Fifty years after the election of Margaret Thatcher as the leader of the Conservative Party, Terrence Casey looks at the economic and social conditions, as well as the personalities involved, that lead to her rise.
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Fifty years ago this month, the Conservative Party announced its new leader, Margaret Thatcher. She would lead the Tories to victory four years later, becoming Britain’s first female Prime Minister and, with two more election wins, the longest serving Prime Minister of the 20th century. Her administration was also the most consequential and transformative of recent history. Major elements of the political and economic order constructed after 1945, a “postwar consensus” built upon social welfare, nationalization, and full employment, were dismantled (not so much the welfare state; she could only pick at that). Government reoriented toward cutting taxes, shrinking government, and deregulation – the neoliberal order. Nor was it confined to Britain. The Thatcherite revolution was the forefront of a global neoliberal advance.
Thatcher and the Conservatives managed to create a transformative political moment. This required certain prerequisites, which I dub the “six Ps”: poor economic performance; a widespread recognition of policy failure; control of a major party; well-developed alternative possibilities for reform; key personalities to push these ideas to the forefront; and favorable political conditions.
Transforming a nation’s political economy, not to mention the world, is no small thing. How does one get there? In my new book, Forging the Iron Lady: Margaret Thatcher, the 1970s, and the Origins of Neoliberalism, I explore how Thatcher and the Conservatives managed to create a transformative political moment. This required certain prerequisites, which I dub the “six Ps”: poor economic performance; a widespread recognition of policy failure; control of a major party; well-developed alternative possibilities for reform; key personalities to push these ideas to the forefront; and favorable political conditions.
The economic background to Thatcher’s rise
The rise of Thatcherism is best understood in its historical context, and Britain in the 1970s was a mess. The postwar era was one of relative economic decline,. The UK became “the sick man of Europe.” The global economic downturn of the 1970s rendered these maladies more acute, manifesting in rising inflation and industrial unrest. Crisis followed upon crisis. Edward Heath’s Conservative Government faced rampant industrial action, including two miners’ strikes that shut down power generation and industry being put on a three-day week. The “lights going out” remains an illuminative metaphor for the decade. To break the 1974 strike Heath called a snap “Who governs Britain?” election, which he promptly lost. Yet Labour under Harold Wilson fared little better. Their Social Contract promised industrial peace in exchange for more spending, and spending surged to its peacetime peak; so, however, did inflation, hitting 25 per cent in 1975. A financing crisis followed, necessitating an emergency loan from the IMF. Labour, now led by Jim Callaghan, had to accept deep spending cuts. With each new calamity, the system seemed more paralytic; the country was becoming “ungovernable,” regardless of whether the Conservatives or Labour was in charge.
The desire to chart a path out of the abyss drove Thatcher to challenge Heath for the leadership in 1975. Hers was a long-shot victory, one that might not have occurred had Ted Heath been less arrogant and voluntarily stepped aside after his third election defeat.
The desire to chart a path out of the abyss drove Thatcher to challenge Heath for the leadership in 1975. Hers was a long-shot victory, one that might not have occurred had Ted Heath been less arrogant and voluntarily stepped aside after his third election defeat. Yet he was, and she won, and now she was atop a major political party in a position to undertake transformative change.
How Thatcher took over her Party
Having won the leadership, she still had to win over the party. The majority of the Shadow Cabinet were One Nation Tories like Jim Prior and Ian Gilmour, and her position was insufficiently secure to see them off. She wanted to smash the postwar consensus. Tory moderates’ view was the postwar consensus simply represented the political environment in which they must live, and party adapt. Nor did they see the Heath Government as a failure. Heath had a run of bad luck and misguidedly tried to challenge the unions. Court the moderate electorate to return to the Tory fold and they be back in office in no time. That required comforting words, assurances of stability, not radicalism. This division hindered Thatcher’s ability to articulate alternative policies. The Thatcherite and One Nation factions were at odds on how to approach the key challenges of the day – fighting inflation and managing the trade unions. Official policy demanded obfuscation for the sake of unity.
Success came by drafting outsiders through the Centre for Policy Studies. Among them were John Hoskyns and Norman Strauss, authors of the “Stepping Stones” strategy. Winning the next election, they argued, was insufficient; the Conservatives had to induce a “a sea-change in Britain’s political economy.” Voters must be bid to reject socialism and support transformative regeneration, which meant grappling with the main obstacle to reform: the unions. The party establishment thought all of this was dangerous nonsense. Party Chairman Peter Thorneycroft bid every copy of Stepping Stones to be burned. Thatcher, Joseph, and crucially William Whitelaw, supported it, however. It would provide focus and clarity when events eventually broke their way.
The policy vacuum that Thatcher filled
Break their way they did with the Winter of Discontent, the wave of strikes sweeping the country in 1978-79. The Callaghan Government combatted inflation through an incomes policy, seeking to hold wage growth below inflation. With real wages declining for several years, workers finally rebelled. Strike followed upon strike throughout a frigid winter, the inconveniences, disruptions, and misery piling up upon the public. Once again, the government also froze, unable to formulate a coherent response in the face of chaos. Callaghan was dedicated to the corporatist approach. Surely union leaders would see common sense; wages had to be restrained if inflation was going to be conquered. Even if national union were disposed to a deal, and many were not any longer, local officials were no longer willing to follow national direction. The Cabinet debated declaring a state of emergency, as Heath had, but could not countenance imposing this on their allies. Nor did they have any alternative to their incomes policy. Hence they vacillated between expressions of outrage, depressed acceptance, and capitulation, which collectively resolved nothing.
Political space was thus opened for transformative politics. Thatcher has spent here years as Opposition Leader articulating her political vision, based on advocacy for economic as well as political liberty, unapologetic support for capitalism, opposition to aggressive egalitarianism, and a smaller state. One Nation Tories resisted attempts to have this vision impede on their moderate policies. Now Thatcher was able to move her party definitively to the right, taking a much harder line against the unions, for example. Political contestation in the Wilson-Heath years was largely about which party was the better manager of the postwar consensus. With support for that status quo eroding, Thatcher and the Conservatives presented an alternative approach that enough voters deemed capable of getting a grip on the nation’s crises. The 1979 election was never really in doubt.
The importance of Thatcher’s allies
Thatcher did not create Thatcherism alone; many key personalities were involved. Sir Keith Joseph’s “conversion to conservatism” in 1974 cleared the path for Thatcherism before he destroyed his leadership prospects by questioning the quality of “our human stock.” A large supporting cast came out of the CPS, recruited by director Alfred Sherman, not to mention a host of other “intellectuals for Margaret,” in Charles Moore’s words. Former TV Producer Gordon Reece honed her image, playwright Ronald Millar her message. Of course, Thatcher herself was the key personality in her own story. A conviction politician, for sure, she was also cautious and pragmatic, skilled at exercising strategic patience until the moment was ripe. The Winter of Discontent eroded Labour’s sense of governing competence, but it is not clear that any Conservative leader would have won in 1979, Heath having undermined the voters’ sense of Tory competence. Thatcher has the political acumen and skills to catch the political tide and ride it into Downing Street.
Those discontented with the status quo, those who wish to construct a new political-economic order where neoliberalism once reigned, would do well to reexamine the Thatcherite rise to power to better understand the practicalities of making transformation happen.
Thatcherism did not just “happen.” A series of political preconditions served to create conditions for that great transformation to occur. History is not mechanistic; there will be no repeat of the past. That should not distract us from using the past to think concretely about the pathways to change in the present. Those discontented with the status quo, those who wish to construct a new political-economic order where neoliberalism once reigned, would do well to reexamine the Thatcherite rise to power to better understand the practicalities of making transformation happen. I can suggest an enlightening book to that end.
All articles posted on this blog give the views of the author(s), and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science.
Image credit: mark reinstein in Shutterstock
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