The Six Legacies of Thatcherism

I spoke recently in Manchester at the April meeting of the Transpennine Working Group of the Conference of Socialist Economists ( and will do so again on the 15th May to the Leeds Taking Soundings group (, on the legacy of Thatcherism.  The result is a longer than expected draft paper on the subject (click here to read).

The first point made in the paper is that Thatcher’s legacy is easily over-stated, by both supporters and detractors.  The basic gist of the over-statement of Thatcher’s legacy is that she was responsible for neo-liberal reform in Britain, that either (to supporters) transformed UK competitiveness and overcame structural barriers to continued capitalist growth; or (to detractors) destroyed the industrial base, led to rising inequality and left the UK with intractable social and economic problems.  The paper rejects this analysis, arguing that neo-liberal reform in the UK started a long time prior to the Thatcher government’s of 1979-1990 and has continued apace since that time.  In this context, it is necessary to understand the particular contribution of Thatcherism as a ‘first phase’ in neo-liberal reform, concerned with deconstructing the social and institutional structures of post-war social democracy.  The succeeding part of the project, pushed through by New Labour was concerned with a ‘second phase’ in Neo-Liberalism, designed to recreate new social and institutional structures to contain some of the problems associated with Thatcherism/first-phase reform.

In this context I identify six major legacies from Thatcherism:

  1. A crisis in the neo-liberal project – by 1990 the most immediate legacy of Thatcherism was a crisis in the neo-liberal project she promoted.  The extension of market discipline had created long-term structural unemployment, rising inequality and the weaknesses in economic strategy undermined rather than strengthened the UK position in the international economy.  Rising social divisions, crime and fear of crime and a housing market collapse undermined Thatcher’s weak political coalition.
  2. A transformation in party politics – the way in which New Labour confronted this challenge completed the transformation of party political choice that had been underway since the Labour government of 1976 chose to implement neo-liberal reform under advice from the IMF.  New Labour uncritically accepted the discourse of globalisation as a structural reality and set about the promotion of social justice as a subordinate concern to the prior objective of ensuring the competitiveness of ‘capital operating in Britain’ (to use Jessop et al.’s phrase).  New Labour would extend privatisation into parts of the welfare state not touched by Thatcherism and would pursue a more comperehensive strategy to promote competitiveness, leaving inequality unchecked.
  3. The neo-liberal individual – Thatcher is often associated with the controversial statement that ‘there is no such thing as society’.  Ofcourse, this is a vacuous claim, but New Labour was in fact responsible for the pursuit of some of the individualism that Thatcher is more commonly associated with. Underpinning New Labour’s pursuit of neo-liberal reform was a concern to activate the unemployment, promote upward mobility and to inculcate a more competitive work force. The aim of the (mainly supply side) policies associated with this was to drive down competitiveness to the level of the individual. This was attempted however, in a much more sophisticated way than those under Thatcher. To see the results of this walk into a primary school classroom and look for evidence of targets, read a primary school report to identify an individual child’s targets and strategies for improvement.  Look at the desparate scrambling of University departments to make their graduates employable.  Talk to parents and listen to politicians.  The currency of the day is a logic of individual competitiveness expressed as a preference for aspiration, ambition and struggle for advantage in a social hierarchy that is much more unequal than it was in the 1970s. Whether we like it or not, we are all neo-liberal now.
  4. Widespread engagement with the financial markets – A simple point to make.  Think credit cards, mortgages, life insurance, pensions.  The breadth (i.e. the sheer proportion of the population) and depth (the extent to which our current and future livelihoods) of dependence on the financial sector is far greater than it was in the 1970s and this is directly attributable to policies of financial deregulation; the promotion of individual home ownership; the cheapening of wages etc.
  5. The fractured and unconscious working class – recent opinion polls undertaken for the British Social Attitudes Survey show a weakening of solidarity over time. They demonstrate a decreasing preference for welfare and increasing tendencies toward harshness in the welfare regime, and this is progressively more entrenched for younger age cohorts, with those born during and since the 1980s being the least generous in their disposition.  This tendency not only took shape in the Thatcher period in office, it accelerated during the rule of New Labour.  It is part of the explanation for why the current government is able to cut welfare benefits and increase (already harsh) conditionality at a time when we know poverty is accelerating and opportunities in the labour market are relatively scarce, and even working families are dependent on welfare because of the low level of wages.
  6. The economic position of Britain – I don’t make the argument fully in the paper but a sixth legacy relates to the repositioning of the UK economy in the global economy. It includes de-industrialisation, which again proceeded apace during but also after Thatcher’s decade in government, and has left the UK stuck with many uncompetitive, low pay and low skill equilibrium industries. This enhances our vulnerability to global market competition, and further exacerbates the problems above.  If I develop the paper further, I’ll be sure to include a fuller analysis of this.

If you are interested, and you want to know more, then come along to Taking Soundings on the At 6pm on Wednesday 15th May 2013, in AG10 Broadcasting Place, LMU, Woodhouse Lane, Leeds.


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