by John Gray
It is a belief that has been defended in many theories of modernization, but it is instructive to recall the many incompatible forms this ultimate convergence has been expected to take. Marx was certain it would end in communism, Herbert Spencer and F. A. Hayek that its terminus would be the global free market, Auguste Comte was for universal technocracy and Francis Fukuyama ‘global democratic capitalism’. None of these end-points was reached, but that has not dented the certainty that some version of western institutions will eventually be accepted everywhere – indeed, with every historical refutation it is more adamantly asserted. The communist collapse was a decisive falsification of historical teleology, but it was followed by another version of the same belief that history is moving towards a species-wide civilization. Similarly, disaster in Iraq has only buttressed the conviction that the world faces a generational ‘Long War’ to defeat terrorism and establish western government everywhere. History continues to be seen as a process with a built-in goal.
Theories of modernization are not scientific hypotheses but theo-dicies – narratives of providence and redemption – presented in the jargon of social science. The beliefs that dominated the last two decades were residues of the faith in providence that supported classical political economy. Detached from religion and at the same time purged of the doubts that haunted its classical exponents, the belief in the market as a divine ordinance became a secular ideology of universal progress that in the late twentieth century was embraced by international institutions.
The conviction that humanity was entering a new era did not begin in the upper reaches of world politics. As damagingly utopian as any earlier grand design for humanity, this late twentieth-century faith in a global free market was born more humbly, in the struggle to replace the failing post-war settlement in Britain.
MARGARET THATCHER AND THE DEATH OF CONSERVATISM
The end of history? The beginning of nonsense!
Margaret Thatcher on Francis Fukuyama2
Margaret Thatcher did not start as a revolutionary, and there was little that was utopian in the cast of mind she brought to her first government. ‘Thatcherism’ is a term coined by the Left that gives her policies an ideological flavour they did not always possess. Her early programme was a demanding yet realistic agenda whose most important requirements she implemented. Judged in terms of her original aims, Thatcher was a successful reforming prime minister – one of several in a long British tradition. She began as a leader like de Gaulle, focusing on national issues. By the time she was toppled she had come to see the policies she had implemented in Britain as a model for a global programme.
Thatcher became a neo-liberal only towards the end of the 1980s, but the origins of the neo-liberal period in Britain were in the economic crisis of the seventies. Neo-liberalism refers to a body of thought that claims to return to liberal values in their original form – which, neo-liberals believe, requires strictly limited government and an unfettered free market. Despite its claim to scientific rationality, neo-liberalism is rooted in a teleological interpretation of history as a process with a preordained destination, and in this as in other respects it has a close affinity with Marxism. Just as Marxists underestimate the importance of historical accidents in the establishment of the communist regime in Russia, neo-liberals overlook the role of chance in the rise of Margaret Thatcher.
Thatcher became leader of the Conservative party at a time when the post-war settlement in Britain was ceasing to be viable. Her central task was to dismantle it and set up a new framework for the British economy. Labour governments had tried to do this and failed. Thatcher succeeded because she approached the job with a winning mix of ruthlessness and caution. The result was a far-reaching change in British life that created a society different from any she envisioned or desired.
It is a truism of politics that policies often have consequences different from those that are expected. In Thatcher’s case the discrepancy was exceptional. She was bent on destroying socialism in Britain, so that – in the words of a crass slogan that circulated among the rightwing think tanks in the eighties – ‘Labour will never rule again’. Instead she brought the Conservative party to the brink of collapse and destroyed conservatism as a political project in Britain. As she thrust market forces into every corner of British life with the aim of ‘rolling back the frontiers of the state’, the state grew ever stronger. Just as constructing the free market in early Victorian England required a large-scale exercise of state power, so did restoring a partial version of it towards the end of the twentieth century. Victorian laissez-faire was engineered by a series of parliamentary acts that enclosed what had up to that time been common land, creating private property where none had existed before – a process that involved mass coercion. It was a change that could only be brought about by highly centralized government, and the same was true of Thatcher’s programme. The unavoidable result of attempting to reinvent the free market was a highly invasive state.3
The price of Thatcher’s success was a society in many ways the opposite of the one she wanted. Her goal of unshackling the free market was achievable, and to a measurable degree it was realized; but her belief that she could free up the market while shrinking the state was utopian, and so was her aim of reinstating bourgeois values. Utopia is a projection into the future of a model of society that cannot be realized, but it need not be a society that has never existed. It may be a society that once did exist – if not in exactly the form in which it is fondly remembered – but which history has since passed by. In a television interview in January 1983 Thatcher declared her admiration for Victorian values and her belief that they could be revived. Actually, the country of Thatcher’s nostalgic dreams was more like the Britain of the fifties, but the idea that unleashing market forces could re-create this lost idyll was strikingly paradoxical. The conservative Britain of the fifties was a by-product of Labour collectivism. Thatcher tore up the foundations of the country to which she dreamt of returning. Already semi-defunct when she came to power in 1979, it had vanished from memory when she left in 1990. In attempting to restore the past she erased its last traces.
Thatcher propagated an individualist ethos of personal responsibility, but in the type of society that is needed to service the free market old-fashioned virtues of saving and planning for the future are no longer profitable. A makeshift lifestyle is well suited to the incessant mobility of latter-day capitalism. Chronic debt has proved to be a mark of prudence, and a readiness to gamble is more useful than diligent application to the job in hand. Though an earlier generation of social theorists anticipated that as capitalism developed it would foster embourgeoisement – the spread of a middle-class ethos throughout society – it has done the opposite. Most of the population belong in a new proletariat, with high levels of income but nothing resembling a long-term career. The deliquescence of bourgeois society has come about not through the abolition of capitalism but as a result of capitalism operating without restraint.
Neo-liberals see the advance of the free market as an unstoppable historical process, which no human agency promoted and none can prevent. Yet it was Thatcher who advanced it in Britain and it is only in retrospect that her rise to power looks inevitable. The accidental quality of her ascendancy can be seen in the people and events, many now forgotten, that made it possible. If Tory prime minister Edward Heath had not called a general election on the issue of who governed the country and in so doing lost the support of much of his party; if the party chairman and old-style grandee Willie Whitelaw had not been loyal to Heath and refused to stand as leader; if the volatile member of parliament and rightwing ideologue Keith Joseph had not given a public lecture in which he seemed to favour eugenic policies aimed at discouraging the poor from having children and thereby disqualified himself from standing for leadership of the party; if former party chairman Edward du Cann had not abruptly withdrawn from the leadership race; if Thatcher’s campaign for the leadership had not been skilfully orchestrated by Air
ey Neave, the MP, wartime escaper and connoisseur of special operations who was later assassinated by the IRA – if any of these circumstances had been different Thatcher would very likely not have become leader of the Conservative party. Again, if the Labour prime minister James Callaghan had not delayed calling a general election until 1979 when the government was deeply unpopular, or if Thatcher had not been advised on public relations by the advertising firm led by Charles and Maurice Saatchi, which produced the killer campaign slogan ‘Labour isn’t working’ –then she might well not have become prime minister.
Thatcher’s coming to power turned on the fall of a leaf. Once in office her agenda was imposed by history. British politics was shaped by memories of industrial conflict and government defeat. The three-day week, which prime minister Edward Heath introduced in response to industrial unrest in December 1973, the miners’ strike that ejected him from power in the spring of 1974, the winter of discontent that paralysed the Labour administration in 1978–9, when refuse disposal, petrol supplies and for a time the burial of corpses were disrupted by strike action – these events, symbolic at once of national decline and the chronic weakness of government, shaped Thatcher’s political outlook and her initial policies more than any ideology.
The agenda of Thatcher’s first government contained few of the policies that later became neo-liberal orthodoxy. The general election manifesto of April 1979 did not mention privatization, a term that came into use only in the eighties. One state-owned corporation (the National Freight Company) was earmarked for selling off and a commitment made to start selling off council houses, but there was no talk of bringing market mechanisms into public services. There was a promise to end the closed shop and restrict industrial picketing, but this went with a commitment to consult the trade unions on public-sector pay claims. Remarkably in view of Thatcher’s later policies, the German system of wage-determination was singled out for praise. Looked at from the perspective of Thatcher’s reputation for scorning consensus this was an incongruously moderate document. Yet the effect of Thatcher’s early policies was to bury the post-war settlement and with it British social democracy.
A major influence in shaping Thatcher’s early agenda was Sir John Hoskyns, a businessman who by 1978 had become the chief strategist in her private office. In the autumn of 1977 Hoskyns presented Thatcher with a paper, ‘Stepping Stones’, which set the objectives with which she came to power.4 The paper was a diagnosis of the forces underlying the current British malaise and recommended curbing union power, controlling inflation and securing balanced budgets. An archetypal early Thatcherite, Hoskyns displayed the characteristics of that breed, well summarized by Hugo Young: ‘a fierce pessimism about the past, millennialist optimism about the future and a belief in the business imperative as the sole agent of economic recovery’.5 These attitudes marked Thatcher off from the other leading politicians of her party and the rest of the British political class at that time. From the start she displayed some of the qualities of a missionary; but in the early days she did not aim to save the world, only Britain.
Post-war policy in Britain was based on the belief that steady economic growth could be promoted by a combination of deficit financing and lax monetary policy. Whether John Maynard Keynes would have endorsed the mix may be open to question, but a generation of politicians, civil servants and academic economists viewed this ‘Keynesian’ combination as an infallible recipe for economic growth. Yet by the 1970s growth was faltering and unemployment and inflation were rising, while industry was locked into a series of destructive wage disputes. On the wilder fringes of the Right there was talk of something like a communist state coming to power. There was never any danger of this happening – the risk in the seventies was Britain would become a country more like Argentina than anywhere in the Soviet bloc. Still, the crisis was real. The old ways had stopped working.
Margaret Thatcher was not the first leading British politician to accept that the post-war settlement was no longer viable. It was Denis Healey, the Chancellor of the Exchequer in James Callaghan’s Labour government, who thrust this fact into the centre of British politics. Throughout the mid-seventies Healey tried to persuade his party that the post-war settlement no longer worked, but Labour’s strong links with the trade unions and the opposition of much of its membership thwarted the shift in policy Healey wanted. Thatcher also faced entrenched opposition. Her overriding priority was to alter the system of collective wage bargaining that governed much of British industry. This meant a showdown with the trade unions, and after the miners’ strike of 1984–5 their power was broken. British corporatism – the triumvirate of government, trade unions and employers that had managed the economy since the Second World War – ceased to exist. Henceforth the economy would grow within a new framework that ensured low inflation and a flexible labour market. The social costs of putting this framework in place were high, involving a period in which unemployment rose steeply and a long-term increase in economic inequality, but in political terms it was a resounding success. Thatcher’s vision of the kind of government and society that would come about when something like the free market had been reinvented was chimerical and utopian; but the deregulation of market forces she engineered formed the basis of a new settlement that was sufficiently productive to be generally accepted, and is likely to remain in force until history renders it irrelevant.6
Thatcher’s successful challenge to the British consensus did not satisfy her ambitions. Like de Gaulle she had come to see herself as embodying the nation. Unlike the General, she launched a wide-ranging assault on national institutions. She regarded local government with particular scorn, and prompted by the rightwing think tanks she adopted the ‘poll tax’, a flat-rate local levy that was deeply unpopular. The poll tax sowed deep doubts about Thatcher’s leadership in her own party and among the public, but her hostility to Europe may have been a more significant factor in the coup that brought about her downfall in 1990. It was the irrational extremity of her European policy that led Geoffrey Howe to resign as deputy prime minister and triggered a leadership challenge from Michael Heseltine. It was hostility to Heseltine’s pro-European stance that led the Thatcherite wing of the party to mount the all-out effort to prevent him succeeding as leader, which resulted in the election of John Major. It was Major’s attempt to mend relations with Europe that led to his joining the European Exchange Rate Mechanism at the wrong rate –a decision that rebounded when sterling was ejected from the mechanism on ‘Black Wednesday’ in September 1992. Major’s government never recovered, civil war broke out among Conservatives on Europe, and the Conservative party became an ungovernable rabble.
Thatcher’s successors struggled for nearly a decade to understand what made their party unelectable. Clearly a number of decisions and events had contributed to this result, including the coup that toppled Thatcher in 1990. But Conservative unpopularity had deeper causes, and it was only when David Cameron became leader that the party was forced to accept that the obstacle to electoral success was conservatism itself. Post-Thatcher Britain is a less cohesive society than the one she inherited, but it is also more tolerant – unbothered about ‘family values’, no longer pervasively homophobic, less deeply racist and (though markedly more unequal) not so fixated on issues of class. While he relegated Thatcher to the history books Cameron accepted the society she had, contrary to her intentions, helped create. By burying Thatcher while embracing post-Thatcher Britain he made his party once again a contender for power.
Though it was an episode in the microcosm of British politics, the destruction of conservatism that resulted from Thatcherite policies was part of a larger trend. The application of neo-liberal ideas has provoked a backlash in many countries. In post-communist Poland and Hungary the triumph of the New Right has been followed by a resurgence of the Old Right, which while attacking the excesses of the free market has revived some of the worst features of the past. Integral cultural nationalism and the old poison of anti-Semitism have
returned in much of post-communist Europe. In western Europe the far Right has undertaken a process of modernization as a result of which it has become a key player in democratic politics. Few European far-Right parties any longer hold to an interwar agenda of protectionism. In northern Italy and Switzerland they promote a high-tech economy linked with the rest of the world by global free trade but insulated from the world’s disorders by a ban on immigration. By fastening on immigration the far Right has been able to tap into the discontent of the casualties of globalization in rich countries –unskilled workers and middle managers whose work can be done more cheaply in emerging economies. By identifying itself with these groups the radical Right has been able to shape the political agenda in many countries, even where – as in France and Austria – it has declined in electoral terms. In countries with no tradition of far-Right politics new types of populism have developed. In Holland the ex-Marxist politician Pim Fortuyn, who was assassinated by a crazed animal rights activist, embodied a combination of libertarianism on issues of personal morality with xenophobic hostility to immigrants (particularly Muslims). In America the Right has splintered between neo-conservative ideologues and paleo-conservative nativists. The common factor in these disparate currents is that conservatism has ceased to be a coherent political project. The links it requires with the past have been severed. Any attempt to revive them can only be atavistic, and when conservative parties resist the temptation of reaction they become vehicles for a progressive agenda that easily degenerates into utopianism.
