Thatcher's lessons for social democrats

Thatcher utilised three emergent themes: globalisation, social liberalism and the reconfiguration of class structure. She used the spirits of the age to drive her own key project - unfettered markets. There is plenty the left could learn here.

Nick Pearce
12 April 2013

The term ‘Thatcherism’ was first coined by Stuart Hall in his seminal 1979 essay, ‘The Great Moving Right Show’. At that time, it was the Eurocommunist intellectuals grouped around the magazine Marxism Today – Hall, Eric Hobsbawm and kindred spirits like Andrew Gamble – who first grasped the historical significance of the Thatcher project and the radicalism of the New Right. Only later did the Labour party and its thinkers catch up with their analysis. Marxism Today saw Thatcherism for what it was: a deeply ideological, transformative political project that would reshape the post-war economic and political settlement in Britain.

As the ’80s wore on, Marxism Today began to locate Thatcherism within its wider historical context. Men make history, as Marx said, but not in circumstances of their own choosing, and as the smoke cleared from the battlefields of the class struggle in Orgreave and Wapping, the deeper social-economic forces underlying Thatcher’s success became more visible.

The first of these was the recomposition of the class structure itself. The wave of industrial militancy that swept western Europe in the late 1960s and ’70s had given way to the defeat and decline of the organised working class by the mid-1980s: forcibly broken by state power in the UK, diminished by technological change and progressive deindustrialisation elsewhere. Thatcher harnessed the rising forces of the service economy and the financial sector in London and southern England, growing the middle class and leaving her opponents to defend the crumbling bastions of the Labour movement in its northern, Welsh and Scottish heartlands. She gave a direct material stake in her project – homeownership, shares and rising real wages – to the skilled working class and professional middle class. At the same time, the manual working class was dispersed into low-skilled service sector employment or mass unemployment and inactivity, holding onto good unionised jobs where it could in the public sector and in those parts of industry that had survived the purge.

The second was the beginning of a new wave of globalisation, precipitated by Deng Xiaoping’s decision to open up the Chinese economy in the late 1970s. Of all the late 20th century’s political leaders, it is Deng who can lay claim to world historical importance, in the Hegelian sense. Gorbachev presided over the death of the Soviet Union, Deng the rebirth of China. As the Chinese embraced a market-oriented but state-led development strategy, low-cost manufacturing began to shift east, new regional blocs like the EU started to consolidate, and the architecture of the new global economy began to emerge. By the end of the Thatcher decade, China had been joined by most of the former Soviet bloc and (more fitfully) by India. Thatcher only faintly grasped the significance of these processes, viewing them through the lens of the Cold War and a revanchiste Britishness, but they served two enormously important goals for her: they rendered obsolete national economic planning of the kind that marked much of the post-war era, and they made it impossible to think of state ownership of leading business sectors as a viable modern economic strategy. To be sure, there was an alternative to her project, but it was the patient social democracy practised in much of northern Europe, not socialism. No matter – in the 1970s and early ’80s the British Labour party had proved itself incapable of offering either.

The third force was social liberalism. The new social movements of the 1960s – feminism, environmentalism and gay liberation – continued to advance their claims in the 1970s and ’80s. Thatcher’s social conservatism set her against these movements, but their influence was profound and their progress unstoppable. She rejected their claims for identity recognition, but their critiques of bureaucracy and patriarchal collectivism ran alongside her own attempts to demolish the institutional structures of post-war Britain, and those of the Labour movement in particular. Freedom and the demand for autonomy filtered through many different social and cultural channels in the 1980s and gave the Thatcher era a liberating energy that she drew upon, even while she resisted the political demands of feminists and gay activists (and worse, legislated for intolerance and bigotry). By the turn of the century, social liberalism had become mainstream, even if the goals of the new social movements were still far from being realised.

Thatcher’s genius was to harness these forces towards her own ends. As Ed Miliband said in his well-judged tribute, she defined her age. Her politics were as intellectually rampant and culturally expansive as they were socially conservative and politically divisive. In its earliest phases, the New Right generated a stream of new ideas, coalescing around key intellectual figures and spawning new thinktanks. By the end of the 1980s, these ideas had been given material form in privatised industries, owner-occupiers, and brash new cultural icons. (Although it is very noticeable that Thatcherism left few visible landmarks in the built environment, besides Canary Wharf, out-of-town malls and a clutch of Po-Mo buildings – hers was not an investment economy.)

No such dynamism exists on the British right today. Self-imposed austerity and the failure of ‘expansionary contraction’ has left the chancellor with little room for ‘giving’ sections of the British people any stake in his economic agenda: there are no state assets left to sell and no North Sea oil to fall back on. Financial services are contracting, but the export sectors are not expanding. Private sector employment is rising but real wages are still falling. The housing market outside London is stuck, leaving an older group of voters sitting on their asset wealth while their children and grandchildren stick it out in the private rented sector. A stagnant economy produces none of the material grounds that underpinned the political dynamism of the Thatcher era. Meanwhile, creeping climate denial cuts the right off from environmental entrepreneurs and denies them purchase on the single most important transformational task facing the British economy, that of moving to a low-carbon future.

Thatcher’s self-avowed heirs grope for techno-libertarianism or Hayekian creative destruction as a solution to this impasse. But another dose of free market economics is a political dead-end, and the message doesn’t travel far beyond the pages of the Spectator or the astroturf organisations of the campaigning right. Consequently, right-wing commentators are forced back on public service and welfare reform to assert their radical credentials. Here they stand on firmer political ground, given Labour’s current defensiveness on these issues, but this is hardly the bridgehead to a hegemonic blue future. A few more nudge seminars in Downing Street are not the stuff of an intellectual revolution.

What about the underlying forces? A post-crash economic agenda that can pull Britain out of its current malaise will mean a more managed capitalism – if not state planned – with structural reforms aimed at generating investment-led, regionally balanced growth. This is natural territory for modern social democracy. So too is the ageing society, which demands a productivist approach to the welfare state, investing in those things that will support full employment, such as caring services and human capital formation. The crisis of living standards – now acutely visible – spurs attention to the distribution of power in the economy, its productive potential and its balance of rewards. Again, these are all areas in which progressive answers have most purchase. The most fertile thinking stems from academic disciplines that are being reconfigured after the crash: new economic thinking that rejects the neoclassical assumptions; political theory that concerns itself with power, relationships and social connectedness; state theory that is moving out of the confines of new public management; the leading edge of key social sciences, like network theory. None of this is orthodox left thinking, but little if any of it is coming from the right.

Such intellectual ferment should give grounds of optimism to progressive forces. Just as Thatcher harnessed New Right thinking in the late 1970s and infused her project with its dynamism, so today the centre-left and wider progressive movements must generate an energy which gives free rein to these intellectual and political currents. Transformative political programmes are always high energy. They require greater risk-taking, political openness and freedom of debate than is currently evident in Labour party politics.

This article first appeared at IPPR, cross-posted with thanks

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