Unemployment now has risen during 27 consecutive months in Britain, demonstration of a recession that will not end. John Major's new Conservative government points to other indices which it says justify optimism: rises in manufacturing output, retail sales, exports. But for people, jobs count. And the number of available jobs has diminished by three-quarters of a million in the past 12 months alone.
The Major government is convinced -- or at least feels obliged to continue to insist, given that it now is hostage to this policy -- that inflation has to be defeated once and for all, and that continued high interest rates will do this job, and afterward the economy will take off on a solid recovery. The current annual consumer-price inflation rate is 3.9 percent, higher than in the United States, Germany, France or Japan.
The government thus refuses measures that would stimulate the economy now -- demanded by several major business and industry figures in the past two weeks, who normally would whole-heartedly support Conservative economic policies.
People not only cannot find jobs, but those who do also discover that wages are disproportionately low by comparison with the past. The increase in average wages in Britain in the past 12 months was the lowest in a quarter of a century.
Does that sound familiar to an American reader?
One result of Thatcherism in Britain and Reaganism in the United States has been the loss of good jobs. In the United States, where the total number of jobs increased in the past decade, the actual wage paid has declined. On average, the new jobs were worth some $2 less per hour than the jobs lost.
This is the result of the loss of technological leadership by the United States, producing high-tech factory closings, compensated for by low-wage service work. The same thing has happened in Britain.
The Bush government in the United States and the Major government in Britain have in common a fatalistic approach to the economy. They both are the inheritors of leaders possessing a powerful and seemingly successful ideology of total market freedom, government deregulation and a practical abandonment of the idea that govern- ment bears a responsibility for a society's infrastructure investment or future-oriented research, not to speak of the social welfare of its people.
All these are supposed to be taken care of by the market interests of hyper-rational, omniscient, prescient, advantage-maximizing private economic actors. If airports, railroads, housing for the poor, health care for the masses, are good for a national economy, the market will respond and provide them. So the argument says. Governments can only do harm by interfering.
The trouble with this, for both Mr. Bush and Mr. Major, is that it seems not to be working. Their fatalism -- their insistence that things really are getting better and the problem lies with the media which "talks down" the country -- begins to resemble that of the mesmerized believers in the cult of the Juggernaut, throwing themselves under the wheels of the great cart bearing the god's huge statue (a god with the face of Adam Smith?).
Another generation of economic ideologues also believed in total non-interference in the economy. This was the conventional wisdom of the 1920s and early 1930s, when politicians and businessmen treated the Crash and Great Depression as unalterable aspects of a business cycle which in the end could only produce good. Keynes and Keynesianism came along and changed people's thinking, and as a result permanently changed the capitalist economy.
Mr. Major's additional problem is that his economic fatalism is accompanied by an accommodating passivity in other aspects of government, which makes an increasingly painful contrast to the hectoring certainties and activism of the government of her who is now the Baroness Thatcher. Mr. Major is far better liked by his colleagues than she was, but he is not succeeding as she did.
On the Bosnian issue, Lady Thatcher published a lucid and energetic call for military intervention against Serbian aggression a time when Mr. Major and his principal ministers were on vacation, the second-rankers left behind mumbling about how there really was nothing anybody could do about anything in the ex-Yugoslavia.
It even turned out that among the few ex-Yugoslavs who have managed to get to Britain to ask for asylum (usually because they have relatives in Britain), the Major government was deporting most of those who had touched down somewhere else on the way to Britain, so that even the U.N. High Commissioner for Refugees protested British policy. This was while the Germans, Austrians and Italians were taking in refugees by the tens of thousands.
The impression given is of feebleness, both intellectual and political, which is exactly the Bush problem. The 1980s were a curious political period for Britain and America, each with leaders who did not, perhaps, know very much, but who believed with passionate intensity in what they thought they did know, and convinced others of their beliefs. Their successors seem bereft both of conviction and -- to choose Mr. Bush's word -- vision.
For voters in the two countries, the difference is that Americans can throw Mr. Bush out in November, if they like. Mr. Major is safely in office for the next five years -- unless his own colleagues turn on him, as they did on Margaret Thatcher.
William Pfaff is a syndicated columnist.