THE IMPLOSION OF THE SECOND WAY MADE THATCHER/REAGAN NECESSARY:
The making of Margaret Thatcher: How the Iron Lady rose from obscurity to change Britain (Terrence Casey, 11 February, 2025, The Critic)
For the Conservative establishment, taking on the unions was madness. Harold Wilson and Ted Heath both suffered deep political wounds for trying just that. In their minds unions were unstoppable. Party Chairman Peter Thorneycroft was so distressed by what he saw as dangerous nonsense that he wanted every copy of Stepping Stones burned. Thatcher, Joseph, and crucially William Whitelaw, thought it brilliant, however, and it was integrated into Conservative policymaking. Resistance to these ideas from the Tory machinery remained strong, and progress in articulating policies was limited. When the crucial political moment came, though, Stepping Stones served to focus and clarify the Tories response.
The rise of Thatcherism must be grounded in the context of the seventies. The long-term record of poor economic performance, the period of relative decline, Britain as the sick man of Europe, undercut support for the status quo. The maladies that produced that decline were masked during the long postwar boom. When global economic crisis emerged, all these problems were exposed, and hence the country lurched from crisis to crisis. A miners’ strike in 1972 saw the lights going out and industry put on a three-day week — before the government capitulated. Another miners’ strike two years later saw more blackouts, more three-day weeks, and finally a gambit by Heath — the snap “Who governs Britain?” election, which he promptly lost. Yet Labour fared no better. Their Social Contract promised industrial peace in exchange for increases in spending, which was pushed to its postwar peak. However, so was inflation, hitting 25 per cent in 1975. A financing crisis followed, necessitating a loan from the IMF in 1976. Labour, now led by Jim Callaghan, was forced into deep spending cuts.
Inflation had fallen yet remained in the teens. Tightening the monetary supply to bring prices down was seen as an unacceptable threat to full employment, so Callaghan opted for an incomes policy, cajoling workers into capping wage growth at 5 per cent. With inflation over 10 per cent, this produced real declines in purchasing power. After two years of grudging cooperation, workers rebelled. The result was the Winter of Discontent, the wave of strikes sweeping the country in 1978-79. Strike followed upon strike throughout a frigid winter, the inconveniences, disruptions, and misery piling up upon the public. As those strikes were settled with increases well above 5 per cent, Callaghan’s economic policy was in tatters, and Labour’s electoral fortunes decimated for a generation.
The calamities of the decade provided political conditions amenable to transformative politics. Having the hardline approach to the unions advanced in Stepping Stones at hand proved most useful. Without it, the Tory Shadow Cabinet would likely have argued in circles over the appropriate response, as that is what they had done for the previous four years.