea of a regional, national or even international unemployment crisis
and thus suggest policies at the appropriate level aimed at overcoming or

responding to such a crisis.


1 INTRODUCTION 

11

Answers to the two questions above relate to concepts such as agenda
setting. By instigating a crisis an agent (or group of agents) is able to
focus, or frame, a particular debate around a given topic. This naturally
leads to greater resources being allocated to the debate, either arguing in
favour of a crisis or against. If then the debate concludes, or at least those
within positions of power conclude the debate, in favour of a crisis being
declared then extra resources can be omitted to the liberation of the subjects caught up in the crisis (i.e. in the example above the unemployed).
Such policies are legitimised as crises are intrinsically viewed as negative
events and therefore must be prevented, stopped and/or reversed. Actions
taken are likely to follow the proponents/instigators of crises own political agenda (e.g. reform to a sector or group or a shift in governmental
policy), and as crises are viewed as negative entities, the removal of the crisis will attract resources, the policy area may otherwise not have received.
Crises, due to their subjective nature, are immensely political. The
subjectivity of a crisis is demonstrated through its definition, and in particular of whom the crisis affects (or excludes). Crises can be defined in
terms of individuals, groups, nations or on a global scale. “Whether a
situation be considered a crisis for society as a whole—with attendant
ethical or policy imperatives—depends on the argument that is explicitly or implicitly presented when a ‘crisis’ is identified” (Burkhardt 1988,
124). During times of crises, the “drama of accountability and blaming begins”. The aftermath of a crisis is highly politicised with competing notions of who is to blame and who is accountable. Blame must be
attributed “for causing the crisis, failing to prevent it, or inadequately
responding to it” (Boin et al. 2010, 706). Such constructions of blame
and accountability lead to, and (de)legitimise, a divergence of policy
options and responses to crises. Crises involve “an element of suspense.
In a crisis, people are waiting to see what will happen … the dramatic
meanings of crisis imply that crises are contingent, that their outcome is

not fore-orientated, and that there is more than one way in which they
might be resolved” (Gamble 2009, 39).
Individuals or groups may therefore wish to “create” crises to achieve
political goals, e.g. through the imposition of martial law to ensure
political survival (Fairman 1942; Gross and Aolain 2006, 27). Equally,
they may wish to redefine policy areas/targets to avoid crises and suit
their wider agendas. For example, in the 1980s emphasis was switched
away from economic measures such as unemployment to inflation by the
Thatcher government’s monetary policy. The redefining of economic


12  C. KIRKLAND

problems (and thus what constituted a crisis) then becomes an important
barometer, enabling in this case the government, to define the success
and failure of their own policies (Moon 1995, 6). One reason for suggesting a crisis therefore may be to shape governmental policy (equally,
the need to prevent a reshaping of governmental policy may lead others into the argument to deny that a crisis is occurring). Either way, the
framing of the debate is inevitably linked to notions of blame and crisis
and affects agenda setting. Each of these will be defined below, though
as in the case of crises, the effects of particular agents are not homogeneous, but differ depending upon agents and the manner of the crisis,
perceived or otherwise.
The risks associated with crises, however, are not solely political.
Damage can take a variety of forms, from life and limb, to individual
financial losses or be on a broad societal scale resulting in loss of confidence (either economic or political), collective harm or environmental
problems. Identifying damage requires a “great deal of subjective interpretation” (Bovens and Hart 1998, 11). This is especially true if risk
constitutes more than one element, for example, a financial but also
human cost—there must be made on some level a, political/subjective,
decision as to what an acceptable trade-off between the two is.
Not all crises, however, are equal in their effects or the responses
the command. Dunleavy and O’Leary (1987, 59) distinguish between

three forms of political crises “state collapse—terminal crisis—chronic
political difficulties and sub-optimal performance—endurable crisis -,
and short-run political problems which can be resolved—curable crisis”. The classification of a crisis is important in understanding policy
responses, though this not to say that crises are instantly definable (policymakers may over or underestimate the scale of the crisis or their own
capacity to respond to the crisis) or that the approaches of policymakers remain static during times of crises. Policymakers and agenda setters
have different mechanisms for resolving short-run political crises than
they do terminal crises (to which they may not be able to influence or
prevent the state from collapse as identified by Dunleavy and O’Leary).
Equally, the extent of the crisis and its impact upon agents can shape
the responses, for example, an earthquake which hit populous regions
may attract more resources than one that hits less populated areas.
Individual crises may also attract differing resources, depending upon
individual characteristics, age, income, wealth, social class, etc. of the
agents involved.


1 INTRODUCTION 

13

The notion of crises as set out here is important to the remainder
of this study. However, viewing crises as (rather than related to) failure
(O’Connor 1987) raises some questions, especially in relation to the
two time periods this study contends with. The immediate question surrounding this is “what failed?”, “and in what regards did it fail?” Both
the trade union movement and the banking sector are still prevalent
within society today. the power of the trade unions declined in the 1980s
through legislation of the Thatcher governments, changes in the British
economy and industry (and in particular the decline manufacturing) and
through declining membership (Towers 1989; Disney et al. 1994) and
notably sections of the movement lost highlighted strikes, e.g. the steel

strike of 1980 (Upham 1990, 89) and the miners’ strike 1984–1985, but
in what regards did they fail?, or indeed did they fail at all? The case of
the banking sector is more acute; the last Labour government pumped
millions of pounds into the economy in the form of bailouts, using the
guise that the banks were “too big to fail” (Jenkins 2009; McFall 2010).
Kling (2010) emphasises two accounts of failure within the financial crisis: moral crises and a cognitive failure. If it is taken that crises
are defined in terms of failure, is it possible to speak even of a banking crisis, on a pluralistic or aggregated level, or even a financial crisis
on a sector level? Individual banks, such as the Lehman Brothers and,
closer to home, Bradford and Bingley did collapse, the former in a media
frenzy that would not have been out of place in 1980s industrial relations, yet the sector as a whole largely remains. The same arguments
could be made with regards finance, in what way did it fail? Finance is
still important in underpinning the global economy. The aggregation
of the crises makes it one of national—if not global—importance and
therefore requires greater degree of resources in overcoming than if it
was to be deemed as a private matter for the individual banks concerned.
Therefore, the framing of the debate is especially important (and a point
I will return to later). The questions here raise large degrees of subjectivity which will be returned to later, as will a study of the disparities
between rhetoric and policy.
Crises therefore are viewed as negative entities and are a deviation away from norms. They require special treatment in the political realm as extra resources are deployed to overcome such problems.
Crises involve a mix of structure and agency and are inevitably linked
to concepts of blame, agenda setting and framing. The two cases I am
concerned with here have been introduced in terms of crises, and later


14  C. KIRKLAND

chapters will analyse each of these in depth. Each case study will view
the extent to which both the trade unions and the banking sector could
be defined as being responsible for generating crises, and how such perceptions affected government discourse and policy. Before this, however,
I wish to establish how the notions of blame, framing and agenda setting are important to understanding how crises affect both discourse

and policy.

Blame
If crises can legitimise policy actions or decisions, then they must also
be able to generate means of differentiating (and deciding) that which
worked (particular policy, agents etc.) and that which didn’t (or failed).
Those that have failed, be they policies, institutions, agents, etc. are then
blamed for the perceived failures. Here crises are viewed or constructed
as temporary positions, whereby the resolution of crises centres upon the
notion of blame, or more importantly responses to the question(s) “who
(or what) is blamed?” The idea of crises as negative entities and distracting from the true (or best) path for society implies that once the causes
of the crisis (or those blamed for the crisis) are overcome or significantly
altered (e.g. through the employment of extra resources), society can
resume on the “correct” track. Such theories are often associated with
early analysis of the “business model” in economics which viewed crises
as transitional periods, which once negotiated, enable the “economy to
return to a natural state of health” (Wiener 1973, 590). In other words,
once blame is assigned, it is important to remove that which has been
blamed to both alleviate society/individuals from the crisis, but also in
order to prevent a similar crisis in the future. This can be done through
legislation, whether in a positive (e.g. generating something new to take
over the responsibility of regulation) or negative (e.g. restricting the
means by which agent(s) or indeed structures can operate) manner.
Blame links the concept of crisis to conditions or events and notions
of legitimate policy. If crises are viewed as undesirable, the solution or
crisis management must surround policies of rectification—i.e. putting
right what’s gone wrong—and future prevention—to ensure that similar events will not or cannot occur again. Such policies are comprised
through blame attribution. The question asked once it has been accepted
that something has gone wrong is “why did something go wrong?”
(MacLachlan 2006, xiii). The answers to such questions lead to blame.

1 INTRODUCTION 

15

If the answer to this particular question is “because x did y”, then one
can infer that so long as y (or the effects of y) is reversed the crisis will
cease. Also, if x can in the future be prevented from doing y, then such
a crisis will not occur again, i.e. x is blamed and therefore policies aimed
at preventing x’s power (to do y) are introduced, what Benoit (1997,
181) labels as “corrective action”. The blaming of x therefore has policy
implications. Further to this by blaming x policymakers may be able to
remove, or marginalise, blamed agent(s) from the policymaking process,
as such actors would lack the credibility to amend or draft legislation.
For example, the trade unions who were blamed for the economic problems in the 1970s were legislated against in the 1980s. In government
circles, it was determined that the unions had generated economic problems within Britain and therefore policies needed to be introduced or
amended. Such policy discussions excluded the unions as, it was claimed,
their influence and power had become too great and to do so would only
exasperate the situation. The unions had “lost the argument” and therefore the legitimacy they previous held (see Chap. 3 “crisis resolution”).
Blame can be attributed to agents or structures and relates to notions
of responsibility. Here two important but distinctive processes emerge:
“discovering the truth about what happened is [only] one dimension
of such proceedings. Allocating responsibility—in terms of moral, legal,
political and possibly financial accountability—is another” (Brandstrom
and Kuipers 2003, 279). Allocating responsibility further adds a constructed dimension to the relationship between blame and crisis, as such
allocation and retributive action(s) are undertaken by individuals.
One arising question is, why do we blame? Blame can be a powerful
weapon in a politician’s or journalist’s toolkit to advocate legitimacy for policies or even to discard alternative policy responses to particular problems.
Here it is important to ask what we mean when we say we have blamed a

group, individual or structure for a certain outcome. To generate blame is
to acknowledge that something has gone wrong (or it has not gone as well
as it may otherwise have done). Furthermore it suggests that the reason(s)
for this suboptimal outcome is the actions of the blamed individual(s) or
the structures which led to/enabled such actions. This assumes some
understanding of the processes instigated in order to generate the situation for which blame is levelled. Blame can therefore be attracted to the
actions (or lack of) of certain agents. Through instigating such blame, it
is suggested such agents may have acted differently, and if they had done
so different (and more favourable) results would have emerged. Blame can


16  C. KIRKLAND

be levelled upon individuals through the perceptions of others, though the
extent to which such blame is appropriate can be questioned.
Blame, along with this definition, further emphases the view that crises are constructed. Through blaming one or more agents suggest (an)
other agent(s) actions generated the crisis. Blame can only be attributed
providing an agent or set of agents could have acted differently, to prevent such a scenario occurring. To put it another way, the actions that
they undertook were not inevitable.
Blame may be presented through a variety of mechanisms and means.
The media, public and politicians can all attribute blame on a variety of
levels; the public can remove representatives should they believe they
are to blame for a crisis; the media can help frame debates and set the
agenda through campaigns and distributing (sometimes selective) information; and politicians can legislate against individuals or groups who
they believe to be at fault. Each set of actions can have varying results.
This book seeks to demonstrate and explore the reasons why such inequalities exist. Through deconstructing crises and exploring factors such
as blame, agenda setting and framing of debates, it will use two comparable case studies from modern British political economy to demonstrate
how blame and crisis resolution can be seen as inherently unequal.
Actors, however, possess the imperfect knowledge, as Giddens (2004,
282) states “the knowledgeability of human actors is always bound on

the one hand by the unconscious and on the other by unacknowledged
conditions/unintended consequences of action”. However, this does
not render such studies meaningless, as Giddens continues “Some of the
most important tasks in social science are to be found in the investigation
of these boundaries”. The concept of imperfect knowledge is important
in understanding policy responses and their subjectivity. Different levels
of knowledge and priorities led people to promote different (sometimes
contradictory) policies. There is no single “best” policy, which all of society consensually agrees to. The publication, or witholding, of knowledge
can be used to promote political agendas and is particularly important
when analysing media responses and how information is presented (for
a discussion see “agenda setting” along with the two case studies presented below).
When exploring blame, imperfect knowledge is important in two different regards. Voters may “fail to link policymakers to choices they have
in fact made or outcomes to which they have contributed. On the other
hand, they may attribute a linkage where the policymaker’s influence was


1 INTRODUCTION 

17

really weak or non-existent” (Weaver 1986, 381). Here the effects of a
crisis may not be fully manifested, or the manifestation of a crisis may be
limited due to the existence of imperfect information.
Despite this imperfect knowledge notions of crises and blame are
often used simultaneously and are linked. Blame further presents another
dilemma for those wishing to contribute towards the resolution of the
crisis. Blame as a concept is not one dimensional; to assign blame is
only one part of the blame game. Blame that is levied at individuals/
structures must also be accepted either by those it is levelled at or by
a wider audience. The results of blaming therefore largely depend upon

the framing of the debate and agents ability to influence the agenda
setting process. If blamed, actors can lack legitimacy in suggesting, or
helping to instigate policies, aimed at resolving the crisis. If, however
actors can deflect such blame then they may find themselves in a position to instigate or suggest policies (as their perceived legitimacy to
do so is unaffected) Actors wishing to set the agenda (or at least influence the manner in which the agenda is set) therefore have incentives
to avoid blame. For example politicians who seek continued legitimacy
(most notably through winning elections) have greater vested interests in
acquitting themselves of blame. As Mcgraw (1990, 119) notes, “politicians are particularly adept at extricating themselves, with a wide range
of explanations at their disposal to avoid blame for unpopular actions and
decisions”
Weaver (1986, 372–374) takes as his starting point that politicians are
vote maximisers and that people who have suffered a loss are more likely
than those who have gained a corresponding amount to notice it (and
therefore losses as opposed to gains are more likely to have a political
effect). This encourages politicians to be “at least as interested in avoiding blame for—perceived or real—losses … as they are for ‘claiming
credit’ for benefits they have granted”. In the cases explored here, arguments can be made for governments blaming both the trade unions and
the banking sector to maintain their own credibility on economic matters and maximise their chances of re-election (Taylor 1991; Froud et al.
2010, 31). Blame avoidance is not the monopoly of politicians in elected
systems, interest groups can use blame or perceptions of blame in running their campaigns. Just as the politicians who must become re-elected
to enact their full political manifestos, interest groups (along with other
political actors) must also avoid being blamed in order to effectively pursue, and claim legitimacy for, their policies.


18  C. KIRKLAND

Notions of blame can generate a power struggle, between those
who are blamed and those who are blaming them (Malhotra and Kuo
2008). Those who are being blamed seek to defend themselves and
their interests against those who seek retribution and changes to the
means through which they can operate, with the aim of preventing

another similar crisis from occurring (Stern et al. 2002, 531; Sinclair
2010, 99). Blame is further linked to crisis resolutions. By assigning
blame to agents or groups of agents, they can be (depending upon
the success of those instigating blame) excluded from the policy solutions, and possibly from policies post-crisis, this can create the space
for a particular agenda to be pursued. This occurred with respect to
the trade union movement after 1979, whereby the trade unions were
increasingly marginalised and excluded from policymaking (Longstreth
1988). Alternatively, those held responsible may be encouraged to
demonstrate how such failures occurred and use specialist skills to
help find solutions to the crisis. This has been used to combat the crises engulfing the Eurozone in the wake of the recent financial crises
as technocrats have been invited to form and shape policy measures.
For example, governments in Italy and Greece have been established
led by technocrats to aid (or stimulate) recovery of financial problems
(Hooper 2011).
Crises are not homogeneous or deterministic events; crises impact
different actors (both political and non-political) and structures in a
variety of ways. For example, the effects of the trade union crisis were
perceived very different by a working-class manual labourer in the 1970s
and 1980s than the politicians that presided over the period. The recent
banking crisis has also affected individuals discriminately depending
upon income or property ownership. For example, those who have seen
home repossessed or become unemployed as a result of the crisis have
been arguably hardest hit by crisis, especially compared to those who
have maintained their houses or jobs or indeed those who are able to
benefit from low interest rate levels, and even within such groups, there
may be differences in the effects/severity of the crisis. For example,
the level of savings an individual has when (or if) they are made redundant or unemployed, or other employment within their household, are
likely to affect their perceptions of the crisis. Though this debate is not
clear cut and depends largely upon the scale used to identify effects,
should any losses be calculated in absolute or relative gains? Is losing a

£ 100,000 home only half as bad as losing a £ 200,000 home, or indeed