government’ and the dead hand of taxation and planning that it placed upon national energies and initiative. In many places this rhetorical strategy was quite seductive to younger voters with no first-hand experience of the baneful consequences of such views the last time they had gained intellectual ascendancy, half a century before. But only in Britain were the political disciples of Hayek and Friedman able to seize control of public policy and wreak a radical transformation in the country’s political culture.
It is more than a little ironic that this should have happened in Britain of all places, for the economy of the UK, though intensively regulated, was perhaps the least ‘planned’ of any in Europe. There was constant government manipulation of price mechanisms and fiscal ‘signals’; but the only ideologically-driven aspect of British economic life were the nationalizations first introduced by the Labour government after 1945. And even though the case for ‘state ownership of the means of production, distribution and exchange’ (Clause IV of the Labour Party’s 1918 constitution) had been retained as Party policy, few of Labour’s leaders paid it more than lip service, if that.
The core of Britain’s welfare state lay not in economic ‘collectivism’ but in the country’s universalized social institutions, anchored firmly in the early twentieth-century reformism of Keynes’s liberal contemporaries. What mattered to most British voters of Left and Right alike was not economic planning or state ownership but free medicine, free public education and subsidized public transport. These facilities were not very good—the cost of running a welfare state in Britain was actually lower than elsewhere, thanks to under-funded services, inadequate public pensions and poor housing provision—but they were widely perceived as an entitlement. However intensely such social goods were condemned by neo-liberal critics as inefficient and under-performing, they remained politically untouchable.
The modern Conservative Party, from Winston Churchill to Edward Heath, had embraced Britain’s ‘social contract’ almost as enthusiastically as the Keynesian ‘socialists’ of Labour and for many years had kept its feet firmly planted in the middle ground (it was Churchill, after all, who remarked back in March 1943 that ‘there is no finer investment for any community than putting milk into babies’). When, in 1970, Edward Heath brought a group of free-marketers together at Selsdon Park near London, to discuss economic strategies for a future Conservative government, his brief and decidedly ambivalent flirtation with their rather moderate proposals brought down upon him a thunderstorm of derisory condemnation. Accused of seeking to return to the Neanderthal primitivism of the economic jungle, ‘Selsdon Man’ beat a hasty retreat.
If the British political consensus collapsed in the ensuing decade it was not because of ideological confrontation but as a consequence of the continuing failure of governments of
They failed. The Labour Party was unable to impose industrial order because its paymasters in the industrial unions preferred nineteenth-century style confrontations on the shop floor—which they stood a good chance of winning—to negotiated contracts signed in Downing Street that would bind their hands for years ahead. The Conservatives, notably Edward Heath’s government of 1970-1974, had even less success, largely thanks to the well-founded, historically-engrained suspicion in certain sectors of the British working class—the coalminers above all—of any compromise with Tory ministries. Thus when Heath suggested closing a number of uneconomic coal mines in 1973, and tried to impose legal constraints on the power of trade unions to initiate labour disputes (something the Labour Party had first proposed, then abandoned, a few years before) his government was stymied by a wave of strikes. When he called an election to decide, as he put it, ‘who runs the country’, he narrowly lost to Harold Wilson, who prudently declined to take up the cudgels himself.
Only under the Labour government of Wilson’s successor, James Callaghan, from 1976 to 1979, did a new policy begin to emerge. Driven by desperation and the conditions of an IMF loan, Callaghan and his Chancellor of the Exchequer (the redoubtable Denis Healey) initiated a retreat from the central nostrums of post-war government practice. They embarked on a restructuring program that acknowledged the inevitability of a certain level of unemployment; reduced social transfer payments and labour costs by protecting skilled workers while permitting the emergence of a disfavored periphery of unprotected, non-unionized part-time employees; and set out to control and reduce inflation and government spending even at the price of economic hardship and slower growth.
None of these objectives was openly avowed. The Labour government maintained to the end that it was adhering to its core values and defending the institutions of the welfare state even as it inaugurated a cautiously planned breakout, seeking to achieve by stealth the sorts of reforms that its predecessors had been unable to legislate in the open. The strategy did not work: Labour succeeded only in alienating its own supporters without being able to take any credit for its achievements. By August 1977, thanks in part to the Labour government’s deep cuts in public spending, UK unemployment levels had passed 1.6 million and kept on rising. The following year, in Britain’s ‘Winter of Discontent’ of 1978/79, major trade unions undertook a series of angry, concerted strikes against their ‘own’ government: rubbish went uncollected, the dead were left unburied.[250]
The Prime Minister, James Callaghan, seemed out of touch: in reply to a journalist’s question about the growing industrial unrest, he airily announced that there was no need for concern, thereby giving rise to a famous newspaper headline—‘Crisis? What Crisis?’—that helped lose him the general election he was forced to hold the following spring. It is more than a little ironic that Labour was constrained to fight the historic election of 1979 on the claim that it had
Margaret Thatcher was not, on the face of it, a likely candidate for the revolutionary role she was to perform. Born in Grantham, a sleepy, provincial town in Lincolnshire, she was the daughter of an earnest Methodist couple who ran a grocer’s shop. She was always a Conservative: her father sat on the local town council as a Conservative; the young Margaret Roberts (as she then was) won a scholarship to Oxford—where she studied chemistry—and rose to be President of the University’s Conservative Society. In 1950, at the age of 25, she was an (unsuccessful) Conservative candidate in the General Elections, the youngest woman candidate in the country. A chemist and subsequently a tax lawyer by profession, she first entered Parliament in 1959, winning a seat in the solidly conservative borough of Finchley which she would continue to represent until she entered the House of Lords in 1992.
Until she successfully beat off much more senior Conservative figures to win her party’s leadership in 1975, Margaret Thatcher was best known in Britain as the Education Minister in Heath’s Conservative government who, in order to meet budget-cutting targets, abolished the provision of free milk in British schools: a decision (taken reluctantly) that led to the sobriquet ‘Maggie Thatcher Milk Snatcher’ and gave the first hint of her future trajectory. Yet this decidedly unfavorable public image proved no impediment to Mrs. Thatcher’s advance—her willingness to court and confront unpopularity not only did her no harm among colleagues, but may even have been part of her appeal.
And she unquestionably had appeal. Indeed, a surprisingly broad range of hard-bitten statesmen in Europe and the United States confessed, albeit off the record, to finding Mrs. Thatcher rather sexy. Francois Mitterrand, who knew something about such things, once described her as having ‘the eyes of Caligula but the mouth of Marilyn Monroe.’ She could bully and browbeat with less mercy than any British politician since Churchill, but she also seduced. From 1979 to 1990 Margaret Thatcher bullied, browbeat—and seduced—the British electorate into a political revolution.
‘Thatcherism’ stood for various things: reduced taxes, the free market, free enterprise, privatization of industries and services, ‘Victorian values’, patriotism, ‘the individual’. Some of these—the economic policies—were an extension of proposals already circulating in Conservative and Labour circles alike. Others, notably the ‘moral’ themes, were more popular among Conservative Party stalwarts in rural constituencies than with the electorate at large. But they came in the wake of a backlash against the libertarianism of the Sixties and appealed to many of Mrs. Thatcher’s admirers in the working- and lower-middle classes: men and women who had never really been comfortable in the company of the progressive intelligentsia that dominated public affairs in these years.
