The wheel spins, the pendulum swings
J. Enoch Powell
THINKING THE UNTHINKABLE: THINK TANKS AND THE ECONOMIC COUNTER-REVOLUTION by Richard Cockett HarperCollins, £25, pp. 390 6 What a dust do I raise!', exclaimed the fly on the hub as the wheel whirled around. It is mightily difficult for the fly from its standpoint to gauge the relation- ship of cause and effect. Between the years of triumphant Keynesianism in the 1930s and the administration of Margaret Thatcher in the 1970s there was a tremendous swing of the pendulum of public opinion away from collectivism and welfarism towards economic liberalism and acceptance of the working of free market forces. All the while between those extrem- ities there rose and fell organisations, such as the Institute of Economic Affairs and the Centre for Policy Studies, which worked away explaining and promoting the operation and the blessings of a 'free econ- omy'.
It is a picture which Richard Cockett's remarkably well documented and organ- ised study has just displayed. The essential turning-point in the story is now, in retro- spect, visible as having been the U-turn of the Heath government away from that rising support for free market forces which characterised the 1960s, back towards the collectivism which had seemed an obligato- ry stance for all parties since the 1930s. The ensuing crushing defeats of the Conservative Party in 1974 and the long reign of Thatcherism in 1979-90 are now recognisable as the consequence. From the leadership change in the Conservative Party in 1975 until the General Election of 1979 there extended the halcyon age of the Centre for Policy Studies, which was busily and happily supplying the furnaces of Opposition with market-oriented policies. It is a story which the historian has brilliantly and excitingly reconstructed.
But there is another leaf to the diptych. That leaf exhibits all that enthusiasm doused by the impact of ministerial office, not to mention the professional civil service. It was the historic achievement of Margaret Thatcher that before the 1983 election she had insisted on imposing upon Cabinet, party and country the two neces- sary preconditions for the restoration of a free economy — 'monetarism' Call inflation is caused by governments') and the reform of trade union law. In her `middle passage' — the 1983 parliament with the aid and under the strictures of the Centre for Policy Studies and its associated `think tanks', Mrs Thatcher rolled the stone of Sisyphus to the top (or nearly the top) of this hill and lodged it there. The impracti- cable, the unthinkable, had become practi- cable and thinkable, and the dimensions and vocabulary of political debate had been permanently altered.
Permanently? A reader of Mr Cockett's narrative is assailed by doubts when invited to contemplate the final installation of economic liberalism in the chair of orthodoxy. One doubt was crystallised in a soliloquy of James Callaghan on the eve of his electoral defeat in 1979:
There are times, perhaps once every 30 years, when there is a sea change in politics. It then does not matter what the public wants and what it approves of. I suspect there is now such a sea change.
There had indeed been a 'sea change' in the assumptions and prejudices of politics during the half century between the forma- tion of the coalition government of 1931 and the defeat of Callaghan's administra- tion in 1979. Some of the components and symptoms of that sea change can be recorded and collected, and they are stud- ded with names like Hayek or Friedman.
Yes, there has been a swing of the pendulum; but a pendulum swings two ways. Another 'sea change' could obliterate the sandcastles of the Centre for Policy Studies and the Montpelerin Society as effortlessly as the sandcastles of J. M. Keynes and his bureaucratic acolytes have been obliterated.
But is there such a pendulum? I think that there may be, and I will offer reasons why.
First, an observation about human society. It is one aspect of the human condition that we are continuously engaged in testing the outer limits of the possible: foiled by one folly, we recoil to embrace its opposite. Persuaded that government cannot reconstruct society by dosing it with money, we react by banishing inflation, by privatising, by de-nationalising. But what when the remedies bring with them — as they always will — their own problems, their own version of mankind's 'divine discontent'?
There is a whole dimension of social life which economic liberalism, the operation of a self-adjusting market economy, Ignores. No fault of theirs; but the success- ful harbingers of economic liberalism have narrowed the scope of politics.
Take 'the British economy'. There is a word in that phrase which does not belong to economics, though it does belong to politics; and the word is 'British'. In order to expound and explore the working of a free market system, society has to be denuded of all but its economic content, and sooner or later the non-economic, which are not the least important, elements of human society discover that they are being ignored. That is when the trouble begins, when the pendulum swings back or, to use Callaghan's term, the 'sea change' happens.
It was a brave act of faith when the Austrian school of economists and its allies sallied forth in the 1930s to alter the appar- ently unalterable economic assumptions. They must not take it amiss, nor must the historian of how their endeavour succeeded against all the odds be appalled, if the crucial questions of politics in the coming era prove to concern themselves with the non-economic aspects of human nature. If there was a single event which planted the power to impose a liberal economy firmly in Prime Minister Thatcher's hands, it was the invasion and the re-taking of the Falk- land Islands. I liked what Patrick Jenkin wrote in acknowledging a 'think tank' report on the application of free market economics to the Health Service:
We have got to formulate a more rigorous, a more coherent and a more convincing philosophy if we are going to end up by doing more than just tinkering.
Alas for the 'rigorous, coherent and con- vincing' philosophy. Is that not the aspira- tion to apprehend human society in all its ramifications, which makes politics the `endless adventure'?
Previous page
