What Are The Key Elements Of Thatcherism? To What Extent Was It A Reaction To The Post War Consensus?
What Are The Key Elements Of Thatcherism? To What Extent Was It A Reaction To
The Post War Concensus?
Whether it is viewed as a success or a failure, most accept that 'Thatcherism' was a major turning point in recent political history. The 1979 general election was in many ways the most significant since the end of the war, as it signalled the comprehensive end of what became known as the Post-war Consensus, changing fundamentally the way in which the country was governed. To understand whether Thatcherism was a reaction against this consensus we have to first understand what the consensus was and what the key features of Thatcherism were.
Thatcherism can be defined as an attempt to establish a new political and ideological framework based on a variety of new right ideas. Thatchers style of leadership also helped make up this ideology. Riddell says. "Mrs Thatcher's view, prejudice and style have determined government's actions more than any other single factor."
It is now possibly to determine several main themes which help make up Thatcherism
The first of these was the new way of managing the economy. Monetarism as it became known is a theory which rejects the aims of economic management. The idea was to keep inflation under control even if maintaining a high of unemployment. By adopting this idea the first Thatcher government took a vital step to breaking with the post war concensus.
The second theme is one that still remains a relatively dominant force in British politics, often reported on in the media as steps are being taken to privatise the underground. Monetarian economists often argue the cause of inflation was a need to reduce government borrowing. The main way of doing this was by raising income via selling off government owned assets.This was focused on the nationalised industries and services. The aim of this was to raise government funds which would help control inflation. It would also improve the efficiency of the formerly nationalised industries. The money from privatisation would be raised by selling shares to the public, privatisation would encourage wider share ownership. Thatcher believed this was important as it would encourage the public to participate in the economic as well as political aspect of the running of the country. The government began using the term "popular capitalism" to describe the society which they strove to create.
During the post war concensus the relationship between government and unions was close. Thatchers 'new right' however was hostile towards trade unions. The hostility was due to three main factors. There was an element of fear of the unions. This reached fever pitch when the miners strike of 1974 led to the downfall of the health government. This was replicated in the later strikes of 1978-79. By the end of the 70's it began to appear like the unions had become a threat the the governments authority.
The 'new right' argued that the activities of trade unions distorted the the working of the market by allowing the growth in wages to outstrip growth in productivity. Unions, in other words were responsible for reducing the competitiveness of British industry and should be blamed for Britains economic decline. They also believed that incomes policies were a cause of inflation rather than a cure for it.
Inflation could be reduced by making agreements with trade unions. Thatcher therefore severed the links with the union leaders. Legislation was drawn up the Thatchers government in an attempt to curb ...
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The 'new right' argued that the activities of trade unions distorted the the working of the market by allowing the growth in wages to outstrip growth in productivity. Unions, in other words were responsible for reducing the competitiveness of British industry and should be blamed for Britains economic decline. They also believed that incomes policies were a cause of inflation rather than a cure for it.
Inflation could be reduced by making agreements with trade unions. Thatcher therefore severed the links with the union leaders. Legislation was drawn up the Thatchers government in an attempt to curb the power and influence of the unions.
Centralisation is the fourth theme behind Thathcherism. It is obscure to think of this as a right ideology from a government who also spoke of severing links between state and the economy, trying to make a self sufficient economy. But as Gamble describes "The new right would like to be conservatives but they are forced to be radicals. They have to struggle against the forces which have gravely undermined the market oder and which, if left unchecked, will destroy it.
This was directly an attempt to break with the post war concensus and the strong Thatcher followers concentrated as much power as possible into their hands whilst ensuring that alternative, opposition sources of power were controlled or removed.
An authoritive stance is central to Thatcherite ideology. One of the criticisms levelled at government policies during the post war concensus was that, by involving the state in activities it should play no part in, the credibility of the state had been undermined.
Thatcher strove to restore the authority of the state and to increase it further.
The way the government intended to do this was by removing the state from involvement in areas where it ought not to have a role. Eg. Privatising national industries. They also intended to be strong in areas of law and order and defence. The conservatives then coined the phrase "free economy, strong state."
The new style of government which Thatcher adopted also had a big impact on what is now known as Thatcherism. Kavanagh argued in 1990 that Thatchers individual contribution to British politics can be described under four headings. First she had an unusually decisive and confrontational style and a forceful personality. She was also an activist in her cabinet, with the number of both cabinet meetings and committees falling dramatically during her 'reign'. She often pushed other cabinet members into her way of thinking. Her debating skills were at the time superior, never wanting to be bettered when challenged or asked a question. Although she failed to portray herself as a very compassionate person she was a very decisive figure and was shown in this light to the public. She aimed to achieve a status of 'what you see is what you get.'
Thatcher and her group of advisors often look back to and referred back to the Victorian period for inspiration of ideas and policies. She saw the way the Victorians dealt with politics and crime and believed that it was up to the people to make a difference. Therefore to involve the people was the key. Certain similarities could be drawn between Thatcherism and Roosevelt's 'New Deal' in the 1930's in the US.
In her autobiography, Thatcher comments:
' I never felt uneasy about praising "Victorian values"...The Victorians had a way of talking which summed up what we were now rediscovering - they distinguished between the deserving and undeserving poor. Both groups should be given help but it must be help of a very different kind if public spending is not just going to reinforce the dependency culture.'
Thatcher was a strong believer of self help and individualism. She even went as far to admit that one of her many aims was to destroy socialism. She famously stated that there was "no such thing as society."
As the above suggests, there was a moral dimension to Thatcherism and this informed many of the Thatcher governments policies.
The consensus emerged in the difficult but optimistic years following the war. It came at least partly from a desire to create the "New Jerusalem", creating social and economic progress from victory. It was in a sense a reaction against the 'consensus' that went before, that of a generally non-interventionist government, which was in the memory of the 1930s. The consensus, installed by the policies of the 1945-51 Labour government, marked a great increase in the role of government in peacetime economy and society, something which remained generally unchallenged for decades by successive governments. This does not mean that there was no disagreement between parties and nothing was at stake at elections, as there were many instances of bitter conflict between parties and party identification remained high - but the consensus was a set of parameters in which policies could change, almost agreed goals but disagreement on how they should be achieved. For example, the retreat from Empire was generally agreed on, but the pace and the timing was a matter for difference between the parties.
The term Post-war Consensus is used broadly to mean two things. Firstly, the style of government - which interacted with other groups in society, especially the Trade Unions far more in formation of policy than before the war. Secondly, the range of policies enacted - which were based to a large extent on the work of Beveridge and Keynes, with broad agreement on such issues as full employment, welfare, role of Trade Unions and Britain's international role. This was popular with the electorate and was not significantly challenged by any of the successive governments until the 1970s, when the broad mainstream agreement started to fall apart. To understand fully the reasons why the consensus lasted as long as it did and why it eventually failed we must look at each part of it in detail.
Perhaps the most important feature of the consensus was the commitment of government to provide full employment. This was something which was very popular with the electorate, especially in 1945, with the memory of the misery of unemployment in the inter-war years still fresh in the minds of many. The work of Keynes was very influential in the pursuit of full employment. He said that it could be achieved by using government spending, taxation and borrowing to regulate aggregate demand and create employment. IN times of recession and unemployment, the government would borrow, spend and cut taxes, creating jobs and pumping money into the economy. This interventionist approach was adopted by both parties - the 1950 Conservative manifesto said "We regard the maintenance of full employment as the first aim of a Conservative government." This seemed to work very well through the 1950s and much of the 1960s, with unemployment remaining very low, but by the 1970s it no longer seemed possible, and in 1975, a Labour government abandoned full employment as its aim. According to Keynes, they should have solved the economic crisis by increasing demand, but James Callaghan stated this was not to happen.
The consensus was that the unions were an important economic actor and so should be consulted on the formulation of economic policy. This assumption originated from the war, when the unions had played a valuable role in the war effort. There was an acknowledged need to control the actions of the unions with law because of the damage they could do, especially with inflation, but legislation had little effect. This is another area where the policies of the Thatcher governments were a direct reaction against a central part of the consensus.
The final major component of the post-war consensus was the welfare state. This consisted of the health service and the social services. They were established after the war as available for all at the same level and on a national scale, and like full employment, the mixed economy and the role of the Trade Unions, their continuance was not seriously questioned until the 1970s, when both left and right started to feel the situation was inadequate. The welfare system of benefits was criticised by the left for not redistributing income well enough, and by the right for undermining the productivity of the economy. The Thatcherite Conservatives disliked the welfare system because it was increasingly expensive and so needed high taxes, which were opposed by the right because they reduced incentives to work harder, and because reliance on state handouts reduces self-reliance. This did not mean they wanted to end the welfare system, but reduce levels of welfare and its tax costs. In reality they managed to change little - with so many receiving benefits, any reduction was bound to face great resentment. Total expenditure actually rose considerably due to the substantially greater number of people claiming unemployment benefit and pensions. Therefore while the Thatcher governments were far more opposed to the welfare state in ideology and rhetoric than any other pervious post-war government, they did little to decrease its dominance in the lives of people.
Therefore the "Thatcher Revolution" can easily be seen as a reaction against the post-war consensus. It rejected many vital areas of it on principle and enacted policies which would have been unthinkable politically only years earlier in a government of either party. By the 1970s Britain's relative decline in the world since the war was painfully evident, and many turned to the consensus policies for a reason for this. The policies of Mrs Thatcher reversed many things taken for granted for over 30 years in an attempt to stop the rot which was seen as having crept into the nation's economy and society.
Bibliography
Dennis Kavanagh & Peter Morris - Consensus Politics from Attlee to Thatcher - Basil Blackwell
Terry Gourvish and Alan O'Day - Britain since 1945
Malcolm Smith - British Politics, Society and the State.
