The Travellers, Vol 5, Pt 8: The New Golden Age, 1970-1990
Having been returned to power in 1970, David Mooreâs new administration immediately faced a major dilemma: what to do about the United States. The Bretton Woods system was unravelling. America had been experiencing massive trade deficits for almost a decade and the strength of its currency had been seriously challenged when France and a few other countries demanded that their US dollar reserves be exchanged for gold. Moreover, even though the variants had significant manufacturing concerns in America, such as ICL, Rover, BAC, and Mercury, these companies and many others took most of their profits out of the country and stored them in London and Swiss banks as Eurodollars. There was clearly no way that the Federal Reserve could continue to support the convertibility between the US dollar and gold at a rate of US$35 to the troy ounce, especially as they were burning through cash on imports to fuel the war in Vietnam among other money pits.
The variants had half a mind to Follow De Gaulleâs lead and demand conversion of the UKâs dollar reserves, especially since the price of gold was now going up. However, Britain had been running a steady trade surplus almost every year since 1950. The countryâs reserves were a significant factor in global macroeconomics. Moreover, the âspecial relationshipâ had not been very special in recent years. Indeed, it hadnât even been all that close, to be honest. The UK government had needed to distance themselves a little from the Americans to appease French fears in the EEC. The country had also meddled with international affairs in ways the Americans didnât approve of while simultaneously becoming something of a spear carrier for the anti-apartheid movement, which reflected badly on the US as it suffered from race-related violence and embarrassed Washington through its reticence on the issue.
Had Ellen Falconer (nĂ©e Wilde), the newly appointed Chancellor (and the first woman to ever hold the post), gone to the Americans and demanded Britainâs gold, it would certainly have precipitated a major global economic crisis. Most likely, the Americans would have been compelled to refuse the request anyway, leading directly to a massive and unavoidable deterioration in relations between the two nations. However, there was absolutely no way she was just going to sit by while the real price of gold skyrocketed and the Americans unilaterally cancelled convertibility, wiping billions off the value of British reserves. A soft touch would be required though.
A full state visit to the US had been arranged for the summer of 1970 and took place shortly after the election. Officially, this gave President Nixon a chance to congratulate David Moore in person on his recent victory. Through gritted teeth, obviously. Unofficially, it was all to do with what on earth the Americans were planning to do about convertibility.
Ellen Falconer explained to her US counterparts that she believed the current market price of gold to be undervalued by about a factor of four and that, consequently, she harboured some serious concerns about the ability of the Federal Reserve to honour its financial commitments over the coming years. Both the Bank of England and the Bundesbank had been compelled to intervene to support the dollar on several occasions in recent years and, as she explained, the Treasury was reluctant to keep doing so while the dollar was evidently overvalued. Clearly, the veiled threat was that Britain, like France, was considering withdrawing its money. The prospect sparked a degree of panic in Washington where inflation and currency crises were threatening to derail Nixonâs first term in office. Eventually, a deal was worked out in which, should convertibility ever be âtemporarilyâ stopped, any loss in value suffered by British reserves as a consequence would be offset by reductions in the overall debt still owed to the US by the UK.
Barely a year later, Nixon was forced to do exactly what the variants knew would happen. The British debt to the US was all but wiped out over the course of the next few years and would be completely paid off by the end of the decade. Back in Blighty, the news was received by the mass of the media and the electorate as nothing less than an utter triumph for the Labour government. However, it would pale into insignificance when compared to their next trick which would come in 1973.
Whatever the variants personally thought about the various settlements that had been reached in the Middle East after World War 2, as representatives of a UN member state they were obligated to an extent to support the territorial integrity of other members. In 1973, Israel had not yet been twisted into the ruthless apartheid state it would become in MOT and, while the situation was far from being clear cut and there were very few âgood guysâ, the Soviet-backed Egyptian-Syrian invasion that would take place in this year was an act of aggression.
Britain under Prime Minister David Moore remained nominally neutral in the so-called Yom Kippur War. Not many people were fooled by that one though. The British had been selling arms to the Israelis since they had conspired together to provoke the Suez Crisis. Moreover, through membership of NATO and their close alliance with the US, the country was a de facto supporter of the Israeli cause by association. Thus, when OPEC announced an oil embargo on nations that had supported Israel in October 1973, Britain was included in the list of nations to whom sales would be prohibited. The global posted price of oil practically tripled overnight.
By short circuiting many of the development costs associated with the exploitation of North Sea oil and gas reserves, the variants had already connived to bring the break-even price for Brent Crude down to around US$25 per barrel. They had subsequently conspired with the oil majors to try and maintain oil prices above this level throughout the 1960s. Off the back of their success in this endeavour, the Labour government had ordered an expansion of BNOCs drilling activities during the latter half of the decade.
However, as more players entered the market, their price fixing cartel had become ever more difficult to sustain and, between 1968 and 1973, the price had begun to drop toward the US$22 mark. In the UK, the impact of this on BNOC had been papered over through the introduction of duties that resulted in Britain having comparatively higher oil prices than many other countries at the time, with much of the tax income then being rebated to BNOC to cover the shortfall. It was a neat accounting trick that attracted little attention in the media. Most were distracted by the headline imposition of the duties themselves which were justified as part of a response to a demand for action on âclimate changeâ from a rapidly growing environmental movement the variants were also supporting.
Following the BNOC expansion, the oil embargo had absolutely zero effect on oil supplies to the UK. Instead, the nation had just acquired a licence to print money. The price per barrel would almost never drop below BNOCs breakeven point again. With their ramped-up drilling capability, BNOC became an oil exporter, clearing over 100% profit on every barrel sold.
James Hunter, who was now the minister in charge of the area, announced the countryâs new â50-year planâ to drain the North Sea pursuant to a subsequent complete decarbonisation of the nationâs energy policy by 2020. As part of the same initiative, Ellen Falconer informed Parliament of the governmentâs intention to create a âsovereign wealth fundâ to manage the proceeds from the windfall. Basically, the idea was that the nation would look to create as much money as it possibly could from oil and gas over the next 50 years and funnel the proceeds into a massive hedge fund, the proceeds from which would be utilised to support public investment in infrastructure, health, pensions, social security, education, and the environment. There were increases to grants for students and those in training. Dental and optician charges were removed and even a course of orthodontics was made free for those under the age of 21 on referral from their regular dentist.
Because the UK government was completely in control of the supply of oil and gas from the North Sea, it was able to decide exactly how much was sold for export and how much was retained for use at home. While almost every other country on earth was suffering from the paroxysms of oil induced inflation, the price in the UK remained broadly stable, rising only by virtue of government policy to increase duties to discourage excessive consumption on environmental grounds. On top of this, the country had almost completed its roll out of thorium-based nuclear power stations, so the cost of electricity had been falling consistently along with oil consumption for almost twenty years. Over the same period, the energy efficiency of the countryâs housing stock had been steadily improving.
Even though Sterling offered practically no interest, the strength of the UK economy brought new problems both during the build up to, and in the wake of, the collapse of Bretton Woods. With global currencies now all operating in a de facto floating market, investors were fleeing from the US dollar. Sterling was one of their main ports of call. As a consequence, it began to rise in value against the dollar, damaging the competitiveness of the nationâs all-important exports.
Moreover, the rising value of Sterling and the fall in the dollar imperilled the deal that had been struck during the Smithsonian Conference in December 1971, once again compelling the UK and Germany to intervene to purchase overvalued dollars. The British had been at least partly to blame for this.
There had been a rather tense standoff over the question of the revaluation of Sterling against the dollar: the Americans wanted Ellen to increase by 10% from US$2.5 to US$2.75 while the UK delegation was adamant that they could not go above 4%. In the end, the British got their way and Sterling was revalued to US$2.6 while the US dollar itself was devalued by 8% with convertibility at US$38/ounce. This had been part of a bargaining ploy that aimed to apply pressure on the US and protect British industrial interests. Unfortunately, they hadnât been able to fully achieve their goals.
Despite having support from several of the other leading industrialised nations that were present, the variants had once again been unable to persuade the United States of the virtues of their Bancor proposal during the Smithsonian Conference. The Nixon administration remained fixated on the restoration of convertibility because the benefits that accrued to the Federal Reserve from operating the global reserve currency were simply too great to abandon.
Within the space of a few months, it was clear that the Fed was still not going to be able to honour this new arrangement, as Ellen had already pointed out would happen at the time. At both the EEC and international level, the major European nations had already tried realigning their currencies both toward the US and each other in an abortive early attempt at a form of currency union. There seemed little option but to just go with the float. The UK government relieved the Bank of England of their duty to intervene to support the US dollar, and Pound Sterling left the last remnants of the Bretton Woods system.
However, there was a radical alternative option on the table for the members of the burgeoning European Economic Community. Following the failure of the âsnake in the tunnelâ European Monetary System in 1973, the British put forward their plan for a Europe-only implementation of the Bancor proposal, which they dubbed the âEuropean Currency Unitâ.
Under this scheme, member states would each retain their own sovereign currency with full control over monetary policy, but trade in each on global markets would cease. Instead, the ECU would constitute a single unified external currency facade for the whole of the union. There would be a European Central Bank (based in London, naturally) which would manage the currency and intervene to maintain its value within desired bounds, backed by a common reserve fund.
However, there was no notion that the ECU would be a conventional circulating currency for use on a day-to-day basis by the general public. Certainly not in the foreseeable future. It was predominantly a unit of accounting for the purposes of trade, both internationally and within the EEC. In the latter context, the sovereign currencies of each member state would enter the system at a fixed rate of exchange to the ECU. Trade between each of these countries would then be carried out in ECUs with imbalances potentially leading to devaluations or revaluations as necessary to achieve a balance. International trade would also be carried out in ECUs but would obviously not have any of the same sovereign currency valuation implications.
The potential benefits of the proposed system were clear to most people already since the idea hadnât come completely out of the blue. Firstly, the ECU represented a significant step along the path toward integration, which was the whole point of the community. However, it did so in a way that allowed member states to retain control over national monetary policy while instituting a trade system that promoted equal levels of development that would open further options for alignment down the road. Furthermore, members would be protected to a certain degree from external shocks and currency attacks by combining growing European strength to create a single internationally traded currency front that would be potentially powerful enough to challenge the US dollar for hegemony. Although foreign currency traders would be very put out, there would still be more than enough scope for European financial institutions to use the fluctuations between the ECU and both EU and non-EU currencies to make tonnes of money.
The real danger was that Nixon, who had been re-elected in 1972, would throw his toys out of the pram and the Western Alliance would fracture. Quite a few European nations had done quite a few things that had pissed off the Americans in recent years, and Britain had been no exception. However, very few people, the variants included, were of the view that pursuing such a course of action without at least consulting the Americans first was a good idea. Fortunately, Nixonâs days were numbered, and he would be succeeded by the exceptionally dense Gerald Ford, followed by the considerably more affable Jimmy Carter. After a couple more years of discussion and diplomacy between Brussels and Washington, the ECU would finally become real in 1975. However, first there was another election in the UK and a lot of other things had happened in other spheres since the last time the country had gone to the polls.
From the beginning of their third term in 1970, David Mooreâs Labour ministry had begun to push through the various constitutional reforms that had been pledged in their manifesto. In addition to there being a traditional first past the post general election in 1975, there would also be elections using STV for the new regional assemblies for Scotland, Wales, and the nine English regions that had been defined in line with European parliamentary constituencies. There had been considerable boundary reform to support this and a whole raft of corresponding changes to the forms and structures of local governance, for which elections would also now be conducted using STV. This brought them into line with the elections to the European Parliament which had been held since the early 1960s.
Controversially for some, the other institution for which elections were to be held in 1975 was the newly constituted second chamber of Parliament. Reforms to the House of Lords had by necessity involved a good many compromises but still entailed the inevitable constitutional spat when they refused to vote in favour of their own abolition. Obviously, it didnât matter as the government had a large enough majority to pass the required bill in two successive sessions and force its passage into law.
The reformed House of Lords, as it was still to be named, broadly followed the abortive 2012 Conservative-Liberal Coalition governmentâs plans from MOT. Almost eleven-twelfths of its 400 members would henceforth be elected to serve terms of 10 years as representatives of multi-member constituencies aligned with those that had already been determined for elections to the European Parliament, with each returning nine members on average. However, candidates for election were restricted to a roster of named categories of people, including peers of the realm, ordained ministers in recognised religions, current or former directors of publicly listed companies, trades union leaders, members of various approved professional bodies in fields such as law, accounting, and science, trustees of registered charities, and other assorted worthies. As with the distribution of seats by region (determined by population), the intention was that this list could be amended via legislation as circumstances changed over time.
The remaining 40 members were to be made up of a reduced quotient of 20 Lords Spiritual and 20 âministerial membersâ appointed by the Queen on the advice of the Prime Minister during each term of Parliament. Due to the presence of this appointed quotient and the restrictions on eligibility for candidacy, the chamber retained its advisory role. Clearly, these changes also required, or at least suggested, a few additional reforms.
Firstly, a Supreme Court had already been established, separating the judicial functions of the Lords from its legislative role. With a few exceptions, the creation of hereditary peerages was abolished. In line with these modernisations, there was also reform to the honours system to instil a smidgen of democracy and transparency to the process and prevent it being used as a corrupt practice of political patronage, with most nominations being made at a local and regional level before being subjected to review by a Parliamentary committee. Five-year fixed term Parliaments had been introduced to prevent governments from manipulating the electoral cycle and the economy to their advantage, which was partly why there was an election in May 1975 rather than at any earlier point in time. However, there was still no proportional representation for the House of Commons.
On the domestic front, there was also a new Home Secretary: Christopher Nolan. The programme of liberalisation that had been undertaken by his predecessor, Roy Jenkins, was continued. There was a limited trial legalisation of cannabis in 1973 which was extended the following year. The drug still could not be imported, both domestic growers and retailers had to be licenced, and cannabis cafĂ©s could not sell any other form of restricted substance, such as alcohol. There was no âoff licenceâ and advertising was banned. It was also heavily taxed, so the government made a decent chunk of cash from the new setup. In conjunction with this move came a significant increase in the budget and pay for enforcement agencies, especially the police, which was often linked to changes in structure, process, and ethnic make-up of the force.
With the press having had twenty failed years to get their own house in order, the government stepped in and created the Media Standards Commission to bring press, television, radio, film, and advertising within the purview of a single binding regulatory authority. Composed of representatives from the media, the NUJ, the government, academia, and the general public, the MSC gained stringent powers to punish flagrant breaches in standards. A privacy law was enacted in conjunction with these reforms to draw a line under the growing tendency toward invasive reporting on celebrities and public figures that had no public interest justification. At the same time, governance of the BBC was reformed with the Board of Governors gaining a democratic basis for appointment from the licence-fee-paying constituency.
The creation of the various regional assemblies was mirrored in a restructuring of central government departments. These all gained a new centre of operations in each region in a bid both to provide jobs stimulus to various parts of the UK and overcome a southeastern myopia within the civil service. As part of this reorganisation, Welsh-English bilingualism became a requirement for things like road signs and government processes in Wales going forward. A new independent Welsh language television channel was launched along with a national English-language counterpart. As in MOT, they were called S4C and Channel Four.
A selection of nationalised industries were restructured as part of a process of what was called âmutualisationâ. The idea behind this was to take the next step on the path toward industrial democracy. During the Attlee years, many industries had been ânationalisedâ, but retained the same corporate structure and, in many cases, the same people were running them. Under mutualisation, some of these companies were to be transformed into cooperatives held in equal parts between employees, customers, and the government.
There were a few considerations around how to manage the ownership portions belonging to these respective interest groups but, at least for workers, this typically entailed holding a third of the company stock in a trust for the benefit of past and current employees. Customers were typically represented through similar trusts placed under the management of consumer groups. Meanwhile, the government would continue to express its policy concerns through retaining a sizable holding. The first testbed was the railways, but it was soon expanded to the utilities through a combination of local authorities and national bodies.
Part of the argument in favour of mutualisation was to increase the options available to the nationalised companies for obtaining credit and raising loans. New legal forms were established to support the process in which these cooperatives enjoyed a favourable tax status. They were also permitted to issue non-voting stock as a means of obtaining the funds required for expansion or modernisation.
On the international stage, global events from the perspective of the British media were mainly focused on Ireland, Europe, and the Middle East. And mostly in that order. Although the situation remained febrile in Northern Ireland, the Moore administrationâs approach had begun to draw a bit of the sting from the sectarian conflict. The accession of the Republic of Ireland to membership of the EEC had necessitated an opening of the border, which had almost ceased to be policed. With some micromanagement by the Home Secretary, the UK security services were, on the whole, fulfilling their brief of being non-partisan adequately well, and paramilitary groups on both sides were gradually being hollowed out through legal prosecutions. At the political level, negotiations had been ongoing for an extended period between Whitehall, Stormont, and Dublin to seek a resolution. As a result, Stormont was to be one of the regional assemblies that would have fresh elections with STV in May 1975.
In Southern Rhodesia, Ian Smith finally bowed to the inevitable after several years of escalating political, economic, and military pressure. A new constitution was agreed for an independent Zimbabwe that stipulated equal voting rights for all regardless of race or education. Joshua Nkomoâs ZAPU party narrowly won the ensuing election over Robert Mugabeâs ZANU party, in part thanks to the considerable financial, military, and propaganda assistance the British had provided over the past decade.
Elsewhere, there was an opportunity to parade as an international statesman of importance. Having politely waited for the Americans to go first (and deliberately let Beijing know that this was what they were doing), David Moore visited Mao in China in 1973. They discussed a few global geopolitical issues of importance, including the future of Hong Kong. The variants had used their power of appointment to ensure that the colonial relic had been placed on a path toward gaining a properly democratic administration, which had irked the Chinese. The team fully appreciated that there was going to be no budging Beijing over the question of sovereignty when the UKâs lease on the New Territories expired. Consequently, the visit was mostly about attempting to improve relations and gradually expand Hong Kongâs connections to the mainland.
Then there were the events in Chile where Allende had been elected as president in 1970. This was a big deal for some in the trade union movement in Britain and on the left of the Labour Party. However, the situation had already diverged somewhat from MOT.
The British government had been involved in interference in the 1964 election that aimed to keep Allende from power. It had been something that had happened just before the crew ascended to power the same year. David Moore had then played host to President Frei in 1965. The UK had been an important stop on his European tour. There had subsequently been a return state visit by Queen Elizabeth in 1968.
Chile was a country in which the variants had gained a good deal of experience over the years, and it was dear to them. President Frei wasnât a bad president but, under the terms of the constitution, he couldnât stand for two successive terms. There were many flaws and weak links in Allendeâs popular unity coalition and Chile was polarised over the matter of his election and their programme for government. However, from both a humanitarian and a political perspective, there was no way they were going to allow the Americans to replace Allende with a fascist military dictatorship. It was simply a completely unnecessary over-reaction.
The team had been active in the country since their arrival. North Star and Amoco, through various subsidiaries and investments, were a very significant presence. Far more so than Kennecott and Anaconda. Rover-Triumph and Mercury had also opened manufacturing plants in the country in the 50s and 60s, producing vehicles and consumer electronics for the Pacific and South American markets. Empyrean had owned a few media outlets in the country for several years. Even more recently, ICL and Inmos had established interests in the region and, since Allende had come to power, had been working on the creation of innovative computer systems for the new government in Santiago. Therefore, the British government was officially concerned about maintaining political and economic stability in the country and protecting Chileâs democratic traditions.
Nevertheless, the team had to tread very carefully. The US government regarded South America as their backyard and Britain had its own rather tricky negotiations to conduct with them over Bretton Woods which could easily be derailed by any heavy-handed intervention in Chile that ran counter to publicly acknowledged policy. Fortunately, much of what the Nixon administration was doing was being deliberately kept off the books, so London had a certain amount of leeway to profess innocence.
Variant influence in Chile wasnât restricted to commercial matters. There was also the impact of postwar Britain itself. Successive Labour governments under Attlee and especially David Moore had made a big deal of the âBritish path to socialismâ. Through the work of several academics, not the least of whom had been the economists David Chadwick and James Fox, it had come to constitute an entire school of thought which had gained authority in large part through the successes of the UK postwar economic boom.
Several influential people, variant and non-variant alike, knew Allende and various members of his administration well and were generally sympathetic toward their aims for Chile. As a result, a few of them were hired by the new government in advisory roles at CORFO and the ministry of finance. Ultimately, what they needed to achieve was to provide Allende with sufficient breathing room to operate for 6 years by resisting the twin pressures from both the left of his own coalition, who were often somewhat romantically in favour of a Cuban-style struggle, and the US-backed right-wing within the country. This wasnât an easy trick to pull off.
Allende had come to power on the back of great promises to the many impoverished and oppressed people of his country. Moreover, most correctly perceived that they would only really get the six years of his term to effect irreversible change, so there was a considerable degree of impatience to act. However, his government faced challenges to their authority and ability to act independently almost immediately. The Americans used their political muscle to block World Bank loans, on which the Chilean economy was largely dependent, and cancelled US aid. Coinciding with an unrelated drop in the price of copper, these measures obliterated the Allende administrationâs ability to pay for its proposed reforms.
New sources of loans were found among Western banks, albeit at higher rates of interest. Moreover, the UKâs international development programme was able to mitigate some of the loss of aid for the first couple of years until US objections in Whitehall became more belligerent, jeopardising the Bretton Woods negotiations. For David Mooreâs government in the UK, their intervention was justified both in terms of supporting British industrial interests and taking a âcuddly bearâ approach to avoid the loss of Chile to the Soviet Union. However, no one was really buying that line, neither in Washington nor even within their own civil service.
However, no one in government could really tell the variantsâ private business concerns what to do in the country. In 1970, ICL had begun work on âProject Cybersynâ; an ambitious experimental system designed to facilitate the management of the Chilean national economy. Meanwhile, Rover, Mercury, and North Star were getting into the spirit of things by expanding their long-established worker ownership scheme into a full âmutualisationâ programme in concert with the new government. In these efforts, they often enjoyed strong support from sections of their own workforce in the UK, many of whom were keen to be actively involved in these experiments in solidarity with those they saw as their Chilean comrades.
The presence of these major (and rather more socialistic) manufacturing concerns in the country had altered the course of events in two main ways. Firstly, they had made a significant contribution to alleviating the dependency of the countryâs balance of payments on the price of copper. Secondly, they had come to strongly inform the development of the concept of âpoder popularâ as it was elaborated by the Allende government.
Nevertheless, the economic situation in the country did begin to deteriorate as the administration resorted to printing money to make up the shortfall in lost loans and aid and fund their reform programme. This inevitably led to a significant rise in inflation which was further exacerbated by the global economic situation after the oil shock of 1973 and the removal of British aid in response to US pressure. However, the situation was not an impossible one of hyperinflation, shortages, and rampant black markets.
This amelioration of the economic situation delayed the ability of the CIA funded domestic opposition to escalate the situation into a crisis that could feasibly result in a call for intervention by the military. Nevertheless, several policies were bitterly contested, especially land reform and the nationalisation of utilities, transport, communications, and banks.
The CIA fuelled the febrile atmosphere by funding strikes and protest groups. However, their efforts often backfired as, supported by the rapid emergence of substitute management systems, supporters of the government were able to act in a coordinated manner to mitigate their impact. Nevertheless, concerted resistance from across the prominent and important middle-class small business community in the country was difficult to counter. Ill-advised attempts by the government to counter rising inflation with price fixing that aimed to restrain wage demands and the cost of living were met with widespread hoarding and black marketeering as retailers simply refused to conduct transactions within the proposed price regime. The government response, which included the establishment of state-run outlets, merely inflamed an increasingly divisive conflict.
Fortunately, in addition to their influence within the spheres of economics, industry, and technology, the team would acquire a certain impact on military matters during Allendeâs presidency. After the UK government was compelled by American pressure to halt their aid programme in Chile, they switched to selling them armaments instead. Naturally, this cut-price deal came with a coterie of British military advisors. This group was headed by a man named Lieutenant-General Robert Falconer.
A member of the 1925 generation, Robert Falconer had become a commissioned officer in 1944 at the age of 19. As a young second lieutenant in the Army Air Corps, he had served as a helicopter pilot during the D-Day landings and the successful Operation Market Garden. After WW2, he had gone on to serve in southeast Asia, first during the Malayan Emergency and latterly as a British advisor to the US on counterinsurgency and jungle warfare in Vietnam. Most recently, he had been the man Downing Street had insisted was put in charge of the British Army peacekeeping force in Northern Ireland. Falconer was a specialist in hearts and minds missions and the de-escalation of sectarian violence. And he spoke Spanish. He was the obvious man for the job and, once again, Downing Street insisted on him personally for the mission. Which had nothing to do with the fact that he was married to the Chancellor of the Exchequer.
In Chile, Falconer was charged both with providing training and support for the armaments the British were selling the military in the country and serving in an advisory capacity to General Carlos Prats and Allende. As a result, some of the militaryâs grievances concerning pay and levels of equipment were addressed in return for greater levels of professionalisation and an increased commitment to the Schneider Doctrine. By way of compromise, the President took the unpopular step of disarming various sections of his support base who were exacerbating tensions in the country. A couple of low-level plots were uncovered, and minor rebellions suppressed, leading to several members of the military hierarchy being purged.
Ultimately, Allende clung on for a full term. However, despite considerable progress having been made by 1976, his programme was widely perceived to have failed to achieve most of its objectives even though the economic situation had begun to stabilise toward the end of his presidency. In the absence of another candidate of Allendeâs standing, the popular unity coalition split, and Eduardo Frei won a second term. In part thanks to generous levels of financial and logistical support from the CIA, of course.
Frei reversed most of Allendeâs nationalisations and Chile more or less reverted to its previous course. Nevertheless, variant influence on the government of the country meant that the Chicago Boys, such as they still were in this timeline, were unable to use the country as the site of an experiment in neoliberal capitalist economics. The fractured left would eventually return, but for now they were too divided between radical revolutionary groups seeking an extra-parliamentary route and the centre-left Socialist Party seeking to apply pressure within the bounds of the existing constitution.
Back in the UK in 1975, despite being cushioned from many of the more detrimental economic side effects of the oil crisis, the global situation meant that growth had begun to stagnate. Even though inflation was being kept in check to an extent, the UK was by no means immune to the global economic situation and production costs were rising. The growth of several second world economies combined with the rising value of floated Sterling presented a significant challenge to the competitiveness of British industry in a few sectors, especially traditional industries such as shipping, coal, and steel. Altogether, these created a squeeze on profits which in many cases were pushing companies out of business or compelling them to offshore manufacturing concerns.
In 1974, a year before the general election, David Moore stood down from the leadership of the Labour Party and resigned as Prime Minister at the age of 68 to make way for new blood. Although there were challengers from factions on both the left and the right of the party, Ellen Falconer became the new leader and Prime Minister. The variants and their allies within the Labour movement were facing increasing pressure from both wings of the movement. The left wanted a far more aggressive push toward the implementation of a fully socialist economy and were vehemently opposed to many of the UKâs foreign policy positions regarding matters such as the âspecial relationshipâ with America, NATO, and the nuclear deterrent. Then there was a growing faction to the right of the variants who were under the sway of several interests in the City and were advocating greater freedom of action for the financial markets, the liberalisation of consumer credit regulations, reduced taxation, and a limited form of monetarist economic policy to counter inflation.
On the opposition benches, Ted Heath had attempted to cling on to the leadership of the Conservative Party even after losing his second, and the Toriesâ third, successive general election. However, he had eventually been ousted. Of all people, Enoch Powell had won the ensuing leadership contest and the Conservative Party had lurched to the right. Aside from quite a lot of dog whistle racism, they were now opposed to the EEC, immigration, benefits scroungers, dope tourists, unwashed Marxist students, nationalised industry, and Keynesian monetary policy. Naturally, the party spin doctors had endeavoured to give many of their more repellent policies a veneer of respectability, attempting to justify an anti-immigration stance on economic grounds and pretending that âvoluntary repatriationâ was in the interests of its victims.
The 1975 election was consequently one of the most bitter and divisive that would ever be fought in the UK. Aside from the global economic uncertainty, the Labour government had done much that was controversial. The continuation and even acceleration of the policies of social liberalisation and racial and gender equality had led to profound changes in British society that a great many disliked with a rabid vehemence, especially among the older generations. The Labour government under David Moore had taken some steps to tighten immigration controls but had considered the acceptance of Kenyan and Ugandan Asians to be a moral duty. At the same time, the question had become compounded in the eyes of many voters with the implementation of freedom of movement for workers within the EEC that had become effective in 1970. These developments were linked in the mind of many with other reforms to the constitution and to the European monetary system, which were both still regarded as a work in progress that could be stopped. Voters had had sufficient time to forgive and forget the Tories for the national embarrassment of Suez while their sleaze scandals from the early 1960s now felt like trivia from a bygone age.
On the other hand, the UK had not been in such a strong political and economic position either domestically or on the world stage since the early 20th century. Whether or not one agreed with Labourâs policies, in government they had taken a leading position on the international scene and regularly stood up for the countryâs interests, even against the US when the need arose. The frequency and duration of strikes had gone down and industrial relations had begun to improve markedly. The land tax, second property super taxes, and rent controls in concert with a continued social housing programme and the relaxation of some consumer credit control had led to a gradual loosening of the housing market such that it was easily possible for the vast majority to either buy or rent at an affordable price. Mutualisation had begun to grant a semblance of accountability and even control over the formerly nationalised monopolies in the utilities and transport. And oil money was beginning to promise a long, prosperous future of accumulated wealth. Having been in power for two thirds of the postwar era, Labour Party policies were widely (and correctly) regarded as having been responsible for this unprecedented good fortune by most.
Nevertheless, Labour lost a lot of white working-class votes in the 1975 general election over the question of immigration in conjunction with their refusal to intervene over a number of recent high-profile closures in the coal, steel, and shipping industries which the government had deemed to be necessary structural adjustments. Fortunately, the Tories lost almost as many votes from the left wing of their party, as some sections of the southern middle class fled from Powellâs rather unpleasant racism, anti-American imperialism, and âdangerously radicalâ monetarist economic proposals on which Labour had preyed extensively during the campaign. However, the main beneficiaries of the latter defection were the resurgent Liberal Party under Jeremy Thorpe.
The result was a hung parliament in which Ellen Falconer was compelled to make a deal with the Liberals to form a government with a comparatively slender majority of around 20. Thorpe demanded voting reform for elections to the House of Commons, which Ellen was delighted to accept, being one of a faction in the Labour Party who were in favour of this anyway. Other agreed proposals in their coalition programme included a minimum wage, maternity leave, the extension of state education into the provision of free pre-school childcare facilities, punitive taxes on companies with high wage differentials between the top and bottom earners and on excessive dividend payouts, corporation tax surcharges for above inflation price rises, tax breaks for investments in productivity improvements, stronger environmental controls with charges for heavy polluters, a âmutualisationâ of the NHS and welfare services through elections to Local Health Authorities, and a complete end to means tested benefits through the introduction of a credit income tax scheme, and the legal formalisation of the UK constitution in conjunction with a Bill of Rights and a new Nationality Act.
Many of these policies were common to both the Liberal and Labour Party manifestos anyway, and Falconer was part of a group of âsocial democraticâ Labour MPs who had long advocated working more closely with the Liberals, so it was a comparatively natural alliance. Nevertheless, the coalitionâs ability to act remained circumscribed by opposition from factions on the left of the Labour movement, who remained opposed to various elements of the whole European deal that ceded sovereignty over a range of competencies, who could act in concert with the Conservatives to vote down the government. This group, consisting of between 20 to 30 Labour MPs, had been firmly against the creation of the ECU and the ECB in particular. They generally favoured protectionist trade policies, tighter capital flow controls, extensive state intervention in industry, the complete nationalisation of banking and insurance, and rigorous price controls to protect British workers from the vagaries of global finance and keep a lid on inflation and the rising cost of living.
By contrast, Ellen Falconerâs headline message was that the problem was global, and that the UK was going through a necessary (albeit difficult) period of structural readjustment. British manufacturing in several sectors, including the automotive, aeronautics, consumer electronics, and IT industries, were among the strongest in the world and that the government should therefore be encouraging others to drop their protections rather than raising the drawbridge and inciting them to do likewise.
Unfortunately, this process would spell the end for swathes of traditional industries, such as shipping, coal, and steel, the surviving elements of which would need the freedom and flexibility to exploit high value specialist niche areas. Although international development exacerbated the situation for these concerns, it was vital in the long term to foster new markets for the manufacture of high value goods that provided well-paying skilled jobs.
In future, the UK economy would also need to look to expand tertiary sector activities, including finance, tourism, and software, which were additionally aligned to national energy and environment policies concerning long term decarbonisation. The creation of the ECU and the existence of the ECB in London were critical to this transition since they created opportunities for finance while allowing sufficient freedom in domestic monetary policy to forestall deflationary pressures from the adherents of monetarism. Instead, the government planned to use supply side policies, introducing a new round of massive investments in productivity improvements in industry through support for automation and computerisation. Any resulting structural unemployment would be dealt with through the continuing expansion of training and education. A âNational Enterprise Boardâ would also be created to provide startup capital in conjunction with the National Development Bank (created in the late 1940s) and the EEC. Those who fell through these provisions would still be protected by the welfare state.
Ellen Falconerâs coalition government enjoyed a respectable first term in office. The global economic situation stabilised to a certain extent over the latter half of the decade as world markets adapted to the collapse of Bretton Woods and the oil shock. After the brief blip that had occurred between 1973-5, the UK economy resumed its impressive postwar growth of 3-5% per annum, albeit at a gradually slowing rate, over the remainder of the decade. However, there was a further impending crisis looming of which not only the variants were aware. Trouble was brewing in Iran which held the potential to throw the global economy into crisis again. Indeed, various problems in the Middle East, that had been sown mainly by Western oil imperialism over the years, were coming to a head.
The variants had a few channels available to them that could be utilised in a bid to defuse the escalating situation. Through their hold on the British government, they controlled both BP and BNOC. Privately, they had maintained direct control over Amoco and, through North Star, held majority stakes in several other oil and mining companies. With Carter in the White House, there were also somewhat warmer relations between London and Washington than had been the case over the past decade or so.
Nevertheless, the Middle East was a theatre the team often found frustrating as they continually butted up against the limits of their numbers and abilities. Generally speaking, the crew didnât micromanage any of the organisations with which they were involved and their capacity to influence events was typically limited to broad policy and strategic direction or reactive use of shareholder power. Moreover, while they had often resorted to creating clones to help progress particular low-level interests, their roles were necessarily similarly limited as the insubstantial nature of these clone identities meant that they couldnât really undertake any operations that might make them famous.
As one might expect from Miles, the variantsâ attitude toward the problems in the Middle East demonstrated a certain degree of âIrishnessâ: if they wanted to find the path to a peaceful solution then, quite frankly, they wouldnât have started from here. Therefore, their primary concern was to try and delay, forestall, and redirect events such that they would mitigate the potential for the successive crises that would envelop the region and open the door to both neoliberalism in the West and Islamic fundamentalism in the Middle East. Fortunately, they did not need to do everything themselves and had numerous agencies, both corporate and governmental, to do their bidding. On the other hand, they were often constrained by the realities of politics and finance.
The Attlee administration had abstained on UN Resolution 181 and subsequently refused to help enforce the partition of Mandatory Palestine against the wishes of the existing Arab population. However, in subsequent years, the British government had become quite pally with Israel during the Suez Crisis. On coming to power in 1964, David Mooreâs variant Labour administration had endeavoured to pursue a policy toward the region that was consistent with its principle of acting through and in conformance with the UN wherever and whenever possible and avoiding anything that might jeopardise the UKâs membership of METO, the NATO-like anti-Soviet Middle Eastern Treaty Organisation military alliance. Therefore, their position was to seek a two-state solution that broadly sought to implement Resolution 181 through the agreement of all sides in the dispute. It would have been better had the UN actually acted consistently in the first place and bothered to allow the population of Palestine to determine their own future, but Miles had some sympathy with the right of Israel to exist, especially now that it was a fact on the ground.
Elsewhere in the Middle East, the British government had a lot of previous form, so they often had to tread very carefully when representing that institution. Consequently, many of the teamâs activities were carried on through their commercial concerns in places like Iran, Iraq, and the Arabian Peninsula, although they also utilised the Department for International Development and MI6 where necessary and appropriate.
Regimes such as that of the Shah in Iran were hardly benevolent, being in most cases profoundly oppressive and corrupt to the core. Nevertheless, through their commercial, political, and media influence, the team had over the years managed to get the likes of BP and Amoco to behave in rather less Machiavellian ways by persuading them to foster pro-Western sympathies in the regions in which they were operating through redistribution of profits into local development schemes, arguing that this was in the long-term self-interest of these firms. Once in government in Whitehall, they had instructed both the DID and MI6 to perform similar functions; not that these missions were always undertaken competently mind you. Behind the scenes, much as they had done with Ian Paisley, the crew themselves had preemptively assassinated a number of troublesome individuals, such as Sayyid Khomeni. Although, as always, other figures inevitably emerged to appeal to their constituencies as a route to power.
Rather more subtly, there was also the growing influence of the energy policy that they had been able to implement and maintain in the UK during the postwar era. After 1973, the impact of this had begun to become noticeable at an international level. Following the oil shock, Rover had unveiled a range of practical electric vehicles based on the results of research into battery technologies that had been ongoing at Mercury Electrical Industries since the late 1950s. These had enjoyed a certain amount of success in the US market. Moreover, in alignment with the UK governmentâs stated long term energy strategy, the British government had announced a scheme to extend infrastructural support for electric vehicle charging. Since the UK was now almost completely powered by thorium-based nuclear power stations, it was practically free, so electric vehicles had begun to spread in Britain too.
Britainâs nuclear programme was not cheap, but it had been copied by a number of other leading industrialised nations as well as in emerging powers, such as India. In conjunction with this, there was increasing global pressure over the still emerging issue of âthe climate crisisâ, which had become a matter of concern for the UN. The UK government were currently presenting it as a kind of Pascalâs Wager: if the scientists were right, then it would be essential to undertake this massive structural realignment of the economy to decarbonise; if they eventually proved themselves wrong, then the country would still have gained by undertaking significant amounts of research into cutting edge technology which would create opportunities in other areas for economic gain.
While most of the world, including the UK, remained dependent on oil for electricity generation, transport, and the production of derived materials, demand had begun to flatline in recent years as usage in each category began to move gradually over to alternatives in an ever-increasing number of places. This process was also beginning to have a significant impact on the geopolitics of the Middle East. While America still wanted to âcontainâ the Soviet Union as part of its grand strategy for the Cold War, many in Washington had begun to think that the region was not so critical to meeting its energy consumption demands in the long term.
The overall impact of this broad-spectrum strategy conducted over the course of several decades was manifold. The Shah was overthrown by a revolution in Iran in 1979, but it was at the hands of Mehdi Bazargan and the Freedom Movement of Iran who were seeking to enforce the 1906 constitution. This did produce a bit of an oil shock for a while but, compared to 1973, it was small and short-lived.
In a similar vein, the Saur Revolution never occurred in Afghanistan. Despite his autocratic approach and many failings, Mohammed Daoud Khan remained in power. This created a kind of âsoft-Islamistâ axis to the south of the USSR that generally endeavoured to maintain a non-aligned stance in the Cold War while seeking to pursue policies of modernisation in the context of which both the West and the Soviets sought influence through aid. It was a febrile and fragile situation, but one which would endure until the end of the Cold War.
Because of the emergence of this Iran-Afghanistan axis, there was also no all-out Iran-Iraq war, although there was tension and a number of border skirmishes. Baâathist Iraq became something of a pariah state in the West due to its stance over Kuwait and consequently aligned itself with the Soviet Union. Based on its territorial claims, Iraq would often adopt a belligerent stance toward some of its neighbours, including Kuwait, Iran, Syria, Turkey, and Jordan, but it represented a threat that could be contained due to its isolation within the Arab League. That was bad news for the Kurds but unfortunately the variants had to throw some people under the bus.
As for Israel and Palestine, well, that was much the same old shit show sadly. The Americans were a little less interested in propping them up, but the Zionist lobby in the US was still strong, so their nominal position remained one of support for the territorial integrity of Israel. The team were often able to apply both official and back-channel pressure on both sides in the dispute, so there were a series of agreements in the late 70s and early 80s around a two-state solution guided by Resolution 181, but they were regularly disrupted by implacable extremists on both sides. A UN peacekeeping force would remain in the region almost in perpetuity.
In 1980, there was another round of elections to local authorities and assemblies at all levels in the UK, including the House of Commons. For the first time ever, the latter was conducted using STV. Margaret Thatcher had become leader of the Conservative Party which still represented the main opposition to Labour under Prime Minister Ellen Falconer.
In some ways, it was once again not an ideal time to go to the polls. The recent revolution in Iran had caused a bit of a blip due to the disruption in global oil supplies and a consequent increase in prices that had led to cost-push inflation. However, Ellen Falconer had long since proven herself to be a dab hand at managing such crises when they occurred.
The British government used its monopoly control over BNOC to suppress oil price rises in the UK. This considerably aided UK export manufacturing, briefly rendering it comparatively far more competitive than usual. Moreover, with the ECSB still propping up the domestic coal and steel industries as part of a long-term transition strategy, these traditional sectors received a significant boost that helped sustain them, which played well with many core Labour supporters. Although a lot of import-dependent industries often suffered unavoidably during these periods, the Treasury typically instituted a system of duty rebates to soften the blow while the NEB would sometimes step in to provide additional support if necessary. In large part due to variant influence, these were all forms of state aid that had become institutionally endorsed within the EEC that sought to minimise price fluctuations and protect European businesses from external shock. As part of this, the common agricultural and fisheries policies the variants had helped to negotiate, which included exemptions for the UKâs special relationship with the Commonwealth (which gained access to EU markets), assisted suppression of any rises in the cost of living.
For her part, Margaret Thatcher had not spent the formative years of her career watching the gradual breakdown of the postwar consensus and social democratic economic norms. At least, not in the UK. Nevertheless, her politics were driven by a deep-seated social conservatism and a pronounced adherence to forms of philosophical individualism and economic monetarism, informed by the likes of Ayn Rand, Friedrich Hayek, and Milton Friedman, which the variants had been unable to suppress completely. She had succeeded Powell after the debacle of their 1975 defeat by virtue of being a âcompromise candidateâ who was sufficiently acceptable to both wings of the party.
Britain already had a dynamic economy with a large SME sector in which it was reasonably easy to setup and do business. Marginal tax rates were also comparatively low, with the top band of income tax set at 70% and the highest corporation tax rate (for large businesses) sitting at 50%. Almost no one was opposed to this situation even though there had been plenty of debate over optimal tax rates in recent years. As you might expect, Thatcher belonged to the school of thought which advocated that they were currently too high. Under her leadership, the Conservative Party had come to endorse a more concerted switch to supply-side economics, inspired by recent experiments in Chile during President Freiâs second term in office, with balanced budgets supported by cuts to welfare and services that, in Thatcherâs view, only served to stifle innovation while propping up the lifestyles of scroungers and wastrels. Having put the overtly racist policies of the Powell years behind them, things like the cannabis cafĂ©s and associated tourism were a major focus of ire for the partyâs socially conservative supporters.
Inevitably, the Tories received a certain amount of support in the media for their position, notably from titles such as The Daily Mail and The Telegraph which were not owned by Empyrean. However, many tabloids and broadsheets castigated Thatcher for being overbearing, nannying, and controlling. She was regularly lampooned as being insanely delusional for tilting at windmills, and her dowdy twinset-and-pearls image was compared unfavourably against the rather glamorously fashionable Ellen Falconer, who often appeared to have stepped off the set of Charlieâs Angels. Meanwhile, the considerable threat her policies posed to treasured institutions such as the sovereign wealth fund, the NHS, the National Development Bank, and the Land Bank were unceasingly exposed.
Thanks to the work they had already done over the course of the 20th century, Thatcherâs Conservative Party represented a significantly reduced threat compared to MOT. It was now effectively impossible to privatise things like utilities and transport since they had already been mutualised, so the government didnât own them in the same way at all. Although a prospective government could sell off BNOC and/or exploit North Sea oil revenues in alternative ways, any suggestion of getting rid of the sovereign wealth fund was as much of a vote loser as running down the NHS.
Messing around with exchange rates for political purposes was also far more difficult: the external international exchange rate for the ECU was managed by the ECB in conjunction with the European Commission and the European Council. Meanwhile, Sterlingâs internal exchange rate with the ECU was a function of its balance of trade. You could pump money into the domestic economy or reduce the currency supply and alter the central bank lending rate, but you couldnât directly manipulate the foreign exchange rate to attract hot money, increase the value of Sterling on the international markets, and lower the cost of imports. Consequently, Thatcher was proposing to take the drastic step of exiting the European Monetary System. However, this was easily painted as extremist fanaticism in the media. The EMS had pretty much ended the need for Germany and Britain to intervene off their own bat to prop up the US dollar and brought comparative price stability to Europe within the context of the maelstrom wrought by the collapse of Bretton Woods.
Consequently, five years after Enoch Powell, the Conservative Party still looked like a bunch of people who appeared to be at best slightly batty and at worst dangerously oppressive extremists with no real experience of government, even if many voters were drawn to their rather twee tea-and-scones vision of Britain. By contrast, Labour appeared experienced, successful, statesmanlike, responsible, tolerant, and modern. Ellen Falconer had dealt with the Jeremy Thorpe scandal with ruthless efficiency and, if anything, the coalition between Labour and the Liberals had become stronger after David Steel became leader of the Liberal Party and Deputy Prime Minister.
Everybody knew going into the election in 1980 that it was almost certain that no single party would gain the outright majority required to form a government under the new STV system. Consequently, the Lib-Lab alliance was formalised, and their 1975 arrangement extended through non-compete agreements in numerous constituencies and campaigning on a joint programme. The Tories had almost no hope of winning. Ellen Falconer played a blinder on the campaign trail, something at which the variants were very old hands. Labour duly increased their vote share by almost 5%, winning back many working-class voters who had abandoned them in 1975 over the question of race and having a woman leader. The Liberals lost several seats they had gained from âsoft Toryâ constituencies, their share of the vote shrinking by around 4%, but it didnât matter. Together they had almost 60% of the popular vote, 349 of the 500 seats in the Commons, and an overall majority of around 50. Moreover, on many issues they could rely on votes from the 7 members for the SNP, Plaid Cymru, and the SDLP. Indeed, in the context of the reformed voting system, the victory was so comprehensive that Labour was almost able to govern alone, although Ellen Falconer dismissed such notions as belonging to old fashioned and outmoded concepts of the politics of conflict. Naturally, it still meant that they could dominate the coalition agenda behind the scenes.
Fuelled by the UKâs leading position in the emergent computer revolution and its ongoing strength in the automotive, aerospace, and consumer electronics industries, the British economy continued to grow at a steady pace throughout the 1980s. Strong investment in computerisation fed increased productivity which supported increasing exploitation of emerging âsecond worldâ markets.
Although it was somewhat closer, Thatcher lost again in 1985 and was subsequently ousted by the âwetsâ. Michael Heseltine then became leader of the Conservative Party as part of a move toward the centre designed to make an alliance with the Liberals feasible. Having secured a strong political and economic position for the UK, the variantsâ real major challenge in government was to create a continual impression of movement and progress to keep the various factions of the Labour movement on board and sustain their coalition with the Liberals.
This wasnât always easy, especially given that some of the tougher decisions needed to be made concerning the long-term plan for winding down the coal and steel industries in the UK. Having had a decade to adjust, there were several pit and plant closures in the early 80s which provoked bitter opposition from the trade unions and led to a wave of strike actions. In a similar manner, a great deal of heavy manufacturing was starting to be offshored where it was cheaper. Many on the left of the Labour Party especially were vehemently opposed to this process, but those among the party leadership argued that it was inevitable: you couldnât have well-paying jobs in low value-add industry. The country had to stick to its long-term industrial strategy. However, it did lead to a rise in structural unemployment and a significant increase in the cost of the welfare state in the short run.
A great deal of the impact of the oil crisis and the Nixon shock in the early 1970s had been absorbed and many potentially explosive situations in the Middle East defused. The economy of the UK and much of Western Europe had also gained institutions which provided a significant degree of shelter from external shock. Nevertheless, the global situation was far from being all sweetness and light. The threat of cost-push inflation remained ever present and, during the late 1970s and early 1980s, real interest rates rose to significant positive levels for almost the first time since the end of WW2. This contributed to the increasing difficulties being experienced in many industries in the UK and growing problems with unemployment which were further compounded by the rising cost of British exports within the ECU framework over time due to the strength of the domestic economy.
Nevertheless, these problems remained manageable. Overall growth was still being fuelled by the core concerns identified by national industrial strategy. During the 1980s, it would be further added to by a dramatic expansion in the financial sector.
Following the establishment of the ECB, London had rapidly augmented its status as a major global centre of finance as many European institutions relocated to the city. This process was accelerated during Ellen Falconerâs second term as Prime Minister which witnessed a series of major reforms to the London Stock Exchange. Nominally arising because of a restraint of trade action brought against them by the Office of Fair Trading, the exchange was fully computerised and opened up to foreign traders while its various arcane rules around commissions, brokers, and jobbers were simplified and made more transparent. The reforms also happened to coincide with the emergence of a range of new financial products, such as securities and derivatives. The result was a massive increase in trading activity and a stock market boom the likes of which had not been seen in the UK since the 19th century.
The Labour-Liberal coalition government established a Financial Services Authority to oversee the new regulatory framework that aimed to ensure market confidence, financial stability, and consumer protection. Unlike in MOT, strict rules remained in place to prevent speculation using consumer deposits and savings via the hard separation between commercial banks, investment banks, insurance companies, and pension funds or other similar institutions. Furthermore, many new rules were put in place around the form and structure of various emerging financial instruments, such as securities and credit default swaps, which could be a double-edged sword. Done right, such devices promised to bring greater security and confidence to the markets whereas, if abused for greed and profit, could lead to potentially fatal levels of exposure to risk.
In many respects, the reforms to the LSE were more than were being asked for by the business community within the UK at the time. They were very much in line with the Labour administrationâs industrial strategy which freely acknowledged the potential importance of the financial services sector to the domestic economy, especially after the creation of the ECB and the ECU. On the other hand, they were something that the variants knew that they would ultimately not be able to prevent from occurring at some point in time somewhere, even if it wasnât in the UK. Once again, it was their view that it was better than it happened first in a controlled manner within their sphere of influence. Even so, it opened a door and the regulatory framework they established would inevitably be eroded over time unless continual effort was expended at an international level to prevent this from occurring.
On the international stage, the variant crew were just about managing to keep a lid on various tensions and trends. Their ability to address concerns in this area were growing as their numbers increased and their overall position strengthened. Over the course of the 1970s, they had started to pay considerably more attention to the problem of the US.
Despite (and even sometimes because of) everything the variants had done to date, America was the global epicentre of a growing reactionary political backlash against the postwar social democratic consensus in the West. Just as had been the case in MOT, this had been developing since the 1950s and consisted of an unholy alliance between several often-disparate interest groups. In one corner, there were neoliberal Hayekians and Randians opposed to things like redistributive tax regimes and state intervention in or regulation of markets. Their tag team partners were right-wing Christian fundamentalists. Nominally committed to the promotion of socially conservative policies in reaction to the liberalism of the 1960s, they were in effect seeking to transform America into a theocracy based on evangelical Biblical literalism. In the context of the US, these strands of thought brewed into an even more toxic cocktail through its combination with anti-Federal âstatesâ rightsâ Confederate racism and libertarianism.
To try and counter some of these regressive trends, the team in America were pursuing a multi-pronged strategy that endeavoured both to foster and support opposition movements while simultaneously sowing discord among their enemy via a divide and conquer approach and denying the oxygen of publicity, or adopting an approach of litigious persecution where possible and appropriate.
Using their practically limitless supplies of cash, they promoted and sustained political candidates, grassroots campaign groups, and educational programmes at all levels in favour of causes such as social justice and the environment with one hand. Meanwhile, with the other, they helped to establish âconservativeâ political and religious groups, campaigns, and programmes that sought to corner the use of words such as âfreedomâ, âjusticeâ, and âmoralityâ within the context of theological and economic position that subtly undermined crude forms of intellectual phenomena such as social Darwinism and Biblical literalism through the promotion of alternate interpretations which were less fundamentally incompatible with a progressive democratic social order.
From the mid-1970s onwards, the teamâs early efforts in these areas were increasingly being bolstered by an expansion of Empyrean Publishing into the Americas. They began buying up or establishing local and national newspapers and television networks along with a few film studios and production companies over the course of a decade or so. Naturally, the variants didnât micromanage the editorial line in all these media channels which inevitably contained their share of imbeciles, charlatans, and rogues. However, as the Chomsky-Herman propaganda model argues, the combination of both their ownership and their importance as advertisers through their other ventures was more than sufficient to shape the culture and ideology of these outlets which tended on the whole to promote variant controlled groups as constituting both sides of any debate.
On top of this, there was the corporate culture that was spread through the teamâs extensive involvement in the worlds of education and business. The crew had their own answer to the Mont Pelerin Society and the World Economic Forum which, by virtue of the variantsâ accrued social and commercial prominence, generally eclipsed alternate forums in prestige and importance.
Last, but by no means least, there was the still emerging sphere of information technology and the internet. The team had an almost complete stranglehold on this area of development. In this timeline, the internet had been developed by ICL in conjunction with the British government in the mid to late 1960s using much the same justification as DARPA had done in MOT.
British Telecom had begun rolling out a general-purpose optical fibre network across the UK in the 1970s and the UK government under Ellen Falconer had opened up the network under state ownership to businesses in the country. The team redeployed their âLynx and chainsâ based network protocols as the data transmission method and British businesses had gained the option to receive a domain and network identity for nothing from the government. As the home computing revolution began to take off in the late 70s and early 80s, the coalition administration had extended this right to private citizens. Thus, although uptake was still fairly low, a precedent had been set for state management and control of the network, which had also begun to spread to the US and Europe, in which every commercial and private entity gained one and only one user identity and network home, much as one might have a passport or a registered business.
This shift in the underlying technology in conjunction with alternate ownership and control approaches completely altered both the nature and perception of the global network. It was regarded very much as a formal, authoritative, and public phenomenon with which one interacted either in a professional context or as an identified private citizen. This deterred its usage for malign purposes and made policing the network a straightforward matter. Although the control mechanisms were not guaranteed to always remain within the remit of responsible state authorities, with any luck the established culture which surrounded it would endure.
To varying degrees, all these phenomena coalesced along with others to create a global zeitgeist or milieu which, by the late 1970s, was quite different from MOT. This was true even in the United States where the variants had not yet been nearly so active, and which had experienced significant economic difficulties arising from the oil shock and the collapse of Bretton Woods.
Right-wing evangelicalism and neoliberalism had been considerably weakened by the presence of a Christian social justice movement which, while still socially conservative, was generally aligned with the âliberalâ wing of the Republican Party and promoted measures to alleviate poverty and discrimination. Among their most prominent opponents were a grouping of âleft wingâ Democrats who advocated many of the social democratic policies that had been implemented in Europe during the postwar period. Inevitably, extremists of various fascist, libertarian, and theocratic hues were still present, but they mainly existed on the fringes of the political debate that remained outside the Overton Window.
Ronald Reagan won the Republican nomination in the 1980 US Presidential election but was defeated, going down in history as the reincarnation of Barry Goldwater. Nevertheless, the election was a close contest with the incumbent President Carter, in part because the Southern religious vote was split, and the Boomer electorate had been moving to the right since Vietnam. Yet, with no Soviet invasion of Afghanistan, it was becoming a period of detente between Washington and Moscow, so there was little to incite the rabid anti-communists in America. Similarly, while there was civil war in Lebanon and the situation in the Middle East remained tense, there had been no Iranian hostage crisis and Carterâs standing as an international statesman had been boosted by the Camp David Accords.
With the election being fought primarily over the issue of the economy, Carter won ground through his proposals for an industrial and energy strategy which, mimicking that of the UK in many respects, aimed to focus on the automotive and aerospace industries along with the emergent technology sector. The variants had major, long-established ventures in all of these areas in the US. However, by no means did they have them to themselves and faced stiff competition from domestic concerns including big names from MOT such as IBM, Boeing, General Motors, and Ford. Nevertheless, their firms would inevitably benefit from the planned tax breaks, import tariffs, and federal government handouts.
Bob Dole would eventually win the US presidency for the Republicans in 1984 but it didnât make all that much difference to the overall situation from a macroeconomic perspective. Although he doled out some tax cuts for the rich and cut a lot of welfare programmes, the US economy had begun to recover from the turmoil of the 1970s and the Dole administration more or less continued the industrial and energy strategy that had been started by the second Carter administration. Perhaps the most significant act the new president implemented was to copy the recent stock exchange reforms that had been completed in London. In conjunction with similar moves in Japan and the rapid growth of the internet, this ushered in a new era of globalised capitalism. However, it would be rather different from that which had developed in MOT.
Shortly after Bob Dole entered the White House, detente with the USSR gave way to full on Glasnost and the Cold War began to draw to a close. China had also begun to implement a policy of âsocialism with Chinese characteristicsâ that sought to introduce a state delimited form of market economics that opened parts of the country to partnerships with foreign concerns.
Although the political situation between Israel, Lebanon, Jordan, Syria, and Iraq remained deeply problematic, the 1980s were a decade of increasing optimism in many places, especially in the West. It had started with the final collapse of the apartheid regime in South Africa after 11 years of sanctions, 4 of which had also been backed by the might of the USA, and ended with the collapse of the Eastern Bloc. In between, there had been a significant cooling in Cold War tensions that led to a series of multilateral agreements over nuclear reduction and non-proliferation.
There was no war in the Falklands. The British government had been in negotiations with their counterparts in Argentina since the start of the 1970s and the islands had been going through a process of normalisation of relations with the mainland ever since. Even after Galtieri came to power, the junta in Buenos Aires was under no illusions that the UK took the question of the sovereignty of the islands very seriously indeed. Under David Moore, the UK had constructed a small military base and a few research facilities around Stanley and Port Howard, mainly as a way of bolstering and supporting British claims in Antarctica. Nevertheless, in line with UN resolutions, they were prepared to cede the islands so long as that was what the residents themselves wanted. Which they didnât. Hence the attempts to normalise relations between them and Argentina. However, with the Royal Navy regularly in the region, there was no possibility of Galtieri being able to take advantage of British apathy toward the Falklands to score political points at home. Ironically, this meant that he lasted in power for longer than in MOT.
Similarly, having largely contained the political situation in Iran, there was no full-scale conflict with Iraq; although there was still some fairly tense and even occasionally violent competition between them for political and economic pre-eminence in the region. Instead, Saddam Hussein mainly took out his frustrations on Kuwait after their oil production policies began to harm the Iraqi economy. Iraq invaded the country in 1987 and were met in response by a large multinational force mainly consisting of American, British, and French troops acting under the auspices of the UN. Although the Iraqi invasion had been an egregious act of aggression, the ensuing Gulf War was one of the more cynical tactics the variants employed partly to win elections in the UK.
Meanwhile, the divergent situation across the Middle East as a whole and in Northern Ireland meant that terrorism was a much smaller problem, especially in the UK. Of course, problems associated with inequitable international development and the support of oppressive regimes by both superpowers leading to guerilla insurgencies had by no means disappeared. Second and Third World debt was also a major issue. However, the variants had endeavoured to use their position within the UK government as a leading force within a strong Western European bloc to apply international pressure through the UN and alleviate such issues so far as was possible within the pragmatic constraints on their exercise of power.
Environmental issues and the question of the climate crisis had begun to be taken seriously by the governments of many major powers, most of whom had at least begun to put in place some form of long-term decarbonisation strategy even if it only applied to the energy generation sector. Such moves were facilitated by the global spread of comparatively cheap, modular, thorium-based nuclear power solutions since the 1950s. There had been no Chernobyl disaster and electricity was increasingly abundant even in âsecond worldâ countries.
On the agricultural front, there had been some major advances since the 1970s which had significantly increased the global food supply. Inevitably, some of these had entailed horrifically destructive industrial methods that were wreaking havoc on the earthâs ecosystems and leading to massive deforestation in places like the Amazon. However, there had been a lot of alternative approaches that were far less damaging which were widely adopted. Research into techniques such as lab-grown meat were advancing rapidly while, in the context of international development, great strides had been made by the Fair Trade and organic farming movements. There had been a devastating famine in Ethiopia but, like most famines, the root cause was primarily political.
Through concerted coordinated action by several agencies, including private variant philanthropic concerns, the World Health Organisation, the UK Department for International Development, and the mutualised British Pharmaceutical Industries among others, a number of preventable diseases were eradicated worldwide over the course of the 1980s. By the end of the decade, great strides had also been made in the search for a cure for AIDS.
Much as it had done in MOT, the 1980s culminated in the dramatic collapse of the Eastern Bloc and the fall of the Berlin Wall due to Soviet reluctance to continue propping up puppet regimes in Eastern Europe. Having focused most of their efforts to date on the North Atlantic region, it was time for the team to switch at least some of their focus east and south. There was still a real danger that Western capitalism would enact a rape of Eastern Europe and the Soviet Union which held the potential to destabilise the global order. More cynically, the emerging markets in the former Communist bloc, China, India, South Africa, and Brazil presented an opportunity for them to perpetuate their hold over power in the UK by sustaining economic growth.
In the UK, the postwar boom had drawn to a definitive close during the 1980s as average growth dropped to between 2% and 2.5% per annum. The Labour-Liberal coalition government had managed to paper over this slow down through a combination of controlled deregulation of the markets and a similarly cautious relaxation on credit availability. The process of mutualisation had significantly reduced the role and importance of state expenditure within the economy which, combined with massive revenues from the sovereign wealth fund fuelled by North Sea oil and gas, meant the government was able to continue supporting a high level of provision of welfare and social services while simultaneously lowering the overall tax and regulatory burden in just enough ways to win votes.
However, there were problems on the horizon. Global consumption of oil was beginning to decline rapidly due to the implementation of energy decarbonisation plans by a few major world powers. This combined with a significant increase in output by most oil producing states to exploit their resources to their fullest extent during the implementation phase of these plans which drove down the price of oil. Although it remained above the break-even point for Brent Crude, attempts at price fixing largely failed.
Along with the rapid emergence of the IT industry and an expansion of the financial sector, it was this reversal of the oil shock of the 1970s that had been largely responsible for the recovery of the US economy and a manufacturing and consumer boom in several countries during the 1980s. However, it also hit a few oil-dependent economies, such as Venezuela, exceptionally hard, triggering sovereign debt crises in several cases. While the UK was comparatively unscathed by these events due to its economic strengths in other areas, it did hit sovereign wealth income. Fortunately, even without the money from oil and gas, it was still growing at a double-digit rate through its investments elsewhere. Nevertheless, a sustained depreciation in the value of fossil fuels held the potential to damage the UK economy and it was imperative that coordinated global action be taken to better manage the decarbonisation process.
On top of this, there was the developing situation within the EEC to concern the team. By intent, the introduction of the ECU and the European Monetary System had not generally favoured the economies of Britain, France, and Germany. It had been designed to promote equitable levels of development between EU member states and yield a balance of trade equilibrium between them over time. In this goal, it had been successful, despite inevitable attempts by the leading industrial powers within the community, including the UK, to game the system in their favour. On the whole though, it had led to significant direct investment in Greece and, following their accession to the union in 1981, Spain and Portugal. Economically, the EEC member states were far more homogeneous than they would otherwise have been, and this had facilitated further alignment in other policy areas.
Overall, the global situation was massively improved from that in MOT. Nevertheless, there were clearly significant tensions and conflicts that were developing. These had mostly been created by the variants themselves, since by intervening they merely reconfigured the sites and nature of political and economic competition for resources that was inscribed within the Western liberal model of nation state capitalism they had inherited from the Enlightenment. These further interacted with latent psychosocial trends that emerged in the wake of the two World Wars of the 20th century, albeit in a somewhat adjusted manner.
The boomer generation, raised in this timeline on the emergence of information technology and other associated divergent phenomena, were mostly in favour of individual liberty and self-determination, at least in the West. As an electorate, this made them highly susceptible to neoliberal and libertarian arguments, despite everything the variants had done and were continuing to do. Obviously, they didnât all understand the intricacies of economics so, despite being generally convinced by the benefits of the postwar settlement, few fully appreciated the Faustian pact the variants had made between finance and oil. To compound matters, the team had effectively destroyed many of their own arguments against the socially and environmentally exploitative and destructive practices of neoliberal capitalism by sustaining the hegemony of the social democratic order. This was contributing to a growing trend toward support for deregulation and lower taxes that were almost impossible to suppress despite the crewâs significant influence within media and intellectual circles.
