When economic liberalism fused with social conservatism: Tom Whittaker looks at the origins, impacts and legacy of Thatcher’s politics, four decades on

May 4^th marks the 40^th anniversary of Margaret Thatcher’s election as Conservative Prime Minister in 1979. Although it is a cliché to say that this marked a watershed moment in British politics, it is undoubtedly true.

Since the second world war the Conservatives had broadly accepted what was termed the post-war consensus: nationalised industries, a welfare state and a role for the trade unions as representatives of the working class. Free-market economics had been marginalised.

Socially, British society since the 1960s had seen at least a partial liberalisation with regards to the death penalty, abortion, divorce and relationships between gay men. These reforms had enjoyed at least a significant degree of cross-party support.

However, from the late 1960s onwards, this consensus would be torn apart amidst economic recession and class struggle.

Following the oil crisis of 1973, stagflation – a combination of rising unemployment and inflation - undermined the faith of politicians in Keynesian demand management. Meanwhile, strikes would reach their highest level since the 1920s. Indeed, strike action by trade unions, particularly the two miners strikes of 1972 and 74, would shatter Tory Prime Minister Edward Heath’s incomes policy and cause the collapse of his government in 1974.

His successor Harold Wilson would buy a degree of industrial peace through the social contract he negotiated with the union leaders. But the union leaders could only enforce pay restraint on their members for so longer. With wages falling rapidly behind inflation, workers took strike action in 1978-79 to defend their living standards. The press and the Tories dubbed it the ‘Winter of Discontent’ and sought to manufacture a sense of crisis that would help contribute to the Callaghan’s eventual defeat.

These were the febrile conditions in which Margaret Thatcher became Conservative leader in 1975. The old ways of governing were clearly no longer working and by the time of the 1979 election Thatcher had embarked upon a radical departure from the ‘one nation’ conservatism of the 1950s and 60s.

Thatcher’s new synthesis can be seen as a cross between the economic ideas of Friedrich Hayek and the moral sentiments of Mary Whitehouse. Free markets and monetarism replaced state intervention and Keynesianism, but this return to economic liberalism would be combined with social conservatism. With the Falklands war against Argentina in 1982, Thatcher would add Churchill the great British imperialist to this repertoire.

Another inspiration was Enoch Powell. Powell believed that the Conservatives did not need to offer full employment and council housing to win over a section of the working class; this could be done through nationalism and racism. Thatcher took note and herself channelled Powell when she claimed that the British character was being ‘swamped’ by people of another culture.

Thatcher’s social conservatism and emphasis on Victorian values led her and her supporters to cast their opponents as standing apart from decent, respectable society. This helped her government defeat a number of major challenges to it in the 1980s.

In 1981 those who rioted against the unemployment resulting from Thatcher’s monetarist economic policies were told to ‘get on their bikes and look for work’. IRA prisoners on hunger strike in the same year were dismissed as common criminals, their demands for political status going unmet despite ten deaths.

Meanwhile, during its 1984-85 strike the National Union of Mineworkers was simply dubbed as ‘the enemy within’. The message was clear, whatever level of police violence was needed to break the mass pickets would be justified. The miners were fair game.

But combining economic liberalism with social conservatism was not only useful to Thatcher in legitimating the use of force against her political opponents. It also enabled her to reconcile the middle class base of the Tory electorate to an economic strategy of globalisation desirous by British capital.

Following the Winter of Discontent 1978-9, taking on the trade unions could be plausibly seen as key to restoring Britain’s greatness. However, as much as the middle classes might have supported Thatcher during these industrial disputes, it was increasingly clear that high interest rates and the privileging of finance capital was taking a serious toll on British manufacturing industry. Unemployment had risen to above three million by 1982 and was to stay that high for much of the decade.

In 1986, following her victory over the miners, Thatcher deregulated the city of London in the ‘Big Bang’. The same year she signed the Single European Act which would pave the way for the single market and possible monetary union.

But by the late 1980s, closer European integration was beginning to place considerable strains on the Tory party, threatening to pull apart the increasingly eurosceptic base of the Tory party, and Thatcher herself, from much of her cabinet and British big business which remained enthusiastically pro-European.

The late 1980s also saw mounting opposition to Thatcher in the streets. The deeply homophobic Section 28 which outlawed ‘the promotion of homosexuality’ by local authorities had provoked mass protests that were helping to shift public attitudes towards LGBT people in a more positive direction. Opposition to the Poll Tax, a highly regressive form of flat taxation, would deliver the coup de grace to Thatcher in 1990.

Thatcher was succeeded by John Major but he found himself unable to harmoniously combine free markets and social conservatism as support for both of these pillars of Thatcherism crumbled.

There was mass opposition to pit closures in 1992, with public opinion now swinging behind the miners, and to the Tories’ Criminal Justice Bill (1994) which on the one hand sought to criminalise raves and free parties and on the other hand failed to produce an equal age of consent for lesbians and gays. Meanwhile Major’s ‘Back to Basics’ morality campaign would be a national joke amidst Tory sex scandals, sleaze and ever more bitter divisions over Europe.

It would be left to New Labour leader Tony Blair (who Thatcher claimed was her greatest achievement) to reconfigure the free-market project project in a more socially liberal direction. Blairism promised the free market with a human face and the Labour party he led was now enthusiastically pro-European.

Certainly it is hard to imagine Thatcher delivering The Good Friday peace agreement in Northern Ireland or devolution for Scotland and Wales. Moreover, The Human Rights Act, The Macpherson Report, Civil Partnerships and the repeal of Section 28, all point to important differences between Blairism and Thatcherism, even if it would be a mistake to overstate Blair’s attachment to social liberalism (think ASBOs and the ‘war on terror’). 

But a slavish adherence to free-market economics remained a constant under New Labour. Wealth inequality continued to soar, albeit with some relatively mild measures to alleviate some of the worst poverty.

Thatcher’s legacy loomed large, but the era of deregulated finance that she ushered in would create the economic crash of 2008.

The collapse of Lehman Brothers and Royal Bank of Scotland would not be enough to end the political establishment’s devotion to the free market. The banks would be saved whilst ordinary people endured wage cuts and austerity.

Amongst the popular classes, however, austerity led to a widespread discrediting of free-market ideas. Bailed-out banks and food banks now feature more prominently in the minds of ordinary people than forty-year-old memories of the Winter of Discontent.

This has plunged British politics into turmoil, producing a series of election results that have thrown the establishment into crisis. Both the Brexit vote in 2016 and Corbyn’s success in the 2017 election can be attributed to a collapse in popular support for neoliberal economic policies.

The EU referendum of 2016 was supposed to settle a generation-long feud over Europe in the Conservative Party. David Cameron expected to win it 70/30 in favour of remain. Instead a combination of nationalist resentment against the EU from the Tory shires and economic discontent arising from the post-industrial Labour heartlands produced a narrow vote to leave.

The Thatcherite chickens had come home to roost. Closing factories whilst waving a Union Jack has not proven to be a successful long-term economic strategy for British capitalism. Brexit is the political price of a thirty-five-year-old trade deficit and stagnant labour productivity.

Brexit has also detached the Conservative Party from the policies which British capital wants to pursue. The British ruling class finds itself no longer represented politically by the party which had hitherto always been such a loyal servant.

This undoubtedly is an historic crisis of the Conservative party. Yet the left will need to go beyond the reheated Blairism which the siren voices in the Parliamentary Labour Party (PLP) and Change UK urge. For they have no vision beyond remaining in the EU and staying wedded to its free-market strictures. The price of this would of course be continued economic inequality and conditions conducive to the growth of the xenophobic and fascist right.

Returning to the 1970s, it was arguably the retreat of the Wilson/Callaghan government in the face of capital flight and the International Monetary Fund (IMF) that was the decisive moment in the rise of Thatcher. Had Callaghan called his own ‘Who governs?’ election: the people or the IMF, there is every chance he could have won it. The ground would have been pulled from beneath Thatcher’s feet.

Today, the bolder the challenge to neoliberalism and ruling class power that can be mounted by a Corbyn-led Labour party the less scope there will be for forces on the right to pose as anti-establishment. Conversely, the greater the scope for the left to pursue a radical and egalitarian social agenda that would have Thatcher turning in her grave.