How Thatcherism produced Corbynism

Ranging far beyond specific policy proposals, the paper argued for a radical reorientation in Conservative thinking. Britain had been in decline since the Second World War, and fundamental change was necessary. The Keynesian state that managed the post-war settlement must be rolled back. Public spending and the money supply had to be reduced, along with taxation, regional subsidies abolished and the power of trade unions curbed. (Boldly, Joseph also floated the possibility of introducing a British Bill of Rights and even decriminalising drugs.) What was needed in this time of national crisis was not the pursuit of consensus, but regime change—a move from one national settlement to another.

Framing Eliot’s analysis of cultural decline in political terms, Joseph’s paper wrote off the entire post-war exercise in reconstruction as a failure. The Shadow Cabinet was aghast. Joseph’s way of thinking, one member declared, was “a recipe for disaster”. But it was the self-styled exponents of pragmatism who were undone by events. With the financial crisis of 1976, Labour was forced to negotiate a loan from the IMF to stave off what was believed to be looming national bankruptcy. Britain’s post-war settlement had reached its limits. The question was no longer whether radical change could be avoided but what sort of change it would be.

Perhaps you need to have lived through this period to understand the mood at the time. Stories of uncollected rubbish in the streets, power cuts and people hoarding candles are not the stuff of urban legends. These things did in fact occur. Businessmen such as Jim Slater and James Goldsmith talked of a crisis of capitalism, while many in universities expected a dramatic shift to socialism. Wild rumours circulated of coups and counter-coups. Yet the political class and the academy were wholly unprepared for the regime shift that actually occurred.

Deploying a few simple ideas and policies, Thatcher demolished much of what remained of the post-war settlement. She left the NHS and the welfare state largely intact, and spending on public services increased during her time in office. But by rejecting the belief that government should actively promote full employment, privatising swathes of industry, selling off large parts of the social housing stock and curbing trade unions she altered Britain fundamentally.

Many doubted whether a lower-middle-class woman backed by a few fringe intellectuals could survive the rigours of practical politics. In the academy, the programme Thatcher implemented came as a bolt from the blue. An intelligentsia that was confident it understood the logic of world history was left gawping blankly when the social order it took for granted in Britain was suddenly dismantled, and looked on thunderstruck when communism collapsed and versions of the Thatcherite programme swept across the world. Beginning as a particular response to British difficulties, Thatcherism morphed into a universal ideology.

In Britain, as elsewhere, the Thatcherite project was self-undermining. While the country Thatcher brought into being was very different from the one she inherited, it was nothing like the country she intended to fashion. Insofar as it ever existed, her Britain was a country of dutiful middle-class families prudently saving for the future. But rather than consolidating and expanding this middle class, she consigned it to the memory hole. More individualist, post-Thatcher Britain is also less bourgeois.

Aside from their homes, few middle-class people have assets of any importance. Beyond the public sector, pensions are dependent on the vagaries of the market. Without job security, much of the middle class lives only months from penury. Incomes have increased for many, but so has debt. While distancing Labour from its past and turning it into an overwhelmingly middle-class party, Tony Blair continued the hollowing out of middle-class life that Thatcher began.

A type of capitalism emerged in which the practices that shaped bourgeois life as it had been known in the past – saving for the future, pursuing a lifelong career, self-sacrifice for the sake of family stability – became redundant or dysfunctional. Adapting to ceaseless change came to be regarded as the primary virtue. Accelerating and accentuating processes that globalisation was driving anyway, Thatcher created a society she could not have imagined.

Nearly 30 years after she was toppled from power in November 1990, the insecurities of post-Thatcher Britain have produced Corbynism — a type of Leftism ideally suited to the ambitions and illusions of the penniless bourgeoisie. The idea that Labour has reverted to the far-Left politics of the late Seventies and early Eighties, which has become commonplace on the Right, is at best a half-truth. Like the neo-liberals against whom they constantly rail, Corbynites regard the working class with distaste and disdain as an obstacle to progress. With their retrograde attachment to national identity and borders, the proper role of these remnants of industrial society is to submit to re-education by the party. Otherwise they are useless or dangerous.

This is a Leninist rather than a Marxian way of thinking, and underlines the differences between the far Left then and now. Owing more to Trump than Trotsky, Corbynite Labour is shaped more by identity politics and inchoate populist anti-capitalism than by any coherent socialist ideology.

As led by Michael Foot, sections of Labour cherished fond illusions about the Soviet Union and Mao’s China being imperfect embodiments of a socialist future. But the party did not automatically endorse terrorism directed against Western countries and contained little, if any, of the reflexive anti-Semitism that is today embedded at its highest levels. The Trumpist indifference to fact that is regularly displayed by the Labour high command today was unknown, and there was no personality cult surrounding the leader. In all these respects, Corbynism is very much of the present time.

A Corbyn government would mark a decisive shift from the regime that has been in power for nearly 30 years. Whether this would be a shift to another settlement is an altogether different matter. Another scenario looks more plausible. Having left behind the Thatcher regime, Britain could find itself unable to forge any new governing consensus.

A party that lacks a realistic policy programme cannot produce a regime shift in Britain comparable to that effected by Thatcher. Right or wrong, Thatcher’s core policies were practicable. Corbyn’s flagship policies — large-scale renationalisation, subsidies for selected industries, abolition of student fees – are not. Thirty years ago, influenced by the maverick Cambridge economist Wynne Godley, the Labour Left imagined an autarchic economy that would enable a socialist experiment in Britain to proceed behind a wall of tariffs and capital controls.

A similar insulation from world markets would be needed today. But globalisation is far more advanced than it was then, and both capital and production are much more mobile. The immediate effect of a Corbyn government would be capital flight on an unprecedented scale. Sterling and gilts, property and equity markets would be in danger of collapse. If Corbynite Labour persisted in the attempt to enact its policies, much of the already half-pauperised bourgeoisie would be ruined.

Yet, as Matthew Goodwin has shown in his piece How Corbynomics is winning over Britain, this unworkable economic programme is supported by large numbers of middle-class voters. Alienated from Thatcherite capitalism by their daily experience of its failings, “they are clearly willing to roll the dice on an alternative settlement”. With no alternative vision or programme, some Conservatives resort to the ideologue’s excuse that “true capitalism” has not yet been tried. But voters are not interested in a rerun of Thatcherism, and there are few signs of any new thinking. In practice, all Conservatives can do is mount a last-ditch stand on behalf of a status quo that much of Britain rejects.

It is impossible to know what will emerge from Theresa May’s seeing off the no-confidence motion against her.  What is clear is that the Brexit process as crafted by her has been derailed. An ultra-soft “Norway” deal — by now probably the least divisive compromise — may be done, or a second referendum held. But another referendum is not in Labour’s interest, since the party will have to leave behind its carefully crafted ambiguities on Brexit and risk a backlash in its Leave constituencies.

Nor is the result of such a referendum at all foreseeable. The decision to leave could be reaffirmed and the political class plunged into an even more intractable quandary, or a decision to remain could be narrow and leave the country more divided than before. The prospect of a disruptive no-deal Brexit has not been removed. Parliament may have seized control only to find itself incapable of converging on any course of action. In these circumstances the DUP and an alliance of ultra-Brexiteers and hard Remainers could side with Labour and the other opposition parties and trigger a general election. In these circumstances, a Corbyn government could well come to power. If it did, however, it would find itself facing a country that had ceased to be governable.

As Labour struggled with the constraints and compromises of power, sections of its mass membership would sniff betrayal and peel off to form more ideologically intransigent groupings. Working-class voters disgusted by the derailing of Brexit would be tempted to support an EDL-like version of UKIP or some new party formed from splintering Tory Brexiteers. The far Right would for the first time be a major political force. Britain would be what hard Remainers have always wanted, a European-style polity.

When Thatcher told me she would win without her academic supporters she was right. She departed from office earlier than she wished, but shaped a settlement that endured for a generation. Now that settlement is history, and there is no new one on the horizon.