Vernon Bogdanor: The Margaret economy

"Making Thatcher’s Britain" and "The Conservatives Since 1945" reviewed.

Margaret Thatcher in 1975
Margaret Thatcher in 1975. Photograph: Getty Images

Making Thatcher’s Britain
Ben Jackson and Robert Saunders
Cambridge University Press, 345pp, £19.99

The Conservatives Since 1945
Tim Bale
Oxford University Press, 360pp, £55

Making Thatcher’s Britain comprises a perceptive collection of essays, primarily by a younger generation of historians and political scientists. Many of them make use of the massive cache of original material available on the Margaret Thatcher Foundation website and in the Thatcher papers at the Churchill Archives Centre, Cambridge. The book provides what is probably the best available introduction to the historiographical problems of the Thatcher era, and it can be read both with profit and with pleasure. But it also casts considerable light on the politics of today.

The central theme permeating the essays is that Thatcherism was not primarily an economic doctrine but a moral creed. “The real case against socialism,” Thatcher insisted in 1977, “is not its economic inefficiency. Much more fundamental is its basic immorality.” “Economics are the method,” she told the Sunday Times in 1981. “The object is to change the soul.” This moral dimension to Thatcherism was first understood by contributors to the journal Marxism Today such as Stuart Hall, Martin Jacques and Andrew Gamble (also a contributor to Making Thatcher’s Britain). It was Hall who coined the term “Thatcherism” as early as January 1979. Yet there is a paradox at the heart of Thatcherism, as John Campbell, Thatcher’s biographer, has pointed out. It is that, although her values were “conservative, old-fashioned and puritanical”, she presided, not over the restoration of a traditional moral order, but its opposite, “a culture of rampant materialism”. During the years of Thatcher’s political career, Britain passed, with great rapidity, from the world of Alfred Roberts to that of Mark Thatcher.

The film The Iron Lady shows Thatcher in the twilight of her life. But, even though she departed the political scene some time ago, she remains a powerful living presence in British politics. It is hardly possible to understand the financial crisis of 2008 and the events that followed without considering her legacy.

The central tenet of Thatcherism was that if the state stopped interfering with the processes of money-making, all would benefit; since, as the rich got richer, so would the poor. That is the philosophy that led to the crash. It held New Labour in thrall as well as the Conservatives. Peter Mandelson notoriously told a gathering of Californian computer executives in 1998 that “We are intensely relaxed about people getting filthy rich, as long as they pay their taxes”; and in 2008, John Hutton, Gordon Brown’s business and enterprise secretary, sought to reassure those worried about growing inequality by saying, “Rather than questioning whether huge salaries are morally justified, we should celebrate the fact that people can be enormously successful in this country.”

But, as Ferdinand Mount, a former head of Thatcher’s policy unit, comments in his recent book, The New Few,“Mandelson and his friends weren’t relaxed at all; they were obsessively tense about the danger of being mistaken for old-fashioned squeeze-the-rich socialists. Even the mildest suggestion that some modest reduction in inequality might be a good thing would be erased from the text of any important speech from the leadership.”

Only recently has Labour begun to make its break with the Thatcherite consensus. In June 2011, Ed Miliband told Labour supporters, “My party must change. We were intensely relaxed about what happened at the top of society. I say, no more. Every time a chief executive gives himself a massive pay rise – more than he deserves or his company can bear – it undermines trust at every level of society. We cannot and we must not be relaxed about that.”

In their valuable introductory essay, the editors of Making Thatcher’s Britain notice the sharp rise in economic inequality during Thatcher’s premiership. “The incomes of the poorest fifth of the British population rose by between 6 and 13 per cent between 1979 to 1993, while the incomes of the richest fifth rose by more than 60 per cent.” New Labour was far too insouciant about rising inequality, which served to undermine the contract on which society is based. It has become clear that neither the very rich nor the excluded feel much obligation to society. That is understandable in the case of the excluded, less so on the part of those more fortunate. Keith Joseph, Thatcher’s guru, understood that a market economy could only work effectively if it was underpinned by a moral framework. But he forgot to explain how this framework could be created in the unregulated economy that the Conservatives were creating. Perhaps he did not know. He was, Michael Foot declared, like the conjuror in the fair who takes your watch, wraps it in a handkerchief, smashes it with a hammer, and then says, “Oh dear, I’ve forgotten the second half of the trick.”

Thatcherism, despite its potency, was nevertheless an aberration. Conservatism in Britain has generally been a matter of instinct rather than ideology. The Conservative Party’s instinct has been self-preservation. Tim Bale, in The Conservatives Since 1945, seeks to explain this and is only partially successful. He has allowed himself to become imprisoned by models derived from political science, analysing changes in the Conservative Party in terms of various “drivers”, and evaluating their effects in accordance of whether they were “low”, “medium” or “high”. Such an approach is fatal for the historian, who must always be wary of generalisations and alert for what is concrete and exceptional. As in Bale’s previous book, The Conservative Party from Thatcher to Cameron, there is a disinclination to distinguish large matters from small, and at the end the reader is not much wiser than when he began. Bale’s conceptual scheme has little explanatory power since Conservative electoral success in the post-war years has been due as much to Labour failings as to anything that the Conservatives have done.

Since the end of Thatcher’s government in 1990, conservatism has reverted to type. The likes of Fred Goodwin and Andy Hornby can hardly be lauded as exemplars of a new moral order. So the Conservatives have become once again, as they were in the time of Harold Macmillan, the party of sound management, though this claim looks a little shaky at the moment. Still, at the next election their appeal is likely to be that they can run things better than their opponents. It is perhaps a somewhat limited appeal. When Baldwin proposed the slogan “Safety First” in the election of 1929, which the Conservatives lost, Keynes satirised it: “We will not promise more than we can perform. Therefore we will promise nothing at all.”

Vernon Bogdanor is professor of government at King’s College, London