Loading

 

 

The New Right and Thatcherism

Last modified: 08/01/2017

This document is rather long but I envisage that the materials therein could be covered in about 5 lessons which would seem to be a reasonable time allocation within an introductory course on Political Ideologies.

A Beginner's Guide to Neoliberalism: series of podcasts from the New Economics Foundation [nef]  Very useful new link added September 2015.

Tory! Tory! Tory! Part One; Part Two ; Part Three

Theresa May and One Nation Conservatism {Conservative Home: Tim Bale]

 

  • Introduction

For much of the post 2nd World War period the Conservative Party was led and dominated by so-called Right Progressives or One Nation Conservatives such as R. Butler, I. Macleod, H. Macmillan and Q. Hogg who harked back to the Disraeli tradition of One Nation Conservatism and were prepared to accept pragmatically  the expansion of state activity ushered in via by the 1945-51 Labour government programmes involving selective nationalisation, expansion of the welfare state, Keynesian economic policies and tripartite decision making. Once in Government the One Nation Conservatives broadly retained these Labour programmes initiatives while emphasising that the most profitable sectors of the economy would remain in private control and  supporting the continuation of economic inequality because of their belief that private property was a pre-requisite for liberty and that capitalist economic inequality could best promote economic growth and rising living standards. However they also recognised that full employment and the expansion of the welfare state were necessary to improve health, housing, education and to reduce poverty if the UK was to be a cohesive One Nation community.

 Consequently  it has been suggested that from the late 1940s  to the end of the   1960s a bipartisan political consensus existed between Labour and Conservative parties in relation to the most important areas of government policy although the extent of political consensus should not be overstated because the Labour and Conservative parties did of course disagree over important details of policy.

However even in the era of the post-war consensus many Conservatives continued to hold classical liberal pro-market or traditional Tory views and especially from the 1970s onwards the views of the Right Progressives were challenged  by the  neo-liberal strand of New Right thought   associated especially with the theoretical ideas of academics such as Friedrich Hayek and Milton Friedman  and with their development in the UK in pro-Conservative think-tanks such as the Institute of Economic Affairs , the Adam Smith Institute and the Centre for Policy Studies. Among the first modern UK Conservative politicians to espouse elements of New Right thinking were Enoch Powell and Keith Joseph although it was only when Mrs Thatcher,[ having become leader of the Conservative Party in 1975 ]consolidated her hold on power in the early 1980s that New Right ideas became more influential in government.

Click here for some interesting YOUTUBE clips of Milton Friedman expounding his political ideas.

Click here for a recent critique [August 2010] of the economics of neo-liberalism from Cambridge University economist Ha-Joon Chang

Click here for  recent critique of Privatisation in the UK from the Guardian's Seamus Milne

Mrs Thatcher and her supporters were very critical of the Right Progressive tendency which dominated the Conservative Party during the period of the so-called post war consensus prior to Mrs. Thatcher's ascendancy. The Thatcherites claim that successive Conservative governments of 1951-1964 more or less accepted the policies and institutional frameworks developed by the Labour governments of 1945-1951 which had resulted in the so-called post-war "Butskellite consensus between Labour and Conservative governments from 1945 until perhaps 1970. 

According to the Thatcherites the Right Progressive Conservatives had encouraged the growth of an excessively bureaucratic state; they had helped to destroy individual initiative because of their acceptance of high rates of income taxation which reduce incentives to work, save and invest;  they had permitted the growth of an  expensive, inefficient Welfare States which create exactly the kind of dependency culture which prevents individuals from helping themselves possibly leading to the development of a so-called Underclass; they supported economically inefficient nationalised industries at the expense of the private sector and they relied on flawed Keynesian techniques of macroeconomic management. Their  reliance on tripartite or corporatist bargaining processes undermined the ability of government itself to manage the political process. In effect, because Conservative governments between 1951-64 and 1970-74 had made no serious attempts to reverse the Labour policies of 1945-51, subsequent Labour administrations of 1964-1970 and 1974-1979 were able to push the UK even further along the road toward what the New Right regarded as the eventual socialist nightmare. Therefore if and when a new Conservative government were returned to power it would be necessary to reverse these trends via the introduction of government policies which were much more in tune with the ideology of the New Right.

Keynesian methods of demand management would be replaced by an emphasis monetarist theories emphasising the importance of the control of the money supply as a means of controlling inflation and market based supply side policies would be introduced which were designed to increase the overall efficiency of the private sector of the economy which was to lead to increased supply of goods and services and rising living standards. These market based supply side policies would include measures to restrict the size of the public sector so that additional resources would be available to increase private sector production, the privatisation of nationalised industries, the deregulation of the private sector, the reduction of rates of taxation [especially income tax rates ]to increase financial incentives, the reduction of trade union power , the restriction of social security benefits as  a means of restricting the development of what the New Right considered to be a welfare dependent underclass and the introduction of quasi-markets into the health and education services.

Yet it must be remembered that the processes of government are so complex that it is impossible for any government to be ruled solely by ideology. and that in practice the Thatcherite governing methods were strongly influenced by pragmatism as well as ideology. Thus despite the New Right opposition to Keynesian ideas and its support for monetarist principles these monetarist principles were effectively abandoned by the Conservative government in the early 1980s and the Conservatives reverted in practice to more Keynesian methods especially when attempting to engineer pre-election economic booms and despite the New Right's commitment to reduced real levels of government spending Mrs. Thatcher's Conservative governments actually presided over increased real government spending partly because higher levels of unemployment necessitated higher levels of social security spending [although actual real benefit levels were restricted] and because it was clearly impossible politically to reduce government spending on the NHS , the police and the military . Not for nothing have cartoonists depicted Mrs. Thatcher standing on the academic tomes of Hayek and Friedman but reading the reports of political marketing advisers Saatchi and Saatchi.

 

  • The New Right, Neo-Liberalism and Neo-Conservatism: A Checklist
  •    The New Right, Neo- Liberalism and Neo-Conservatism: A Checklist

  Dimensions of Neo- Liberalism

  • Support for Individual Freedom
  • Support for the Market Mechanism and the Private Sector
  • Support for Economic Inequality combined with Equality of Opportunity
  • Against Socialism
  • Against the Post-War Consensus
    • Support for lower levels of government spending and lower rates of taxation
    • Support for Monetarist rather than Keynesian methods of macroeconomic management.
    • Support for privatisation as an alternative to nationalisation
    • Support for lower levels of spending on welfare
    • Support for the privatisation of welfare services
    • Support for Private Health care and Private Education
    • Support for "Quasi-Markets in State Health and Education services
    • Supporting the reduction of  local government autonomy

 

    • Supporting the reduction of  "excessive" trade union power

   Dimensions  of Neo-Conservatism

    • Support for Traditional Sources  of Authority
      • Support for the State
      • Support for strong, punitive approaches to law and order
      • Support for "traditional approaches to morality
      • Support for the "traditional family"
      • Support for "traditional" approaches to education
      • Support for "national culture" rather than multi-culturalism
      • A tendency to Euroscepticism

  

  

  • The New Right, Neo-Liberalism and Neo-Conservatism: Analysis

It has been pointed out that the political thought of the New Right actually consists of two separate elements which are sometimes complementary and sometimes  contradictory:

An economic liberal element which emphasises both the  importance of individual freedom and responsibility and the  superiority of the market mechanism as a means of resource allocation which in turn means that government intervention in economy and society should be limited and confined to the creation of the conditions in which the private sector of the economy can operate most efficiently;

A neo-conservative element which "involves a traditionalist reaction against progressive liberal permissiveness." Thus, neo-Conservatives are likely to call for a reassertion of traditional values in relation to issues surrounding the nature of the family, the output of the mass media, the education system, religion, law and order, controls over the consumption of alcohol, tobacco and illegal drugs, defence of national sovereignty [for example in relation to the EU], the protection of the environment , calls for stricter immigration controls and opposition to the growth of multi-culturalism in UK society..

From the check list of issues provided at the beginning of this document it is clear that within the New Right considerable tensions are likely to exist as between economic or market liberals and neo-Conservatives such that whereas neo-Conservatives would support government intervention in the form of planning controls to protect the environment, immigration controls  to protect the "British way of life", censorship to defend public morals  and legislation to limit the consumption of alcohol, tobacco and. especially hard drugs, for market liberals , these are matters which can be left primarily to the market mechanism.  

 

The neo-liberal dimension of New Right ideology involves support fore the core principles of classical liberalism: most notably individualism, laissez faire and minimal government intervention in society involving the securing of social order and the maintenance of the conditions necessary for the market mechanism to operate effectively. In the neo-liberal view since individuals are the best judges of their own self-interest they should be allowed to pursue their own  self interest both in economic affairs and in their own personal  lives with limited regulation by the state.

  • . Neo=Liberals within the New Right s argue that individuals are rational and therefore the best judges of their own interests and that overall economic efficiency can best be achieved by unregulated laissez faire. Neo=Liberal support for laissez faire is  under-pinned by the economic theories outlined by Adam Smith in his study “The Wealth of Nations”[1776] in which he argued that the competitive capitalist economy based upon private profit and individual self-interest could via the so-called “invisible hand” of the market mechanism secure the best possible living standards for all members of society.  [Essentially the theory suggested that if large numbers of firms were in competition with each other they would try to keep their prices as low as was consistent with  a reasonable level of profit for fear that if they increased prices they would lose sales to their competitors. Furthermore in the competition between firms, efficient firms which could produce most cheaply would be able to expand at the expense of higher cost firms who would be driven out of business. Consequently the economic competition between firms would mean that consumers can buy from the most efficient firms charging reasonable prices and all of this can be achieved without government intervention in the economy i.e. via laissez-faire. Readers interested in a graphical exposition of the theoretical model of perfect competition as approximating to the operation of free market capitalism may click here  for a very useful presentation from the Tutor2U website] [Addition : January 2013]
  • However critics of neo-liberalism have argued that Adam Smith's Theory of Moral Sentiments clearly showed that he  also believed that capitalism also promoted excessive individualism and self- interest and that the principles of division of labour on which capitalism is heavily based also undermined the capacities for individual self-development among routine factory workers. Consequently these critics have argued that neo-liberals have unjustifiably characterised Adam Smith as a supporter of neo-liberalism whereas in reality Adam Smith should certainly not be regarded as a supporter of the kind of deregulated capitalism supported by neo-liberals but rather as a supporter of gradualist reform of the capitalist system and  it is for such reasons, for example,  that former Labour Prime Minister Gordon Brown emphasised the importance of Adam Smith for the development of Centre -Left policies rather than neo-liberal policies . Click here  and here  for some further information on these elements of Adam Smith's thought .
  • Be that as it may  the neo-liberals argue that private sector companies, motivated by the search for profit will be able to respond more flexibly and dynamically to the ever changing tastes of consumers  than can nationalised industries and other state organisations.
  • Neo-liberals  believe also that international trade should be organised according to the principles of laissez-faire and be free rather than restricted so that international specialisation can generate further increases in economic efficiency as individual countries  concentrate on the production of the goods which they can produce relatively efficiently while importing from abroad the goods that can be produced relatively efficiently abroad. It follows that neo-liberals believe that  globalisation based upon neo-liberal principles will result in greater international economic specialisation the benefits of which are assumed to trickle down to poor countries and to promote development there. Suffice to say that many experts in the field of the politics of development reject these conclusions entirely. For example click here to view Dr. Sarah Bracking's critical assessment of neo-liberal development theories at Amazon.com.
  • If capitalist market mechanisms are left to operate freely with little or no offsetting government intervention they are almost certain to result in very unequal distributions of income and wealth but according to all Conservatives [and especially perhaps according to neo-Liberals] such inequalities are natural, desirable and inevitable. This is because individuals differ genetically in their talents and abilities and in free societies with limited government intervention this will lead inevitably to economic inequality of outcome which is also desirable because it will provide the financial incentives necessary to generate economic growth, the advantages of which will also trickle down to the poor so that everyone gains from economic inequality of outcome. However neo-liberals do support equality of opportunity or meritocracy: it is only fair and just that all should have an equal chance to improve their economic situation and equality of opportunity also promotes economic efficiency.
  •  Neo-Liberals are especially likely to support this line of argument and much less likely than the Right Progressive faction of the Conservative Party to support taxation and social security policies which result in greater economic equality. However both neo-liberals and Right Progressives emphasise that although they do not believe in economic equality they do believe in equality of opportunity.[ Indeed both factions argue that state policies designed to increase equality inhibit equality of opportunity while those on the Left argue conversely that without actual equality, equality of opportunity is impossible. What do you think, then?]
  • In recent years theorists on the Centre-Left of politics have argued that, in any case,  Adam Smith was not solely a supporter of unbridled free market capitalism: he also recognised the dangers of market failure; he was a supporter of redistributive taxation; he recognised the potentially harmful effects of monotonous factory work in  away which to some extent, although not entirely,  anticipated Marx's analysis of alienation; and he was a strong critic of self-interested individualism. Simon Lee, in his study "Boom and Bust : the Politics and Legacy of Gordon Brown" [2009] argues that it is for such reasons that the ideas of Adam Smith exercised such a considerable influence on Gordon Brown's political philosophy.  Readers may also click here for a Lecture on Adam Smith from the Yale University course: Foundations of Modern Social Theory given by Professor Ivan Szeleny in which he discusses competing interpretations of the thought of Adam Smith. [Addition : January 2013]
  • The Neo-Liberal critique of the government or public sector is often based on Public Choice Theory in which it is argued that state bureaucrats, far from providing neutral, objective advice to ministers, have a vested interest in the expansion of the state because it enhances their own power, prestige and career  opportunities while simultaneously starving the private sector of the economy of the resources necessary for economic growth on which ultimately citizens' living standards depend.
  • Further pressures for the expansion of the state come from left-wing academics, public sector unions, pro-welfare pressure groups and vote seeking politicians all of which is said to have led to a situation of government overload whereby government had created expectations among the voters which it could not possibly meet.
  • Socialism in all its variants has many disadvantages. In its Marxist version it involves dictatorship and the destruction of individual liberty. In its more moderate Western social democratic version, it is too bureaucratic; it is economically inefficient because of its reliance on nationalised industries at the expense of the private sector and  because its reliance on flawed Keynesian techniques of macroeconomic management. Its reliance on tripartite or corporatist bargaining processes undermines the ability of government itself to manage the political process; it destroys individual initiative because of its reliance on high rates of income taxation which reduce incentives to work, save and invest; and it is based upon the development of expensive, inefficient Welfare States which create exactly the kind of dependency culture which prevents individuals from helping themselves possibly leading to the development of a so-called Underclass.
  •   Neo-liberals are critical also of the Right Progressive tendency which dominated the Conservative Party during the period of the so-called post war consensus prior to Mrs Thatcher's ascendancy. They claim that successive Conservative governments of 1951-1964 more or less accepted the policies and institutional frameworks developed by the Labour governments of 1945-1951 which resulted in the so-called post-war "Butskellite consensus between Labour and Conservative governments from 1945 until perhaps 1970. The neo-Liberals were  critical also of Ted Heath's Conservative government of 1970-74 which although it showed some sympathy with New Right ideas in 1970-1972 subsequently , according to the New Right returned to the policies of the dreaded post-war consensus.
  • In summary  because Conservative governments had made no serious attempts to reverse the Labour policies of 1945-51 the subsequent Labour administrations of 1964-1970 were able to push the UK even further along the road toward  what the New Right regarded as the eventual  socialist nightmare and Ted Heath's government similarly had done nothing to reverse this awful scenario.
  • Furthermore as mentioned the neo-liberals argue that individuals should be free to organise their personal relationships and leisure activities as they see fit. For example neo-liberals would support the increased employment of married women on the grounds that it increases individual freedom and economic efficiency and they might also support pre-marital sexual relationships, more liberal divorce and abortion law, same sex relationships and hard drug use as exercises in individual freedom. We should note that this type of individualism would not be accepted by traditional and neo-conservatives whose rather pessimistic view of human nature leads them to argue for controls over individualism exercised via traditional institutions such as the family, the church and the education system and also by the state.

 

  •  Let us consider some of these arguments in a little more detail.
  • Neo-liberals believed for several reasons that it is necessary to reduce the scope of the state which means that overall levels of government spending should be reduced.
  1. They believed  that the growth of the public sector had arisen to a considerable extent because successive governments, both Labour and Conservatives , had increased public spending partly to placate powerful interest groups, most especially the public sector trade unions and professional associations but also in an attempt to "buy votes" to secure electoral victory. The outcome was a situation of "government overload" whereby government was unable to meet its increased commitments without damage to the private sector of the economy.
  2. The growth of the public sector had starved the private sector of resources which resulted in low private investment and reduced international competitiveness and in slow growth of exports and increased imports which obviously would result in balance of payments problems.
  3. They pointed out that the growth of the private sector required higher taxation and/or increased government borrowing but believed that higher taxation   undermined incentives to work, save and invest and that increased government borrowing was potentially inflationary.
  4. They argued that the Keynesian approach to the macroeconomic management was misguided primarily because attempts to maintain high levels of employment via high levels of government spending and /or reduced taxation had resulted in higher rates of inflation which in turn would lead to more unemployment, for example due to the decline in competitiveness caused by the higher rate of inflation. [The New Right critique of Keynesian economics raises some difficult issues of economic theory which cannot be considered here in any detail. Essentially New Right theorists were influenced by the monetarist theories of economists such as Milton Friedman who argued that inflation was to be  controlled via control of the money supply and that any attempt to run an economy at less than the natural rate of unemployment would inevitably result in accelerating inflation.]
  • Neo-liberals believed that nationalised industries were inefficient. They were poorly managed because managers knew that if they made financial losses these could be offset by government subsidies so that the managers' incentive to increase efficiency was much reduced with the result that individuals were obliged to pay higher taxes  to help finance nationalised industries' losses and these high taxes reduced individual financial incentives to work, save and invest. The answer, therefore was that nationalised industries should be privatised, thus extending the scope of the private sector and reducing the need for high rates of taxation both of which would, according to the neo-liberals, increase economic efficiency. Click here for a Guardian perspective on the history of privatisation 1979-2012

 

  • Furthermore the Neo-Liberals are strong supporters of financial and industrial deregulation within the private sector believing that excessive government regulation inhibits financial and industrial efficiency.  In practice insufficient regulation of banks in the USA, the UK and throughout Western Europe clearly contributed to the recent Credit Crunch although it is clear that the then Labour Chancellor Gordon Brown must take some considerable responsibility for this in the case of the UK perhaps because he too espoused Neo-Liberal principles to some extent.  Critics argue that such government regulations help to ensure financial stability and to ensure health and safety at work and production of healthy food stuffs.

 

  • The Neo- Liberals believed also that the Welfare State had been over-extended. It was necessary for the Welfare State to continue to provide   a "safety net" of public services {Health, Education, Housing, Social Security, public Transport and Social Services} for those citizens who were unable to provide for them selves but the current organisation of the Welfare State was criticised for several reasons.
  1. It was expensive which implied high rates of taxation which would seriously erode incentives to work, save and invest and hence reduce the long term efficiency of the economy and ultimately the living standards of the population as a whole. There is a strong similarity here between neo-liberal beliefs and the functionalist theory of social stratification.
  2.  Its organisation was dominated by remote, unapproachable Welfare State professionals  such as doctors, teachers and social workers who provided the kinds of services which they considered to be necessary and not necessarily the services which were best for the society as a whole. Public sector Trade unions were also very powerful within the Welfare State and this could lead to over-manning and to economic inefficiency.
  3. Some Welfare State Social security provision was essential but it should be concerned with the relief of absolute rather than relative poverty. For the neo-liberals , economic inequality was both desirable and inevitable [as in the Functionalist theory of social stratification] and this implied that some relative poverty was also desirable and inevitable since in an economically unequal society there would inevitably be some people receiving lower than average incomes .
  4. The taxation and social security system , taken as a whole, had been an instrument of redistribution from the rich to the poor but the effects had been to weaken economic incentives for the rich and the comfortably off  which ultimately resulted in reduced living standards for the poor. Egalitarian taxation and social security policies resulted in increased equality via a levelling down of incomes whereas what was required were policies which might increase inequality but would also increase economic growth and enable some of the financial benefits of economic growth to "trickle down" to the poor. Furthermore it was argued by Professor Laffer that once taxation rates reached  a relatively high level individuals would adopt various legal methods to reduce their taxation bills so that higher rates of taxation actually resulted in reduced tax revenues and taxation revenues could be increased by reducing rates of taxation. He demonstrated his theory with the so-called Laffer Curve which , however, some economists cynically derided  although others certainly accept its validity. For example in his study "The State We're in [1995] Will Hutton argued strongly against the Laffer curve theory but a recent Times article supports it. Debates surrounding the possible disincentive effects of high income taxation received increasing coverage in the wake of the Coalition decision to reduce the highest rate of income tax from 50P to 45p. Click here for some additional information.
  5. The Social Security system had also been abused by many welfare recipients who were claiming benefits to which they were not actually entitled and the system was helping to create a dependency culture in which welfare recipients  came to depend more on State "hand outs " than on their own initiative which ,according especially to Charles Murray, was leading to the development of an increasingly unemployable underclass of welfare dependants .Click here for a critique of the notion of the dependency culture from Cambridge economist Ha-Joon Chang. [[NEW link added January 2013]

According to Neo-Liberals the over extended Welfare State had undermined the potential roles of private companies, charities and families in the provision of welfare. The New Right wished therefore wished to shift the mix of Welfare Pluralism away from state provision towards private commercial, charitable and informal provision by families , friends and neighbours. As a result  in the Thatcherite era:

  1. individuals were encouraged via preferential tax treatment to take out private pensions and private health insurance;
  2. the private education and health sectors expanded;
  3. large numbers of council houses were sold relatively cheaply to sitting tenants;
  4. services previously provided by Local Authorities such as old peoples' homes and home help services for the elderly, and hospital and school cleaning and catering services were increasingly provided by commercial , profit- making companies to whom Local Authorities now merely awarded contracts and then regulated the performance of the private sector companies;
  5. the Conservatives' Community Care initiative resulted in more elderly, disabled and mentally ill people being cared for by their own families.

The net effect of these changes was to reduce the size of the government welfare sector below what it would otherwise have been and hence to reduce the cost of welfare to the government which among other things should have facilitated reduced levels of taxation, especially income taxation.

New Right supporters of these initiatives argued also that they resulted in the reduction of the monopoly power of public sector providers and that commercial profit making companies could provide services more efficiently than could Local Authorities; that Care in the Community was preferable to long stays in hospitals or old peoples' homes and that the expansion of private health care, education, housing and pensions would enable government to spend more money providing services for those who could not afford private services.

Critics argued, conversely that commercial profit making companies would reduce the quality of services provided in the interests of greater profit; that the Community Care initiative was designed primarily to save government money while putting an excessive burden of care onto families, especially their female members and that as private healthcare, private education and private housing expanded, only a residual , poorly funded public sector would be available to meet the needs of those who could not afford private provision.

This process of residualisation of State Welfare implies that comfortably off individuals would increasingly own their own homes, rely upon private education or at least upon state schools in more prosperous areas (combined with their own additional expenditure on educational resources) and rely upon private health care where necessary and upon private pensions to supplement the increasingly inadequate state pension. Meanwhile, the poor would be obliged to rely upon run down council housing, local schools which despite their hard work find it difficult to provide a good education for local, mainly working class children, on a health service short of resources resulting in long waiting lists and on state pensions which fail to provide adequate living standards in old age.

Click here for a recent edition of Radio Four's Analysis entitled "The Deserving and the Undeserving Poor"

New Right supporters are committed supporters of the market mechanism as an effective means of resource allocation and they have also supported the introduction of so-called quasi-markets into government health and education services. In the case of education policy it is clear that parts of the 1988 Education Reform Act were influenced by New Right thinking.

  • The New Right, Neo-Liberalism and the Reduction of "Excessive" Trade Union Power

By the late 1970s critics of the trade unions in all political parties   argued increasingly that the trade unions had accumulated too much power. They had defeated proposed legislation of both Labour and Conservative Governments to curtail their powers [the 1969 In Place of Strife Whitepaper and the 1971 Industrial Relations Act]; the 1970-1974 Conservative Government had been faced with major strikes and it was at least arguable that the National Union of Mineworkers had brought down the Heath Government. Once Labour returned to power in 1974 the Trade unions were involved in the construction of the Social Contract [which according to some showed their excessive influence over Labour governments and according to others showed the exact opposite]  and the so-called Winter of Discontent was an important factor in Labour's General Election defeat of 1979.

It was widely believed also that the trade unions were at least partly responsible for the relatively slow growth of the UK economy: restrictive trade practices inhibited attempts to increase economic efficiency; even if statistical data showed that the UK was not especially strike prone by comparison with its main industrial competitors ,strikes resulted in industrial and social dislocation out of all proportion with the actually fairly low number of working days lost through strikes and the UK's reputation for industrial militancy was believed by some to be a factor which discouraged foreign investment and fuelled occasional runs on the .

According to the New Right therefore it was essential to devise policies to weaken the powers of the trade unions and this was achieved by the introduction of several restrictive trade union laws and by the high levels of unemployment in the 1980s which obviously restricted trade union bargaining power while the defeat of the National Union of Miners strike in 1984-5 represented an important symbolic defeat for militant trade unionism as a whole.

For theorists of the New Right, the Trade Unions were considered to be too powerful in the 1960s and 1970s but their power was certainly reined back as  a result of Conservative government policies introduced in the 1980s . However we must not automatically accept the New Right analysis of trade union power at face value since there are also other important analyses of trade union power.

  1. Thus for Pluralists, the power of the Trade Unions is limited by the existence of many other pressure groups which means that the distribution of political power is relatively widely and evenly distributed.
  2. For Marxists, the power of the Trade Unions is even more limited because in capitalist societies political power is held mainly by the Capitalist Class, even if indirectly.
  3. According to the supporters of the theory of Corporatism, government decision making especially in the 1960s and 1970s in the UK was dominated by Government itself operating with business interests and the Trade Unions which implied that the Trade Unions did have rather more power than suggested in Pluralist and Marxist theories but less power than suggested in New Right theory.
  • Dimensions of  Neo-Conservatism

It has been said that the ideology of the New Right contains a combination of neo-liberal and neo-conservative elements  which are in some respects  complementary and mutually reinforcing but in other respects generate tension and contradiction  within New Right ideology. As stated above the key elements of neo-liberal ideology are the defence of individual rationality and individual freedom , defence of laissez-faire in economic affairs, defence of economic inequality as natural, desirable and inevitable,  rejection of Keynesian methods of macroeconomic management due to their  ineffectiveness in dealing with simultaneous inflation and unemployment and opposition to high government spending especially on social security.

 Contrastingly the neo-conservative dimension within New Right ideology is similar in several respects to traditional conservatism and similar in some respects also to One Nation conservatism.  Neo-conservatives are critical of what they see as the excessive individualism implied by neo-liberalism.  Whereas classic liberals believe strongly in individual rationality and argue therefore in favour of the maximum degree of individual freedom which is compatible with the freedom of others, the neo conservative accepts the traditional conservative’s more pessimistic view of human nature which suggests that individuals are not always entirely rational and that they must learn to conform to the tried and trusted traditional norms and values of their society which are to be inculcated via the family, the church and the education system.  Furthermore governments have a very important role to play in the defence of the nation and the maintenance of internal social order. Whereas classic liberals are all in favour of free individualistic decision making, conservatives suggest that this kind of individualism is a recipe for near anarchy and that individual freedom, albeit limited, can best be guaranteed via respect for traditional norms, values and institutions.

 Neo-Conservatives support the maintenance or at most only gradual change in the existing social order which implies support for traditional sources of authority, traditional institutions and traditional values. They are therefore likely to be supporters of strong but limited government, the Monarchy and the Aristocracy, the Church, the traditional family and traditional education. They claim that traditional social patterns which have stood the test of time must have done so because they have been socially beneficial so that radical change is clearly undesirable.

 This neo-conservative support for traditional authority and only gradual social change leads them to support traditional approaches to law and order involving "appropriate" punishment rather than leniency; support for the traditional nuclear family involving support for traditional gender roles and opposition to divorce, abortion, single parenthood and same sex relationships; support for traditional religious beliefs and for respect for teacher authority within schools; opposition to "excessive " portrayal of sex and violence in the mass media and to drug abuse. Much of the neo-conservative support for traditional values in general  may be linked to their opposition to the liberal permissiveness of attitudes which they believe have become widespread in UK society especially since the 1960s.

 The neo-conservative support for traditional social order also encourages them to espouse what Andrew Heywood calls an “insular nationalism.” Their desire to protect what they see as British or even English culture leads them to oppose increased immigration and the spread of multiculturalism not because they are racists in the sense of believing that one “race” [remember the important distinctions between "race " and ethnicity] is superior to another but on the grounds that increased immigration and the growth of multiculturalism will dilute British culture and may result eventually in open racial and ethnic conflict. Furthermore they are likely also to adopt “Eurosceptic” positions critical of closer links with the EU and to oppose globalisation on the grounds that it will ultimately undermine the importance of the nation state.

Neo-conservatives see no need for changes in existing patterns of social and economic inequality. Some may continue to defend the remnants of the traditional aristocratic landed class and remember fondly an alleged golden age when the aristocracy symbolised British values and could be relied upon to defend the interests of the employees on the basis of “noblesse oblige” while the employees themselves could be relied upon to defer happily to their social superiors. Also as in the case of Roger Scruton [The Meaning of Conservatism 2001] they may regard equality of opportunity as an essentially meaningless idea on the grounds that since differences in academic ability are mainly genetically determined, it is pointless to provide opportunities to those who are incapable of taking them. [A very pessimistic view in my opinion.] 

  • The New Right: Combining Neo-Liberalism and Neo-Conservatism

There are ways in which neo-liberal and neo- conservative ideologies complement each other. Both strands of New Right ideology accept the existence of a basically capitalist system and its resultant economic inequalities  and oppose excessive expansion of state expenditure on welfare and it has been argued, most notably by Andrew Gamble,  that the New Right ideology   represents a combination of neo liberal support for the free market combined with neo-conservative support for the strong, authoritarian state which is necessary to make free market economics effective. Thus in order to increase the scope of the free market a strong state is necessary for several reasons:

  1. to reject political pressure from welfare pressure groups [such as the CPAG and Shelter] demanding increased welfare spending;
  2. to force through policies such as privatisation and trade union reform designed to increase economic efficiency;
  3. to strengthen the police which will be necessary in order to deal with militant industrial disputes and urban disorder which may arise out of neo-liberal policies;
  4. to campaign in support of the return of "traditional forms of social and political authority."

However there are also tensions within New Right ideology.

  1. In practice although neo-liberals wished to reduce government spending on social security, critics argued that their policies led  in practice to increased unemployment  which meant that total government spending on unemployment benefits increased considerably even though rates of social security benefit increase were restricted.
  2. Neo -liberal policies have led to a decline in working class communities for example in inner city areas and mining communities  and this may have resulted in declining support for traditional sources of authority which are supported by neo-conservatives.
  3. Neo-liberal policies may have resulted in increased poverty which may have undermined traditional family life which neo-conservatives support.
  4. Neo-liberal policies resulted in the legalisation of Sunday trading and the deregulation of gambling neither of which are supported by neo-conservatives.
  5. Neo-liberal policies may have encouraged increased gender equality in the work place and/or forced more women to enter employment in order to avoid family poverty. Neo-conservatives seek to preserve traditional gender roles.
  6. Neo-liberals would support the increased employment of married women on the grounds that it increases individual freedom and economic efficiency and they might also support pre-marital sexual relationships, more liberal divorce and abortion law, and same sex relationships while extreme neo-liberals [or right wing libertarians] would also support the legalisation of hard drugs and also. possibly, prostitution all as a means of enhancing individual freedom. We should note that this type of individualism would not be accepted by traditional and neo-conservatives who would argue for controls over individualism exercised via traditional institutions such as the family, the church and the education system and also by the state.

 

A very significant Marxist analysis of the nature of Thatcherism has been provided by Stuart Hall in his article entitled "The Great Moving Right Show. He agrees that Thatcherism contains both Neo-Liberal and Neo-Conservative elements  much as have been described above  but claims that the reasons why Thatcherite ideology proved popular  with working class voters are linked  with the failure of social democratic institutions to defend working class interests in the 1960s and 1970s , a failure which , from a Marxist point of view ,is inevitable.

Thus, according to Stuart Hall it is true that Keynesian methods of demand management failed to halt the growth of unemployment in the 1970s; true that the Welfare State failed to alleviate relative poverty; true that hospital waiting lists were lengthening; true that the education system had failed significantly to increase equality of opportunity; and true that increasing numbers of working class people were fearful of increasing crime in their area. Mrs. Thatcher's success was to focus on the limitations of social democracy and then to claim that the solutions  to the above problems can be found in the rejection of social democracy and the acceptance of the ideology of the New Right which Hall  summarises in the phrase "Authoritarian Populism": that is: the New Right taps into real popular discontent with social democracy and proposes solutions associated with Neo-Liberalism/Neo-Conservatism which are in several respects Authoritarian

In the Gramscian Marxist terms favoured by Stuart Hall the New Right ideology can certainly be seen as a variant of ruling class ideology designed to secure the hegemony of the capitalist class but it is important to note that Gramsci saw the achievement of hegemony as containing both material and ideological aspects

. According to Stuart Hall it is the fact that the ideology of the New Right draws on real popular discontent with then real limitation  of social democracy  which gives the New Right ideology particular force. For Marxists , of course, the hope is that the recognition of the limitations of social democracy and subsequently of New Right ideology itself would lead eventually to the transition to Socialism, a hope which 30 years after the publication of Stuart Hall's article still seems a long way from realisation.

Click here for Stuart Hall's The Great Moving Right Show

Click here for Stuart Hall's Gramsci and Us 

Interested students who require  amore detailed consideration of the concept of Authoritarian Populism [and indeed all aspects of Thatcherism] could consult "Thatcherism" [Bob Jessop, Kevin Bonnett, Simon Bromley and Tom Ling : Polity Press 1988]

  I have tried above to describe the key elements of Neo-Liberalism and Neo-Conservatism which are combined in the Thatcherite version of New Right ideology. All ideologies may be criticised from other ideological positions and I provide an outline below of some of the ideological criticisms of New Right ideology which have been made mainly from a broadly socialist perspective although some of these criticisms would be accepted to some extent by some liberals and moderate conservatives while of course New Right theorists themselves would reject these criticisms.

  • It is argued in New Right ideology that individual differences in talents and abilities are to some considerable extent inevitable because they are primarily genetically determined; that individuals are driven mainly be self-interest and that [in the Neo-Liberal strand of New Right thinking] they are the best judges of their own interests; and that in a free society with limited government the combination of the above conditions will result inevitably in unequal distribution of income and wealth. However differences in income and wealth are compatible with equality of opportunity and also desirable because they strengthen incentives to study, work, save and invest and thereby promote economic efficiency and growth from which all members of society [including the poor ] can benefit. Therefore the pursuit of individual self-interest is entirely compatible with the interests of society as a whole. However critics would reject these arguments for the following reasons.
    1. They would argue that differences in talents and abilities are determined to a considerable extent by environmental factors and that the social and economic inequalities supported by New Right theorists actually restrict the opportunities for the poorest members of society to develop their talents to the full: that is economic and social inequalities undermine equality of opportunity which means that they are unjust.
    2. Critics might agree that in capitalist societies individuals appear to be driven to a considerable extent by financial self- interest but claim that this is because they have been socialised into the acceptance of competitive capitalist values not because financial self-interest is in some way fundamental to human nature. In more equal societies  individuals would come to value collaboration rather than competition and to recognise that it results in greater human self-fulfillment.
    3. Economic inequalities may well be necessary to provide financial incentives under capitalism but in more equal collaborative societies individuals would be much more willing to work for the good of society as a whole rather than solely to further their own narrow financial self -interest.
    4. Even if economic inequalities do result in faster economic growth under capitalism the benefits of economic growth "trickle down" to the poor only to a  very limited extent such that economic inequalities remain entrenched which restricts equality of opportunity.  

 

  •  New Right theorists are strong supporters of private property and the capitalist market system on the grounds that private property helps to provide a defence of individual liberty and the capitalist market mechanism responds flexibly to meet the  demands of consumers  efficiently and cheaply. Contrastingly state socialist systems of production are seen as over-centralised, bureaucratic, inefficient and wasteful and nationalised industries as they operated in the UK were subject to similar criticisms all of which , according to New Right theorists strengthened the case for privatisation. Again several criticisms have been made of the operation in practice of the capitalist market mechanism.
    1. It is argued that patterns of consumer demand and hence patterns of output reflect the unequal distribution of income and wealth so that, for example, economic resources are channelled into the production of luxuries for the rich while the poor in many Third World countries go hungry and government services such as health, education and social services are under-resourced even in advanced capitalist countries.
    2. It is argued that capitalist firms use powerful advertising techniques to manufacture demand for their products which are essentially unnecessary while failing to meet the real needs of consumers for example for good, healthy, unadulterated food  and non-polluting energy and transport.
    3. It is argued that the real strength of capitalist competition is in fact far weaker than is suggested in simplified economic models of laissez faire such as the perfect competition model and that large capitalist firms  can often use their monopoly power to maintain high prices and profits in the long term. [However New Right theorists may defend high profitability on the grounds that high profits may to some extent be reinvested to promote greater economic efficiency.
    4. It is argued that capitalist firms take insufficient account of the societal financial and environmental consequences of the actions: witness the recent banking crisis and massive oil leaks off the coast of Louisiana which have at least to some extent called into question the long -term viability of capitalist neo-liberalism.

 

  • New Right theorists have rejected Keynesian approaches to macroeconomic management.

For much of the post-war period in the era of the so-called post war consensus both Labour and Conservative governments attempted to use Keynesian policies of macroeconomic management to maintain high levels of employment. Essentially it was argued that unemployment was caused mainly by a shortfall of aggregate monetary demand and that this aggregate monetary demand could be increased by a combination of fiscal and monetary measures [increases in government spending, reductions in taxation, reduced interest rates and increases in the money supply] which would have the effects of reducing unemployment. However by the 1970s it came to be argued by monetarist economists that Keynesian economic policies could only reduce unemployment as far as the so-called natural rate of unemployment and that any attempts to reduce unemployment below its natural rate would lead only to accelerating inflation. This was a view which was accepted by James Callaghan in a speech in 1976 [apparently written largely by his son-in law, the economics journalist Peter Jay] and led the Labour government to reduce its reliance on Keynesian methods.

It is then generally argued that Conservative governments under Mrs Thatcher distanced themselves even further from Keynesian methods and based their economic theories much more on monetarist policies embodied in the so-called Medium Term Financial Strategy which involved 4 yearly targets for government spending, government borrowing [as measured by the PSBR i.e. the public sector borrowing requirement], and the money supply although even by the early 1980s it was being suggested the the Conservatives were actually adopting a more pragmatic approach to economic policy and adhering less strictly to the dictates of monetarist theory.

Whatever the complexities of the economic debate it is the case that unemployment did rise very sharply under the Conservatives at the beginning of the 1980s. Mrs Thatcher and her supporters claimed that this was a price worth paying to reduce the rate of inflation  and increase the international competitiveness of the UK economy .The rate of inflation , after rising in 1979-1980 did fall as unemployment remained high into the late 1980s.There then followed a period of severe economic instability between 1988 and 1992 as unemployment first fell with a consequent rise in inflation followed by a rise in unemployment with a consequent fall in inflation. Following the exit of the UK from the ERM in 1992 we have had relative economic stability under both Conservative and Labour governments with steady economic growth , falling inflation and falling unemployment.  Supporters of Thatcherism argue that, in the final analysis, here economic policies were necessary to create the conditions for future economic stability and growth , a conclusion which is rejected by her critics. Unfortunately I cannot pursue these controversies any further at this point and interested students should consult the relevant Economics literature.]

  • New Right theorists have been critical of the what they believe to be the excessive growth and inefficient administration of the state in general and of the welfare state in particular.

They explain what they consider to be the excessive growth and inefficient administration of the state in general and the welfare state in particular in terms of public choice theory; they claim that the combination of high taxation and generous welfare benefits resulted in excessive economic equality which undermined incentives and economic growth and contributed to the development of a welfare dependent underclass.

Critics dispute these views. They argue that the conclusions of public choice theory are likely to be invalid because most state bureaucrats operate in accordance with a public service ethos which priorities the national interest rather than their own narrow self-interest; that attempts to increase economic equality can be justified in terms of fairness and greater equality of opportunity which itself will increase economic efficiency; and that the New Right version of Underclass theory [based mainly on the ideas of Charles Murray is flawed.

  1. The theory is said to overstate cultural differences in attitudes and values between members of the so-called underclass and the rest of society.
  2. The theory is said to understate the impact of structural forces such as the relocation of industrial production to low cost developing countries as factors influencing the growth of unemployment.
  3. Also according to many critics of the theory many members of the working class move in and out of poverty so that in effect no permanent underclass exists.
  • New Right theorists have argued that the trade unions were excessively powerful

New Right theorists have argued that the trade unions were excessively powerful and that their demands for excessive wage increases , their use of strike activity and restrictive practices  served to reduce the attractiveness of foreign investment into the UK and to restrict the UK rate of economic growth .Their power was especially visible in the Miners' Strike of 1973-74 and the Winter of Discontent 1978-79 which [allegedly] led indirectly to the falls of the Heath and Callaghan Governments respectively. However critics argue that there are many causes of slow economic growth; that Britain has never been an especially strike prone country; and that the outcome of General Elections  depends upon  a wide variety of factors  such that  if the Heath and Callaghan governments had been perceived as generally effective governments they would have won the respective General Elections. Also from a Marxist perspective it is argued that states in capitalist societies operate mainly in the interests of the dominant capitalist class which has far greater economic and political power than does the trade union movement.

  • Neo-Conservatives have argued in support of traditional sources of authority such as the Monarchy, the State [although its functions should be restricted] the Aristocracy and the Church , in support of traditional attitudes to morality and family life, in support of  national sovereignty as opposed to what they see as the excessive incursions of the EU into British life and against the growth of multiculturalism which they see as gradually undermining the British way of life. However critics would argue that traditional sources of authority help to underpin the political and economic inequalities which are against the interests of the mass of the people; that traditional forms of morality may in some cases restrict individuals' freedom to act as they see fit in their personal lives  [a criticism which Neo-liberals would also tend to accept]; that the Eurosceptic defence of national sovereignty prevents the UK from developing deeper relationships with the EU and the pooling of sovereignty which is essential if pan-European problems are to be resolved; and that the growth of multiculturalism should be welcomed in recognition of the rights of British ethnic minorities to celebrate their own cultures. 

 

  • In Conclusion

It is no simple matter to assess the actual validity of different ideological positions because to do so one would have to assess the extents to which individual government policies across the whole range of government activity have in practice been driven by governments' professed ideologies  and to quantify the effects of all policies which have been ideologically driven. To take only one policy area it might be generally agreed that taxation and social security policies have at different times been influenced by the ideologies of Social Democracy, One Nation Conservatism and the New Right: in each case we should need to assess the effects of these policies on economic equality, economic efficiency and economic growth, the extent to which any benefits of growth trickled down to the poor, whether a welfare -dependent underclass existed and if so how it was influenced by differing policies and how these differing policies affected equality of opportunity. Social researchers are of course still involved in the investigation of the practical effects of Thatcherite policies in every area of government.

My own interpretation of data on the comparative effects of differing ideological approaches to taxation and social security policies would not support the ideological claims of New Right theorists but they might claim in turn that this is because my own interpretations are also ideologically biased which leads on to questions as to whether biases in social research can ever be entirely avoided. But these are questions for another day and for another website author!

  • Additions September 2011 and January 2013

Click here  for Michael Portillo's  Radio Four two part series entitled Capitalism on Trial. Mr Portillo interviews both supporters and critics of the capitalist system but those who are familiar with Mr Portillo's own political career will not be surprised by his own conclusions. 

Click here for a review of "The Strange Non-Death of Neo-Liberalism [2011] by Colin Crouch

 

Some Further Links

A Beginner's Guide to Neoliberalism: series of podcasts from the New Economics Foundation [nef]  Very useful new link added September 2015.

A bibliographic review of Neoliberalism? [William Davies Podcast]

Link to BBC on Compassionate Conservatism

Link to useful information on New Right ideology applied to social policy

Click here  for Michael Portillo's  Radio Four two part series entitled Capitalism on Trial. Mr Portillo interviews both supporters and critics of the capitalist system but those who are familiar with Mr Portillo's own political career will not be surprised by his own conclusions.  [New Link added September 2011]

Click here for a socialist analysis of Neo-Liberalism by Chris Harman

Click here for  a video clip: "Capitalism: nothing to do with responsibility"  Marxist Historian Eric Hobsbawm in discussion with Jeremy Paxman

Click here for a critical assessment of the 1980s written by Andy Beckett in the Guardian

Click here for a critical assessment of Neo-Liberalism from George Monbiot. Click here for a detailed UNCTAD Report assessment of the impact of Neo-Liberalism  referenced in George Monbiot's article

Click here for After Neo-Liberalism: Analysing the Present by Stuart Hall, Doreen Massy and Michael Rustin NEW link added July 2013

Click here for Ideology in Politics: Reflections on Lady Thatcher's Legacy  : very significant informative, article by Sunder Katwala published by IPPR  NEW link added September 2013

Link to Various BBC News Items on Baroness Thatcher

Tory! Tory! Tory! Part One; Part Two ; Part Three

The following items were all published soon after the death of Baroness Thatcher

Guardian Interactive Presentation on the Life and Times of Margaret Thatcher

Click for Will Hutton, Michael Portillo and Andrew Rawnsley on the Life and Times of Margaret Thatcher [all from The Observer]

The Daily Telegraph on the Life and Times of Margaret Thatcher

The Independent on the Life and Times of Margaret Thatcher

The BBC on the Life and Times of Margaret Thatcher

Channel 4 on the Life and Times of Margaret Thatcher

The Guardian on the Life and Times of Margaret Thatcher

Margaret Thatcher : Potency and Paradox [Peter Riddell for Radio 4

Latest Links

Thinking Allowed: The Birth of Neo-Liberalism

Hayek. Friedman and the Birth of Neo-Liberal Politics [LSE Podcast]

Thinking Allowed: The Continuing Survival of  Neo-Liberal Economics?

Neo-Liberalism, crisis and the world system: an introduction. [This article has links to several other articles related to a conference organised by the University of York and Open Democracy]