Does Thatcherism mark a radical break in British Politics?

Jock Coats

[I was extremely frustrated by this coursework essay in the end. There is just so much one could say on this subject and distilling it down into 2000 words does it no justice. But I hope the tactic of reducing it to one core idea that proves the whole, however much more that is, to be radical works!]

There can be few political figures or concepts that provoke such visceral and opposing reactions amongst political friends and foes as Margaret Thatcher and “Thatcherism”. Clearly Thatcher’s period in power was sufficiently remarkable to have sparked such intense feelings, but what do we understand by “Thatcherism” and in what ways might it represent a “radical break in British politics”?

This paper develops a narrow definition of “Thatcherism” that can be compared with other, distinct, recent British political periods to judge whether and how much of a radical break it actually represents. I set Thatcher’s rise to power, her policies and programme in office, and the legacy so far of her more than a decade as Prime Minister, in historical, economic and political context. I conclude that though much of what we often think of as Thatcherism is arguably more evolutionary than revolutionary, key aspects can be regarded as radical and far reaching, particularly in respect of a so far lasting revolution in the understanding of the means of distribution of economic welfare in society.

Let us first then try and discover what characteristics might define “Thatcherism”. This is no trivial task: political concepts can be defined in many different and contested ways, depending, amongst other things, on whether it is a sympathetic or opposing definition, whether it focuses on stated aims or on successes, failures and legacy with the benefit of hindsight.

Fortunately Michael Freeden offers a method to distil what he calls “ineliminable features of political concepts” (Freeden 1996). A feature or component is ineliminable if, first, “its absence would deprive the concept of intelligibility and communicability,” and second, “the concept cannot be reduced to its ineliminable component” (p. 62). We are looking, therefore, for components commonly associated with Thatcherism, without which it just wouldn’t be Thatcherism, but which aren’t the sum total of Thatcherism itself.

To choose a somewhat frivolous example, consider a handbag as a candidate for an ineliminable “component” of the political “concept” Thatcherism (Morris 2012). We may think that Thatcherism without a handbag is an absurd idea, but we also know that a handbag is not all that defines Thatcherism. Whilst this is a considerable simplification of Freeden’s broader thesis about defining political ideologies, looking for these ineliminable aspects of Thatcherism should give us a working definition to compare with other political periods and concepts.

What then are some of our candidates for the ineliminable components of Thatcherism? Whilst the precise genesis of the term “Thatcherism” is unclear, it was already being used in Cabinet Office papers in 1977, characterized as an “appeal to materialism and individualism” with policies in favour of individual freedom, enterprise and home ownership (Cabinet Office 1977: p. 3).

Stuart Hall, in what can plausibly claim to be the first systematic analysis of Thatcherism as a concept, says that it is more than merely an extension of other variants of the Tory “philosophy” albeit adapted to support capitalism through a particularly difficult period. He writes that it is part of a widespread “swing to the Right” (Hall 1979: p. 14) in which Thatcher is determined to take on even the “‘creeping socialism’ and apologetic ‘state collectivism’ of the Heath wing” (p. 15). It is the final triumph, in politics and academia, of Monetarism and the ideas of Milton Friedman and Friedrich von Hayek, popularizing their dry economic theory by appealing to “competition and personal responsibility for effort and reward, the image of the over-taxed individual, enervated by welfare coddling, his initiative sapped by handouts by the state” (p. 17). It represents an “assault…on the very foundation and raison d’etre of organized Labour” (p. 17).

David Marquand notes “four insistent themes dominated the Thatcher era”. First came promotion of free markets, sound money, breaking the grip of the unions and the “partial collectivism” of both Tory and Labour post-war governments. Second, she was determined to restore national self-confidence. The third was to stamp out “dependency culture” and beat the malign influence of the professional and administrative class. From her viewpoint from the entrepreneurial and industrious middle-class, she believed these were just as much closed shop special interests at the heart of the state responsible for “the long descent into welfarism and collectivism”. And, overarching all this, building a “new and victorious social coalition based on upward mobility, widening property ownership…and a powerful rhetoric of individual success and clamant nationalism” (Marquand 2008: p. 283-4).

In the New Statesman Sophie Elmhirst summed up the common themes of Thatcherism as “[s]mall state, free markets, deregulation, privatisation, tax cuts, union-breaking: that’s Thatcherism told simply, an 11-year premiership condensed into a concept” (Elmhirst 2010, p. 57). But how do all these compare with previous parties’ and governments’ policies and performance? Do they amount to new and radical ideas unique to Thatcherism? Or did Thatcherism simply extend and intensify existing themes and, in some cases, succeed where earlier attempts had failed?

When comparing governments’ and political parties’ programmes we must remember, however, that, since at each election each party must necessarily base its manifesto on contemporary circumstances, rather than on a blank slate, it is often the rhetoric rather than real policy that differentiates one from another. It is more about the emphasis placed on each of a narrow range of possible policy options to fit a particular set of circumstances and shift public opinion than about brand new thinking which can take a generation to become acceptable to the mainstream.

We find this, for instance, with the link between Thatcher and Austrian Economist and Nobel Memorial Prize laureate Friedrich von Hayek. Although Hayek never described himself as a conservative (Hayek 2006: p. 343), he made a strong impression on them very early in his writing. In the run up to the 1945 General Election the party printed an abridged edition of The Road to Serfdom as election material (Shearmur 2006: p. 310). Conservative party manifestos from 1950 to the 1979 election were no strangers to Hayekian influence. Shadow cabinet discussions at the Selsdon Park Hotel in 1970 that fed into the Tory manifesto of that year, were distinctly small state, pro-economic freedoms. The difference between Heath and Thatcher in this respect is less one of substance and more of success. Thatcher herself wrote, in The Downing Street Years, that she “joined with Ted Heath in a rethinking of party policy which seemed to foreshadow much of what we later came to call Thatcherism” (Ivan 2000). We don’t remember Heath as a Hayekian Prime Minister because he got bogged down in successive industrial crises and effectively abandoned that Selsdon manifesto. We remember Thatcher for at least trying to see it, or rather her interpretation of it, through, and for publicly acknowledging the influence of Hayek himself.

Similarly with Monetarism, the Thatcher programme was the first to place “true” Monetarist economic ideas at its heart (Joseph 1976), to publicly acknowledge the influence of Monetarism’s then biggest champion, Milton Friedman, even to the extent of using a Party Election Broadcast to try to explain it (Tory! Tory! Tory! 2007). But the influence of Monetarism was far from new. MacMillan’s Chancellor, Peter Thorneycroft, and Enoch Powell, both of whom were to become strong supporters of and influences on Thatcherism, were regarded as early Monetarists when they resigned in 1958, the year before Thatcher first entered parliament (Morgan 2001: p. 174). And whilst arguably Denis Healey, when he went to the IMF and made Monetarist reductions in state spending and increased interest rates to tighten money supply, could be said to have been acting on IMF orders, the UK was and remains one of the most influential members of the IMF and was part of formulating its Monetarist policy.

Here though, what sets Thatcherism out as avowedly Monetarist may be more a case of running out of options than deliberate political positioning. For a decade it had been steadily becoming apparent that Keynesian full employment policies were having less and less effect. What economists call the “Phillips Curve,” a Keynesian theory of the relationship between inflation and unemployment, had broken down with the so called “stagflation” of the 1970s and, in a sense, Monetarism was the next idea to try. In an era of 20% and above inflation, controlling prices was an easily communicated policy. We still often categorise Thatcherism as solidly Monetarist but in fact the core idea, of strict control of the money supply, was quietly abandoned before the end of her first term in office as unworkable.

Attempts to curb the influence of trades unions were also nothing new. Labour had become haunted by Barbara Castle’s attempt outlined in a White Paper known as “In Place of Strife” (Dept Employment 1969). The 1970 Tory manifesto also spoke of legislation to regulate the unions (Conservative Party 1970). Both failed to implement their controls.

Thatcherism’s approach was something new though. During the Callaghan government Keith Joseph’s Centre for Policy Studies had been modelling the British political and economic landscape searching for bottle-necks and obstacles, and the unions, or at least the more militant Marxist oriented union leaders, were calling for “civil war” against an incoming Conservative government that saw them as one of those key obstacles. Thatcherism saw these fringe leaders as a clear danger, real socialists who would stop at nothing to achieve a wholly collectivist economy. As exemplified by Arthur Scargill’s attitude to proposed coal mine closures, they regarded public ownership and unionised labour as the primary way to full employment and the economic welfare of the working class. No loss should be too great, no coal go unmined whatever the economic costs, so long as it gave working men meaningful employment and a stake in the economy (Marquand 2008: p. 297). Thatcher, in contrast, saw that rapid globalisation was making key traditional industries uncompetitive, and that in a post-Fordist service based economy, the distribution of economic welfare would depend on widespread ownership of productive assets as much as through industry and labour and full employment.

I contend that this key realisation is what marks out Thatcherism as a radical break. If there did exist a “post-war consensus” it was less a party political one as a tacit agreement on the economic system under which any government had to operate. That “Keynesian” consensus was that full employment was the way to ensure a just distribution of economic welfare. For quarter of a century, to use a phrase now mostly associated with Thatcher herself, “there was no alternative.” It was this economic system that was becoming ever less stable in the 1970s and traditional prescriptions less effective. Her policies of council house sales, of privatisation through mass public share offerings, of promoting entrepreneurship and of beating the unions can all be seen as implementing part of this fundamental switch from post-war Keynesian consensus to neo-Liberal free market economics. It was an attempt to make us a nation of owners of assets with the security and freedom they argued that brought to the many and not just to the privileged few (Ridley et al 1998).

This is, of course, an extremely reductionist definition of Thatcherism. Were there space, one could certainly explore aspects of gender politics and the lasting legacy of Europe’s first female head of government. Interesting too are debates about the legacy of Thatcherism on the Labour party and movement. We could also investigate issues of governing style where her hands-on centralising tendencies are credited with hastening a more presidential style of government in the UK, or of the impact of Thatcher and Thatcherism internationally. But whether it was “Thatcherism by design”, or, as Charles Powell, Thatcher’s Private Secretary for most of her time at Number 10 puts it, “only a label stuck onto a track record, it was not a philosophy” (Berlinksi 2007: loc. 51) that enables us to associate “Thatcherism” with this epochal switch in the dominant economic paradigm at home and globally, it can fairly be said, on this one aspect alone, to mark a radical break in British, as much as international, political economy that has so far largely gone unchanged.


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