Strange Rebels: 1979 and the Birth of the 21st Century (30 page)

Callaghan’s strategy was to depict Thatcher as an unbalanced radical whose extremist experiments would damage the gradual restoration of British economic fortunes that he claimed was already under way. Thatcher, in response, was careful not to be too specific with her promises. The 1979 Conservative election manifesto began by declaring that “the balance of our society has been increasingly tilted in favor of the State at the expense of individual freedom” and warned that “this may be the last chance we have to reverse that process.” The Tories pledged to fight back by cutting spending and tightening the money supply. The manifesto promised moderate curbs on union power, such as wider use of secret ballots and a law to prevent the spread of closed-shop rules (which imposed union membership on all the employees of a particular company). It vowed to reduce tax burdens and to prevent the government from taking over still more industries (the only hint of privatization was a mention of selling some shares in recently nationalized companies back to their employees). It also included calls for law and order and a strong national defense. It was a clear contrast to the programs offered by Labour and the Liberals, but it was hardly the stuff of revolution. The election campaign showed her to be a cautious, calculating, and eminently practical campaigner. She knew what she had to do.

In the end it all worked to her advantage. Voters wanted change; they merely had to be persuaded to take the chance. Thatcher was ready to help them. In 1968 Richard Nixon had decided to play on the discontent of conservative southern Democrats in an effort to woo them into voting Republican. Now the British Conservative
Party tried something similar, launching an unprecedented campaign to persuade Labour voters that their party no longer stood for their values. Many were ready to listen. In the final days of the campaign, Thatcher spoke stirringly of a “world-wide revolt against big government, excessive taxation and bureaucracy,” of an era “drawing to a close.”
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Little did she know that, at about the same time, Callaghan had reached a similar conclusion. He confided to one of his aides that they were witnessing “a sea change” in politics, an epochal shift of a kind that comes along once in a generation—and this time “it is for Mrs. Thatcher.” But this, of course, was a private thought. In public, he showed no lack of resolve.

She was an odd phenomenon in so many ways, this Thatcher. She ran a party that still bore the imprint of her predecessor as party leader, Edward Heath. The Conservative election manifesto in 1979 did not differ conspicuously from the program on which the party had campaigned under Heath in 1970. Most of the members of her shadow cabinet had served in comparable positions under Heath. The voters still didn’t really know her, and she did not spend much time lingering over her own biography. She never managed to raise her personal popularity to the level of Callaghan’s; indeed, the gap was increasing as the election neared.

Her image makers were all too aware of the problem. As election day neared, they did their best to keep her voice off the airwaves. They also staged photo opportunities carefully designed to make her look as unthreatening as possible—perhaps most famously when she traveled to a farm and hefted a newborn calf for the photographers. Though Thatcher later became famous for her domineering manner, during the 1979 campaign she was happy to yield to the advice of her handlers. In stark contrast to Keith Joseph, her volatile mentor, Thatcher never forgot for a moment that she was above all a politician. And not only did she know how to play the game, but she was determined to be better at it than anyone else.

But she was, of course, hardly a typical Tory politician. Her gender was not the only thing that made her unique. It was also her unapologetic commitment to the ideals of freedom. In her last major speech before the election, in her constituency in the London suburb of Finchley, she made her priorities unmistakably clear. “Of course it has been about prices and jobs and standard of living and all the economic things, but this election is about even more than the cost of the shopping basket,” she told her audience. “It really is about our fundamental freedoms and the future of our whole way of life in this country.” She stressed the need to end the long erosion of personal freedom, to halt the breakneck growth of the state. “Ladies and gentlemen, we are not prepared to accept decline for Britain as inevitable. We wish to change it and we will shall change it!” She cited the long list of former Labour
grandees who had recently gone public with their denunciation of the Labour Party and once again ran through the Conservative blueprint for containing inflation, cutting taxes, restraining union power, and restoring the preconditions for an “enterprise society.” And she wound it up by returning to her favorite theme. “Much of politics is fought about what you might call the economic factors or the material factors, and sometimes too little attention is given to the moral factors,” she told her audience. “But you know, in the end, it’s the moral factors which decide the status and pride of a nation.” And that “moral case,” she informed them, “is on the side of the free society.” The choice that Britain now faced was one between a freer state that ensured personal liberties and economic initiative—or the one envisioned by Labour, where the state played an ever-increasing role. This was not the voice of Britain’s postwar consensus. This was something verifiably new.
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T
he ideas that Thatcher broached in her 1979 campaign speeches promised change to British voters precisely because few British politicians before her had spoken with such ringing conviction about the challenge to freedom posed by a growing state. But the ideas themselves, as Thatcher well knew, had been around for some time.

In 1947, two years after Britain’s march to New Jerusalem began, a group of thirty-six thinkers—economists, historians, journalists, and philosophers—met at a Swiss resort to discuss the fate of Western society. They were all devotees of classical liberal economics, and they were united by a fear that freedom was under threat. The source of that threat was the spirit of collectivism that they saw in the beginnings of the British welfare state, the prevalence of socialist thinking, and the onset of the Keynesian economic revolution. The man who had convened them was an Austrian economist, Friedrich von Hayek, who taught at the London School of Economics (LSE). (He knew Keynes well. During the war, when Hayek was lecturing at Cambridge, he had shared fire-warden duties with his celebrated counterpart.) Hayek was particularly worried about the way that his academic colleagues had provided intellectual support for wartime planning that concentrated economic decision making in the state. A few years earlier he had published a book called
The Road to Serfdom
, an articulate polemic about the perils of liberty in a world where planners increasingly reigned. Most of those in the British establishment dismissed the book’s ideas. (That did not stop it from becoming a surprise best-seller in the United States.)

Most of the men—and they were, in fact, all men—who came together to form the Mont Pèlerin Society (named after the resort where they met) drew their
intellectual sustenance from three particular universities: the London School of Economics, the University of Chicago, and the University of Vienna. It was these three universities that would deliver many of the crucial theoretical and academic underpinnings for the liberal counterrevolution the new society hoped to unleash. Among the men present were Milton Friedman, Ludwig von Mises, and Karl Popper—each of whom would help to reshape twentieth-century discourse about political liberty and market economics in the decades to come. Hayek opened the meeting with an address in which he asserted that “a great intellectual task must be performed” if the ideals of liberty were to be revived. That task, he said, involved “both purging traditional liberal theory of certain accidental accretions which have become attached to it in the course of time, and also facing up to some real problems which an over-simplified liberalism has shirked or which have become apparent only since it has turned into a stationary and rigid creed.”
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The participants passed a broad manifesto pledging to defend the values of an open society, combat the encroachments of totalitarianism, and search for ways to guarantee a stable and peaceful international order. Its statement of aims concluded with the assurance that the group rejected “propaganda” and had no intention of establishing a new orthodoxy to replace the ones it denounced. The drafters also denied any particular partisan affiliation. Their object, they said, was “solely, by facilitating the exchange of views among minds inspired by certain ideals and broad conceptions held in common, to contribute to the preservation and improvement of the free society.”
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This might have seemed like a decidedly modest agenda. But the attendees at the conference felt themselves to be intellectual outcasts. In the postwar United States, the principles of New Deal interventionism and wartime bureaucratic management still reigned supreme. Hayek loved to tell a story about West Germany’s top economic bureaucrat, Ludwig Erhard, who had decided in 1948 to free all prices and production controls overnight, thereby unleashing the postwar economic miracle. Academic economists throughout the English-speaking world pooh-poohed the decision. According to Hayek, Erhard had received a phone call from Lucius Clay, the US general in charge of administering still-occupied Germany, who informed him that “‘my advisers tell me you are making a great mistake.’ Erhard replied, ‘So my advisers are also telling me.’”
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In fact, of course, the radical reforms launched by Erhard had placed Germany on the path to an extraordinary economic revival.

It struck the Pèlerins as ironic that Britain, given its role as the birthplace of classical liberalism, was the place where their ideological crusade against statism faced its biggest uphill climb. Labour’s cradle-to-grave welfare state was sweeping
all before it; the younger generation in the Conservative Party, led by R. A. Butler, believed that the Tories should yield to the spirit of the times.

Among those who disagreed was a British businessman who proved to be a key personality in this struggle. He was not a particularly distinguished academic, nor was he a notably adept politician. He was, instead, a hybrid of the two, and his name was Anthony Fisher.

Much later Milton Friedman would refer to him as “the single most important person in the development of Thatcherism.” While Hayek and his scholarly colleagues appreciated the “seminal importance of ideas,” in the words of journalist Richard Cockett, it was the businessman Fisher who figured out the most effective means for spreading those ideas far beyond the precincts of academe.
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Fisher brought to this effort his remarkable skills as an entrepreneur. After earning a degree in engineering at Trinity College, Cambridge, he had shown a knack for business by opening his own car rental company in the late 1930s. During the war he made a name for himself with inventions for the Royal Air Force, and once it was over he went back into business—this time, oddly enough, in farming, at which he became a tremendous success. Like many others, he was deeply impressed by Hayek’s
Road to Serfdom
, and a few years after the war’s end he sought out the author for advice. Fisher wanted to contribute to the fight against socialism. Hayek advised him to forget about a career in politics. What was needed, he said, was a “scholarly research organization” that could argue the case for free-market economics and disseminate its conclusions to the broadest possible audience.
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In 1955, Fisher, with the help of some like-minded colleagues, founded the Institute for Economic Affairs. In its structure and its mission, the IEA was explicitly modeled after the Fabian Society. Founded in 1884, the Fabian Society was the brainchild of early British socialists who wanted to make the country more receptive to their ideas. As part of their effort, they had recruited wealthy patrons to sponsor professors at the LSE, who propagated the group’s moderate socialist thinking among the nation’s elites. “Socialism was spread in this way and it is time we reversed the process,” Fisher wrote to one of his colleagues.
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Fisher was content to be the institute’s author and patron, but he did not want to be responsible for its day-to-day management. He needed a director, and he soon found the perfect man in Ralph Harris, who had worked briefly for the Conservative Party’s think tank before taking a job as a lecturer in political economy at the University of St. Andrews in Scotland. Harris had flirted briefly with politics, having campaigned for the Conservative Party candidate in the elections in 19 51 and 1955, but Fisher insisted that he abandon his Conservative affiliation when
he joined the IEA, since Fisher believed that the institute’s work would be more effective if it stayed clear of overt party ties. (The desire to preserve the institute’s charitable status presumably had something to do with it as well.)

Fisher, understanding that what the Communists referred to as “propaganda and agitation” stood at the center of the IEA’s mission, attributed great importance to the institute’s publishing effort, so he did not stint when it came to finding a suitable figure to run it. The man he found was Arthur Seldon. Like Harris, Seldon was of working-class origins, but in contrast to the IEA director, he had started off his political life, during his East End upbringing during the Great Depression, as a convinced socialist. (In this respect, and like quite a few of the other intellectual progenitors of Thatcherism, his ideological evolution presaged that of the American neoconservatives who emerged in the Reagan era and its aftermath. Many of them, too, had started off as members of the dogmatic Left before finding their way to the Republicans.) Seldon had undergone his own conversion when he began reading Hayek and other liberal thinkers at the LSE just before the war.
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