Lessons From the U.K.’s Winter of Discontent
If you thought it was getting expensive to buy beef or fill up your gas tank, wait until you see your heating bill this winter. The U.S. government said last week that it expects heating bills to increase by up to 54 percent compared to last year (depending on which heating fuel is used). So far, the administration has taken few actions to mitigate this, appearing to prefer a wait-and-see approach. It may want to think twice about this, as America could very well be approaching its very own “Winter of Discontent.” The administration would be wise to take lessons from what happened in the U.K. in 1978-79. While it wasn’t an energy crisis, the failed attempt to deal with inflation caused supply chain disruptions that left citizens without fuel and energy—and feeling angry.
What was the Winter of Discontent?
In 1978, the United Kingdom was governed by Prime Minister James Callaghan and his Labour Party. Callaghan would arguably be the last left-wing prime minister of the U.K, and the Winter of Discontent was why. Since then, the only Labour candidate to actually win an election was Tony Blair, the ultimate centrist third-way politics poster boy. (Gordon Brown took over as prime minister after Blair resigned in 2007.)
The 1970s were characterized by runaway inflation. Callaghan’s government made several attempts to cool things down, but knew that success would come only if it could slow down wage growth. In August 1978, the government set a 5 percent limit on all wage increases and promised to sanction any public or private government contractor that violated this policy—a legally questionable move as no legislation to that effect was ever passed; the limit could perhaps most accurately be described as a U.K. equivalent of an executive order. The government had for a long time slowed down wage growth in the heavily unionized public sector, hoping that the private sector would “follow by example,” though this rarely happened. The idea was that the policy would crush inflation since neither public nor private sector workers would be able to get a raise of more than 5 percent.
Again, that was the idea. Reality, however, did not turn out that way.
It took less than two months for the situation to begin to unravel. On September 22, 1978, more than 15,000 Ford employees began a strike in protest against the low-ball offer they had received from Ford. Ford had no say in the matter, and initially, the strike was an unauthorized action not sanctioned by the union. Soon, however, the union would bow to the pressure, and the strike became an official strike with the number of strikers growing to 57,000. Ford’s entire business ground to a halt, and the government offered little in the way of useful advice. Ford refused to play along, and more or less dared the government to sanction the company by offering its employees a 17 percent salary hike. The union accepted the offer, and the strike was over. The government’s problems, however, multiplied. The credibility of its anti-inflation policy program was in tatters. Initially, the government stuck to its guns and promised to sanction Ford for these illegal wage hikes, but within weeks a majority in Parliament, made up of an uneasy coalition of pro-business Tories and hard-left union sympathizers, passed legislation that prohibited the government from sanctioning private businesses. Within weeks, other strikes followed.
Truck drivers, whose strike has become a symbol of both the winter, and of union overreach and hubris, staged the most significant strike. With no trucks delivering gas, gas stations across the country shut down. Supply lines were disrupted, with shortages across several sectors. Picket lines organized by the unions prevented deliveries even by those drivers who were willing to work.
Once it became clear that the private sector would not obey the 5 percent limit, public sector unions, which had previously been content with raises within the limit, began to follow with their own demands. Soon, garbage men were striking. They were joined by nurses, ambulance drivers, and grave diggers, among others.
In November 1978, Labour had led the polls by around 5 percent. In February 1979, the Conservatives, led by Margaret Thatcher, were instead up by 20 percent.
The present-day United States has some striking similarities to the 1970s U.K.: At the time, two decades of foreign policy failures had caused the U.K’s global influence to decline dramatically. In retrospect, what happened in the U.K. was a crisis of national identity. What even was Britain anymore, once it no longer ruled the waves? The country’s spirit was truly and thoroughly broken.
Those who fail to understand this, who see the 1970s purely through the lens of economics, also fail to understand the true greatness of Margaret Thatcher: Her most important achievement was not closing the mines, crushing the unions or ending inflation. Her greatest victory was that she managed to make the United Kingdom believe in itself again, and believe that it still had a vital role to play even in a world in which its colonies were gone. With its self-esteem on the rise, Britain bounced back and began to outperform continental Europe. And it all began with one cold, miserable winter.
One may think that, while there are admittedly some eerie similarities like supply chain shocks and expensive gas, electricity, and heating, that this cannot play out in America. And it’s true that most unions in the U.S. are really not that powerful, and none are capable of shutting down the economy the way their British counterparts did. While that may seem comforting, it is missing the bigger picture: The Labour Party ignored the plight of the average Brits in order not to have to confront a powerful special interest within its party. Its blind belief in the greatness of labor unionism made the party unable to act pragmatically when reality failed to conform to its ideological road map, and the unions, rather than being the ones fighting for the little guy, became the very reason why the little guy was freezing, unable to fuel his car, and even unable to bury his dead at the same time that his home was getting buried in trash.
The environmental movement is to the Biden administration what the labor movement was to the Callaghan administration. Like the labor movement in the 1970s, the green movement is prone to elitism and to being out of touch with the struggles of normal people. And most of all, it is impatient. Had the labor unions acted pragmatically during the Winter of Discontent, it is quite possible that Margaret Thatcher might never have become prime minister and the unions would have been able to retain at least most of their significant political influence. Instead, they got greedy, focused on delivering short-term wins for their members (beginning with the Ford employees who insisted on a rule-breaking wage hike). As a result, the public suffered, and the public went on to punish them with a permanent political exile.
Many policies that progressives and environmentalists want the Biden administration to implement—including taxing carbon emissions and making energy production 100 percent renewable as proposed in the Green New Deal—would serve only to increase energy prices further, the latter by up to 286 percent. Whatever damage the climate might suffer from a three- to six-month delay of the administration’s green agenda pales to the harm that Americans are on course to suffer from unaffordable heating. In fact, I would go one step further and actively investigate ways to immediately lower the cost of heating—be it through deregulation, targeted tax breaks, or perhaps even subsidies. Yes, this would definitely increase America’s carbon footprint over the next few months. But, it would be worth it.
What the Labour Party had to learn the hard way was that no one cares about ideology if basic needs are not satisfied. Whatever great ideals the party and its associated union movement may have had that a majority might have agreed with on paper, it simply did not matter once people were left to freeze in their homes. Progressives may argue that a majority of Americans support measures to combat climate change, but once again, it will not matter once people are freezing. If you want people to listen to your visions for the future, you must first ensure that they have satisfied at least the first level of Maslow’s hierarchy of needs.
While environmental activists and pundits may think that “pausing” would be a betrayal of the greater goal, they are merely repeating the mistake of the British labor unions. And they risk dragging both their movement and their party into political oblivion, as happened in the U.K. While the Labour Party was leading in the polls before the Winter of Discontent, Biden’s numbers are already looking dicey, and few if any Democrats are looking forward to the midterms next year. An American Winter of Discontent would do to the Biden administration what Hurricane Katrina did to George W Bush’s.
Quite simply, progressives are facing a dilemma similar to the famous marshmallow test, which measured how well children could delay gratification: Democrats may be able to stand firm and pass one or two items from their green agenda now. Come next year, they will lose the midterms in a landslide, and Biden will then be reduced to a lame duck for the rest of his term. With Biden having accomplished almost nothing in his first term, and quite literally nothing during the final two years of it, he will have virtually no achievements on which to run in 2024. The result is predictable, and this is why progressives ought to be patient and delay the gratification of environmental policy wins now.
Environmentalists may protest that the rising cost of heating is not due to green policies, so why would they suffer politically for it? While there is certainly a kernel of truth to that, it is equally true that the labor unions were not the only reason why inflation ran so high in the U.K. Thousands of left-wing academics and political writers have spent the last four decades trying to explain how the Winter of Discontent really wasn’t that bad, and besides it really wasn’t their fault anyway and the Conservatives would definitely have performed even worse if they had been in power. It does not matter. People saw how the union strikes made their lives miserable, and now they are seeing green policies make their gas and utilities unaffordable. Whatever additional underlying components may be contributing is absolutely irrelevant.
Biden actually has an opportunity here if he can persuade the progressives and environmentalists in his party to bide their time. He could show that he is willing to call tough shots and upset powerful factions within his own party in order to safeguard the well-being of average Americans. Studies show that Americans do want the government to do more on climate change. But many are leery that extremist politicians will deprive them of their basic needs (such as heat during winter) through a virtue-signaling maelstrom of policies all justified by the mantra of “saving the earth.”
If Democrats can forgo passing these kinds of policies for a while, they will get the chance to pass a lot more of them later. The question is whether Democrats are capable of forgoing the marshmallow, knowing they’ll get to feast on several more if they are able to do so. We will find out soon enough.
Callaghan sealed his fate, and in the end the fate of his political movement, by joking about the crisis and blaming it on a media frenzy. If Biden does the same, chances are America will soon turn cold—in more than one way.