From David Harvey's A Brief History of Neoliberalism
Part 9 – General conditions and institutions behind the turn of the British public opinion towards neoliberalism
The construction of consent in Britain occurred in a very different way. What happened in Kansas was quite different from what happened in Yorkshire. The cultural and political traditions were very different. In Britain, there is no Christian right to speak of to be mobilized into a moral majority.
Corporate power there was little inclined to support overt political activism (its contributions to political parties were minimal), preferring instead to exercise influence through the networks of class and privilege that had long connected government, academia, the judiciary, and the permanent Civil Service (which at that time still maintained its tradition of independence) with the leaders of industry and finance.
The political situation was also radically different, given that the Labour Party had largely been constructed as an instrument of working-class power, beholden to strong and sometimes quite militant trade unions. Britain had consequently developed a far more elaborate and all-encompassing welfare state structure than would have ever been dreamed of in the US.
The commanding heights of the economy (coal, steel, automobiles) were nationalized, and a large proportion of the housing stock was in the public sector. And the Labour Party had, ever since the 1930s, built significant redoubts of power in the arena of municipal governance, with Herbert Morrison’s London County Council being in the vanguard from the 1930s onwards.
Social solidarities constructed through the union movement and municipal governance were strongly in evidence. Even when the Conservative Party took power for prolonged periods after the Second World War it largely refrained from any attempt at dismantling the welfare state it had inherited.
The Labour government of the 1960s had refused to send troops to Vietnam, thus saving the country from direct domestic traumas over participation in an unpopular war. After the Second World War, Britain had (albeit reluctantly and in some instances not without violent struggle and considerable prodding from the US) agreed to decolonization, and after the abortive Suez venture of 1956 gradually (and again often reluctantly) shed much of the mantle of direct imperial power.
The withdrawal of its forces east of Suez in the 1960s was an important signifier of this process. Thereafter, Britain largely participated as a junior partner within NATO under the military shield of US power. But Britain did continue to project a neocolonial presence throughout much of what had been its empire, and in so doing frequently tangled with other great powers (as, for example, in the bloody Nigerian civil war when Biafra attempted to secede).
The issue of Britain’s relations with and responsibilities towards its ex-colonies was often fraught, both at home and abroad. Neocolonial structures of commercial exploitation were often deepened rather than eradicated. But migratory currents from the ex-colonies towards Britain were beginning to bring the consequences of empire back home in new ways.
The most important residual of Britain’s imperial presence was the continuing role of the City of London as a centre of international finance. During the 1960s this became increasingly important as the UK moved to protect and enhance the position of the City with respect to the rising powers of globally oriented finance capital. This created a series of important contradictions.
The protection of finance capital (through interest rate manipulations) more often than not conflicted with the needs of domestic manufacturing capital (hence provoking a structural division within the capitalist class) and sometimes inhibited the expansion of the domestic market (by restricting credit). The commitment to a strong pound undermined the export position of UK industry and helped create balance of payments crises in the 1970s.
Contradictions arose between the embedded liberalism constructed within and the free market liberalism of London-based finance capital operating on the world stage. The City of London, the financial centre, had long favoured monetarist rather than Keynesian policies, and therefore formed a bastion of resistance to embedded liberalism.
The welfare state constructed in Britain after the Second World War was never to everyone’s liking. Strong currents of criticism circulated through the media (with the highly respected Financial Times in the lead), which were increasingly subservient to financial interests. Individualism, freedom, and liberty were depicted as opposed to the stifling bureaucratic ineptitude of the state apparatus and oppressive trade union power.
Such criticisms become widespread in Britain during the 1960s and became even more emphatic during the bleak years of economic stagnation during the 1970s. People then feared that Britain was becoming ‘a corporatist state, ground down to a gray mediocrity’.
The undercurrent of thought represented by Hayek constituted a viable opposition and had its advocates in the universities and even more importantly dominated the work of the Institute of Economic Affairs (founded in 1955), where Keith Joseph, later to be a key adviser to Margaret Thatcher, rose to public prominence in the 1970s. The foundation of the Centre for Policy Studies (1974) and the Adam Smith Institute (1976), and the increasing commitment of the press to neoliberalization during the 1970s, significantly affected the climate of public opinion.
The earlier rise of a significant youth movement (given to political satire) and the arrival of a freewheeling pop culture in the ‘swinging London’ of the 1960s both mocked and challenged the traditional structure of networked class relations.
Individualism and freedom of expression became an issue and a left-leaning student movement, influenced in many ways by the complexities of coming to terms with Britain’s entrenched class system as well as with its colonial heritage, became an active element within British politics, much as it did elsewhere in the movement of ’68. Its disrespectful attitude towards class privileges (whether of aristocrats, politicians, or union bureaucrats) was to ground the later radicalism of the postmodern turn. Scepticism about politics was to prepare the way for suspicion of all metanarratives.