The New Right and Thatcherism

Click here  for Michael Portillo's  Radio Four two part series entitled Capitalism on Trial. Mr Portillo interviews both supporters and critics of the capitalist system but those who are familiar with Mr Portillo's own political career will not be surprised by his own conclusions.  [New Link added September 2011]

Click here for a socialist analysis of Neo-Liberalism by Chris Harman

• Introduction

1. They believed  that the growth of the public sector had arisen to a considerable extent because successive governments, both Labour and Conservatives , had increased public spending partly to placate powerful interest groups, most especially the public sector trade unions and professional associations but also in an attempt to "buy votes" to secure electoral victory. The outcome was a situation of "government overload" whereby government was unable to meet its increased commitments without damage to the private sector of the economy.
2. The growth of the public sector had starved the private sector of resources which resulted in low private investment and reduced international competitiveness and in slow growth of exports and increased imports which obviously would result in balance of payments problems.
3. They pointed out that the growth of the private sector required higher taxation and/or increased government borrowing but believed that higher taxation   undermined incentives to work, save and invest and that increased government borrowing was potentially inflationary.
4. They argued that the Keynesian approach to the macroeconomic management was misguided primarily because attempts to maintain high levels of employment via high levels of government spending and /or reduced taxation had resulted in higher rates of inflation which in turn would lead to more unemployment, for example due to the decline in competitiveness caused by the higher rate of inflation. [The New Right critique of Keynesian economics raises some difficult issues of economic theory which cannot be considered here in any detail. Essentially New Right theorists were influenced by the monetarist theories of economists such as Milton Friedman who argued that inflation was to be  controlled via control of the money supply and that any attempt to run an economy at less than the natural rate of unemployment would inevitably result in accelerating inflation.]

• Neo-liberals believed that nationalised industries were inefficient. They were poorly managed because managers knew that if they made financial losses these could be offset by government subsidies so that the managers' incentive to increase efficiency was much reduced with the result that individuals were obliged to pay higher taxes  to help finance nationalised industries' losses and these high taxes reduced individual financial incentives to work, save and invest. The answer, therefore was that nationalised industries should be privatised, thus extending the scope of the private sector and reducing the need for high rates of taxation both of which would, according to the neo-liberals, increase economic efficiency.

• Furthermore the Neo-Liberals are strong supporters of financial and industrial deregulation within the private sector believing that excessive government regulation inhibits financial and industrial efficiency.  In practice insufficient regulation of banks in the USA, the UK and throughout Western Europe clearly contributed to the recent Credit Crunch although it is clear that the then Labour Chancellor Gordon Brown must take some considerable responsibility for this in the case of the UK perhaps because he too espoused Neo-Liberal principles to some extent.  Critics argue that such government regulations help to ensure financial stability and to ensure health and safety at work and production of healthy food stuffs.

• The Neo- Liberals believed also that the Welfare State had been over-extended. It was necessary for the Welfare State to continue to provide   a "safety net" of public services {Health, Education, Housing, Social Security, public Transport and Social Services} for those citizens who were unable to provide for them selves but the current organisation of the Welfare State was criticised for several reasons.

1. It was expensive which implied high rates of taxation which would seriously erode incentives to work, save and invest and hence reduce the long term efficiency of the economy and ultimately the living standards of the population as a whole. There is a strong similarity here between neo-liberal beliefs and the functionalist theory of social stratification.
2.  Its organisation was dominated by remote, unapproachable Welfare State professionals  such as doctors, teachers and social workers who provided the kinds of services which they considered to be necessary and not necessarily the services which were best for the society as a whole. Public sector Trade unions were also very powerful within the Welfare State and this could lead to over-manning and to economic inefficiency.
3. Some Welfare State Social security provision was essential but it should be concerned with the relief of absolute rather than relative poverty. For the neo-liberals , economic inequality was both desirable and inevitable [as in the Functionalist theory of social stratification] and this implied that some relative poverty was also desirable and inevitable since in an economically unequal society there would inevitably be some people receiving lower than average incomes .
4. The taxation and social security system , taken as a whole, had been an instrument of redistribution from the rich to the poor but the effects had been to weaken economic incentives for the rich and the comfortably off  which ultimately resulted in reduced living standards for the poor. Egalitarian taxation and social security policies resulted in increased equality via a levelling down of incomes whereas what was required were policies which might increase inequality but would also increase economic growth and enable some of the financial benefits of economic growth to "trickle down" to the poor. Furthermore it was argued by Professor Laffer that once taxation rates reached  a relatively high level individuals would adopt various legal methods to reduce their taxation bills so that higher rates of taxation actually resulted in reduced tax revenues and taxation revenues could be increased by reducing rates of taxation. He demonstrated his theory with the so-called Laffer Curve which , however, some economists cynically derided  although others certainly accept its validity. For example in his study "The State We're in [1995] Will Hutton argued strongly against the Laffer curve theory but a recent Times article supports it.
5. The Social Security system had also been abused by many welfare recipients who were claiming benefits to which they were not actually entitled and the system was helping to create a dependency culture in which welfare recipients  came to depend more on State "hand outs " than on their own initiative which ,according especially to Charles Murray, was leading to the development of an increasingly unemployable underclass of welfare dependants .

According to Neo-Liberals the over extended Welfare State had undermined the potential roles of private companies, charities and families in the provision of welfare. The New Right wished therefore wished to shift the mix of Welfare Pluralism away from state provision towards private commercial, charitable and informal provision by families , friends and neighbours. As a result  in the Thatcherite era:

1. individuals were encouraged via preferential tax treatment to take out private pensions and private health insurance;
2. the private education and health sectors expanded;
3. large numbers of council houses were sold relatively cheaply to sitting tenants;
4. services previously provided by Local Authorities such as old peoples' homes and home help services for the elderly, and hospital and school cleaning and catering services were increasingly provided by commercial , profit- making companies to whom Local Authorities now merely awarded contracts and then regulated the performance of the private sector companies;
5. the Conservatives' Community Care initiative resulted in more elderly, disabled and mentally ill people being cared for by their own families.

The net effect of these changes was to reduce the size of the government welfare sector below what it would otherwise have been and hence to reduce the cost of welfare to the government which among other things should have facilitated reduced levels of taxation, especially income taxation.

New Right supporters of these initiatives argued also that they resulted in the reduction of the monopoly power of public sector providers and that commercial profit making companies could provide services more efficiently than could Local Authorities; that Care in the Community was preferable to long stays in hospitals or old peoples' homes and that the expansion of private health care, education, housing and pensions would enable government to spend more money providing services for those who could not afford private services.

Critics argued, conversely that commercial profit making companies would reduce the quality of services provided in the interests of greater profit; that the Community Care initiative was designed primarily to save government money while putting an excessive burden of care onto families, especially their female members and that as private healthcare, private education and private housing expanded, only a residual , poorly funded public sector would be available to meet the needs of those who could not afford private provision.

This process of residualisation of State Welfare implies that comfortably off individuals would increasingly own their own homes, rely upon private education or at least upon state schools in more prosperous areas (combined with their own additional expenditure on educational resources) and rely upon private health care where necessary and upon private pensions to supplement the increasingly inadequate state pension. Meanwhile, the poor would be obliged to rely upon run down council housing, local schools which despite their hard work find it difficult to provide a good education for local, mainly working class children, on a health service short of resources resulting in long waiting lists and on state pensions which fail to provide adequate living standards in old age.

Click here for a recent edition of Radio Four's Analysis entitled "The Deserving and the Undeserving Poor"

New Right supporters are committed supporters of the market mechanism as an effective means of resource allocation and they have also supported the introduction of so-called quasi-markets into government health and education services. In the case of education policy it is clear that parts of the 1988 Education Reform Act were influenced by New Right thinking.

• The New Right, Neo-Liberalism and the Reduction of "Excessive" Trade Union Power

By the late 1970s critics of the trade unions in all political parties   argued increasingly that the trade unions had accumulated too much power. They had defeated proposed legislation of both Labour and Conservative Governments to curtail their powers [the 1969 In Place of Strife Whitepaper and the 1971 Industrial Relations Act]; the 1970-1974 Conservative Government had been faced with major strikes and it was at least arguable that the National Union of Mineworkers had brought down the Heath Government. Once Labour returned to power in 1974 the Trade unions were involved in the construction of the Social Contract [which according to some showed their excessive influence over Labour governments and according to others showed the exact opposite]  and the so-called Winter of Discontent was an important factor in Labour's General Election defeat of 1979.

It was widely believed also that the trade unions were at least partly responsible for the relatively slow growth of the UK economy: restrictive trade practices inhibited attempts to increase economic efficiency; even if statistical data showed that the UK was not especially strike prone by comparison with its main industrial competitors ,strikes resulted in industrial and social dislocation out of all proportion with the actually fairly low number of working days lost through strikes and the UK's reputation for industrial militancy was believed by some to be a factor which discouraged foreign investment and fuelled occasional runs on the £.

According to the New Right therefore it was essential to devise policies to weaken the powers of the trade unions and this was achieved by the introduction of several restrictive trade union laws and by the high levels of unemployment in the 1980s which obviously restricted trade union bargaining power while the defeat of the National Union of Miners strike in 1984-5 represented an important symbolic defeat for militant trade unionism as a whole.

For theorists of the New Right, the Trade Unions were considered to be too powerful in the 1960s and 1970s but their power was certainly reined back as  a result of Conservative government policies introduced in the 1980s . However we must not automatically accept the New Right analysis of trade union power at face value since there are also other important analyses of trade union power.

1. Thus for Pluralists, the power of the Trade Unions is limited by the existence of many other pressure groups which means that the distribution of political power is relatively widely and evenly distributed.
2. For Marxists, the power of the Trade Unions is even more limited because in capitalist societies political power is held mainly by the Capitalist Class, even if indirectly.
3. According to the supporters of the theory of Corporatism, government decision making especially in the 1960s and 1970s in the UK was dominated by Government itself operating with business interests and the Trade Unions which implied that the Trade Unions did have rather more power than suggested in Pluralist and Marxist theories but less power than suggested in New Right theory.

• Dimensions of  Neo-Conservatism

It has been said that the ideology of the New Right contains a combination of neo-liberal and neo-conservative elements  which are in some respects  complementary and mutually reinforcing but in other respects generate tension and contradiction  within New Right ideology. As stated above the key elements of neo-liberal ideology are the defence of individual rationality and individual freedom , defence of laissez-faire in economic affairs, defence of economic inequality as natural, desirable and inevitable,  rejection of Keynesian methods of macroeconomic management due to their  ineffectiveness in dealing with simultaneous inflation and unemployment and opposition to high government spending especially on social security.

 Contrastingly the neo-conservative dimension within New Right ideology is similar in several respects to traditional conservatism and similar in some respects also to One Nation conservatism.  Neo-conservatives are critical of what they see as the excessive individualism implied by neo-liberalism.  Whereas classic liberals believe strongly in individual rationality and argue therefore in favour of the maximum degree of individual freedom which is compatible with the freedom of others, the neo conservative accepts the traditional conservative’s more pessimistic view of human nature which suggests that individuals are not always entirely rational and that they must learn to conform to the tried and trusted traditional norms and values of their society which are to be inculcated via the family, the church and the education system.  Furthermore governments have a very important role to play in the defence of the nation and the maintenance of internal social order. Whereas classic liberals are all in favour of free individualistic decision making, conservatives suggest that this kind of individualism is a recipe for near anarchy and that individual freedom, albeit limited, can best be guaranteed via respect for traditional norms, values and institutions.

 Neo-Conservatives support the maintenance or at most only gradual change in the existing social order which implies support for traditional sources of authority, traditional institutions and traditional values. They are therefore likely to be supporters of strong but limited government, the Monarchy and the Aristocracy, the Church, the traditional family and traditional education. They claim that traditional social patterns which have stood the test of time must have done so because they have been socially beneficial so that radical change is clearly undesirable.

 This neo-conservative support for traditional authority and only gradual social change leads them to support traditional approaches to law and order involving "appropriate" punishment rather than leniency; support for the traditional nuclear family involving support for traditional gender roles and opposition to divorce, abortion, single parenthood and same sex relationships; support for traditional religious beliefs and for respect for teacher authority within schools; opposition to "excessive " portrayal of sex and violence in the mass media and to drug abuse. Much of the neo-conservative support for traditional values in general  may be linked to their opposition to the liberal permissiveness of attitudes which they believe have become widespread in UK society especially since the 1960s.

 The neo-conservative support for traditional social order also encourages them to espouse what Andrew Heywood calls an “insular nationalism.” Their desire to protect what they see as British or even English culture leads them to oppose increased immigration and the spread of multiculturalism not because they are racists in the sense of believing that one “race” [remember the important distinctions between "race " and ethnicity] is superior to another but on the grounds that increased immigration and the growth of multiculturalism will dilute British culture and may result eventually in open racial and ethnic conflict. Furthermore they are likely also to adopt “Eurosceptic” positions critical of closer links with the EU and to oppose globalisation on the grounds that it will ultimately undermine the importance of the nation state.

Neo-conservatives see no need for changes in existing patterns of social and economic inequality. Some may continue to defend the remnants of the traditional aristocratic landed class and remember fondly an alleged golden age when the aristocracy symbolised British values and could be relied upon to defend the interests of the employees on the basis of “noblesse oblige” while the employees themselves could be relied upon to defer happily to their social superiors. Also as in the case of Roger Scruton [The Meaning of Conservatism 2001] they may regard equality of opportunity as an essentially meaningless idea on the grounds that since differences in academic ability are mainly genetically determined, it is pointless to provide opportunities to those who are incapable of taking them. [A very pessimistic view in my opinion.] 

• The New Right: Combining Neo-Liberalism and Neo-Conservatism

There are ways in which neo-liberal and neo- conservative ideologies complement each other. Both strands of New Right ideology accept the existence of a basically capitalist system and its resultant economic inequalities  and oppose excessive expansion of state expenditure on welfare and it has been argued, most notably by Andrew Gamble,  that the New Right ideology   represents a combination of neo liberal support for the free market combined with neo-conservative support for the strong, authoritarian state which is necessary to make free market economics effective. Thus in order to increase the scope of the free market a strong state is necessary for several reasons:

1. to reject political pressure from welfare pressure groups [such as the CPAG and Shelter] demanding increased welfare spending;
2. to force through policies such as privatisation and trade union reform designed to increase economic efficiency;
3. to strengthen the police which will be necessary in order to deal with militant industrial disputes and urban disorder which may arise out of neo-liberal policies;
4. to campaign in support of the return of "traditional forms of social and political authority."

However there are also tensions within New Right ideology.

1. In practice although neo-liberals wished to reduce government spending on social security, critics argued that their policies led  in practice to increased unemployment  which meant that total government spending on unemployment benefits increased considerably even though rates of social security benefit increase were restricted.
2. Neo -liberal policies have led to a decline in working class communities for example in inner city areas and mining communities  and this may have resulted in declining support for traditional sources of authority which are supported by neo-conservatives.
3. Neo-liberal policies may have resulted in increased poverty which may have undermined traditional family life which neo-conservatives support.
4. Neo-liberal policies resulted in the legalisation of Sunday trading and the deregulation of gambling neither of which are supported by neo-conservatives.
5. Neo-liberal policies may have encouraged increased gender equality in the work place and/or forced more women to enter employment in order to avoid family poverty. Neo-conservatives seek to preserve traditional gender roles.
6. Neo-liberals would support the increased employment of married women on the grounds that it increases individual freedom and economic efficiency and they might also support pre-marital sexual relationships, more liberal divorce and abortion law, and same sex relationships while extreme neo-liberals [or right wing libertarians] would also support the legalisation of hard drugs and also. possibly, prostitution all as a means of enhancing individual freedom. We should note that this type of individualism would not be accepted by traditional and neo-conservatives who would argue for controls over individualism exercised via traditional institutions such as the family, the church and the education system and also by the state.

• The New Right and Authoritarian Populism

A very significant Marxist analysis of the nature of Thatcherism has been provided by Stuart Hall in his article entitled "The Great Moving Right Show. He agrees that Thatcherism contains both Neo-Liberal and Neo-Conservative elements  much as have been described above  but claims that the reasons why Thatcherite ideology proved popular  with working class voters are linked  with the failure of social democratic institutions to defend working class interests in the 1960s and 1970s , a failure which , from a Marxist point of view ,is inevitable.

Thus, according to Stuart Hall it is true that Keynesian methods of demand management failed to halt the growth of unemployment in the 1970s; true that the Welfare State failed to alleviate relative poverty; true that hospital waiting lists were lengthening; true that the education system had failed significantly to increase equality of opportunity; and true that increasing numbers of working class people were fearful of increasing crime in their area. Mrs. Thatcher's success was to focus on the limitations of social democracy and then to claim that the solutions  to the above problems can be found in the rejection of social democracy and the acceptance of the ideology of the New Right which Hall  summarises in the phrase "Authoritarian Populism": that is: the New Right taps into real popular discontent with social democracy and proposes solutions associated with Neo-Liberalism/Neo-Conservatism which are in several respects Authoritarian

In the Gramscian Marxist terms favoured by Stuart Hall the New Right ideology can certainly be seen as a variant of ruling class ideology designed to secure the hegemony of the capitalist class but it is important to note that Gramsci saw the achievement of hegemony as containing both material and ideological aspects

. According to Stuart Hall it is the fact that the ideology of the New Right draws on real popular discontent with then real limitation  of social democracy  which gives the New Right ideology particular force. For Marxists , of course, the hope is that the recognition of the limitations of social democracy and subsequently of New Right ideology itself would lead eventually to the transition to Socialism, a hope which 30 years after the publication of Stuart Hall's article still seems a long way from realisation.

Click here for Stuart Hall's The Great Moving Right Show

Click here for Stuart Hall's Gramsci and Us 

Interested students who require  amore detailed consideration of the concept of Authoritarian Populism [and indeed all aspects of Thatcherism] could consult "Thatcherism" [Bob Jessop, Kevin Bonnett, Simon Bromley and Tom Ling : Polity Press 1988]

•   Conclusions: Some Criticisms of New Right Ideology :For Class Discussion

  I have tried above to describe the key elements of Neo-Liberalism and Neo-Conservatism which are combined in the Thatcherite version of New Right ideology. All ideologies may be criticised from other ideological positions and I provide an outline below of some of the ideological criticisms of New Right ideology which have been made mainly from a broadly socialist perspective although some of these criticisms would be accepted to some extent by some liberals and moderate conservatives while of course New Right theorists themselves would reject these criticisms.

• It is argued in New Right ideology that individual differences in talents and abilities are to some considerable extent inevitable because they are primarily genetically determined; that individuals are driven mainly be self-interest and that [in the Neo-Liberal strand of New Right thinking] they are the best judges of their own interests; and that in a free society with limited government the combination of the above conditions will result inevitably in unequal distribution of income and wealth. However differences in income and wealth are compatible with equality of opportunity and also desirable because they strengthen incentives to study, work, save and invest and thereby promote economic efficiency and growth from which all members of society [including the poor ] can benefit. Therefore the pursuit of individual self-interest is entirely compatible with the interests of society as a whole. However critics would reject these arguments for the following reasons.

  1. They would argue that differences in talents and abilities are determined to a considerable extent by environmental factors and that the social and economic inequalities supported by New Right theorists actually restrict the opportunities for the poorest members of society to develop their talents to the full: that is economic and social inequalities undermine equality of opportunity which means that they are unjust.

  2. Critics might agree that in capitalist societies individuals appear to be driven to a considerable extent by financial self- interest but claim that this is because they have been socialised into the acceptance of competitive capitalist values not because financial self-interest is in some way fundamental to human nature. In more equal societies  individuals would come to value collaboration rather than competition and to recognise that it results in greater human self-fulfillment.

  3. Economic inequalities may well be necessary to provide financial incentives under capitalism but in more equal collaborative societies individuals would be much more willing to work for the good of society as a whole rather than solely to further their own narrow financial self -interest.

  4. Even if economic inequalities do result in faster economic growth under capitalism the benefits of economic growth "trickle down" to the poor only to a  very limited extent such that economic inequalities remain entrenched which restricts equality of opportunity.  

•  New Right theorists are strong supporters of private property and the capitalist market system on the grounds that private property helps to provide a defence of individual liberty and the capitalist market mechanism responds flexibly to meet the  demands of consumers  efficiently and cheaply. Contrastingly state socialist systems of production are seen as over-centralised, bureaucratic, inefficient and wasteful and nationalised industries as they operated in the UK were subject to similar criticisms all of which , according to New Right theorists strengthened the case for privatisation. Again several criticisms have been made of the operation in practice of the capitalist market mechanism.

  1. It is argued that patterns of consumer demand and hence patterns of output reflect the unequal distribution of income and wealth so that, for example, economic resources are channelled into the production of luxuries for the rich while the poor in many Third World countries go hungry and government services such as health, education and social services are under-resourced even in advanced capitalist countries.

  2. It is argued that capitalist firms use powerful advertising techniques to manufacture demand for their products which are essentially unnecessary while failing to meet the real needs of consumers for example for good, healthy, unadulterated food  and non-polluting energy and transport.

  3. It is argued that the real strength of capitalist competition is in fact far weaker than is suggested in simplified economic models of laissez faire such as the perfect competition model and that large capitalist firms  can often use their monopoly power to maintain high prices and profits in the long term. [However New Right theorists may defend high profitability on the grounds that high profits may to some extent be reinvested to promote greater economic efficiency.

  4. It is argued that capitalist firms take insufficient account of the societal financial and environmental consequences of the actions: witness the recent banking crisis and massive oil leaks off the coast of Louisiana which have at least to some extent called into question the long -term viability of capitalist neo-liberalism.

• New Right theorists have rejected Keynesian approaches to macroeconomic management.

For much of the post-war period in the era of the so-called post war consensus both Labour and Conservative governments attempted to use Keynesian policies of macroeconomic management to maintain high levels of employment. Essentially it was argued that unemployment was caused mainly by a shortfall of aggregate monetary demand and that this aggregate monetary demand could be increased by a combination of fiscal and monetary measures [increases in government spending, reductions in taxation, reduced interest rates and increases in the money supply] which would have the effects of reducing unemployment. However by the 1970s it came to be argued by monetarist economists that Keynesian economic policies could only reduce unemployment as far as the so-called natural rate of unemployment and that any attempts to reduce unemployment below its natural rate would lead only to accelerating inflation. This was a view which was accepted by James Callaghan in a speech in 1976 [apparently written largely by his son-in law, the economics journalist Peter Jay] and led the Labour government to reduce its reliance on Keynesian methods.

It is then generally argued that Conservative governments under Mrs Thatcher distanced themselves even further from Keynesian methods and based their economic theories much more on monetarist policies embodied in the so-called Medium Term Financial Strategy which involved 4 yearly targets for government spending, government borrowing [as measured by the PSBR i.e. the public sector borrowing requirement], and the money supply although even by the early 1980s it was being suggested the the Conservatives were actually adopting a more pragmatic approach to economic policy and adhering less strictly to the dictates of monetarist theory.

Whatever the complexities of the economic debate it is the case that unemployment did rise very sharply under the Conservatives at the beginning of the 1980s. Mrs Thatcher and her supporters claimed that this was a price worth paying to reduce the rate of inflation  and increase the international competitiveness of the UK economy .The rate of inflation , after rising in 1979-1980 did fall as unemployment remained high into the late 1980s.There then followed a period of severe economic instability between 1988 and 1992 as unemployment first fell with a consequent rise in inflation followed by a rise in unemployment with a consequent fall in inflation. Following the exit of the UK from the ERM in 1992 we have had relative economic stability under both Conservative and Labour governments with steady economic growth , falling inflation and falling unemployment.  Supporters of Thatcherism argue that, in the final analysis, here economic policies were necessary to create the conditions for future economic stability and growth , a conclusion which is rejected by her critics. Unfortunately I cannot pursue these controversies any further at this point and interested students should consult the relevant Economics literature.]

• New Right theorists have been critical of the what they believe to be the excessive growth and inefficient administration of the state in general and of the welfare state in particular.

They explain what they consider to be the excessive growth and inefficient administration of the state in general and the welfare state in particular in terms of public choice theory; they claim that the combination of high taxation and generous welfare benefits resulted in excessive economic equality which undermined incentives and economic growth and contributed to the development of a welfare dependent underclass.

Critics dispute these views. They argue that the conclusions of public choice theory are likely to be invalid because most state bureaucrats operate in accordance with a public service ethos which priorities the national interest rather than their own narrow self-interest; that attempts to increase economic equality can be justified in terms of fairness and greater equality of opportunity which itself will increase economic efficiency; and that the New Right version of Underclass theory [based mainly on the ideas of Charles Murray is flawed.

1. The theory is said to overstate cultural differences in attitudes and values between members of the so-called underclass and the rest of society.
2. The theory is said to understate the impact of structural forces such as the relocation of industrial production to low cost developing countries as factors influencing the growth of unemployment.
3. Also according to many critics of the theory many members of the working class move in and out of poverty so that in effect no permanent underclass exists.

• New Right theorists have argued that the trade unions were excessively powerful

New Right theorists have argued that the trade unions were excessively powerful and that their demands for excessive wage increases , their use of strike activity and restrictive practices  served to reduce the attractiveness of foreign investment into the UK and to restrict the UK rate of economic growth .Their power was especially visible in the Miners' Strike of 1973-74 and the Winter of Discontent 1978-79 which [allegedly] led indirectly to the falls of the Heath and Callaghan Governments respectively. However critics argue that there are many causes of slow economic growth; that Britain has never been an especially strike prone country; and that the outcome of General Elections  depends upon  a wide variety of factors  such that  if the Heath and Callaghan governments had been perceived as generally effective governments they would have won the respective General Elections. Also from a Marxist perspective it is argued that states in capitalist societies operate mainly in the interests of the dominant capitalist class which has far greater economic and political power than does the trade union movement.

• Neo-Conservatives have argued in support of traditional sources of authority such as the Monarchy, the State [although its functions should be restricted] the Aristocracy and the Church , in support of traditional attitudes to morality and family life, in support of  national sovereignty as opposed to what they see as the excessive incursions of the EU into British life and against the growth of multiculturalism which they see as gradually undermining the British way of life. However critics would argue that traditional sources of authority help to underpin the political and economic inequalities which are against the interests of the mass of the people; that traditional forms of morality may in some cases restrict individuals' freedom to act as they see fit in their personal lives  [a criticism which Neo-liberals would also tend to accept]; that the Eurosceptic defence of national sovereignty prevents the UK from developing deeper relationships with the EU and the pooling of sovereignty which is essential if pan-European problems are to be resolved; and that the growth of multiculturalism should be welcomed in recognition of the rights of British ethnic minorities to celebrate their own cultures. 

• In Conclusion

It is no simple matter to assess the actual validity of different ideological positions because to do so one would have to assess the extents to which individual government policies across the whole range of government activity have in practice been driven by governments' professed ideologies  and to quantify the effects of all policies which have been ideologically driven. To take only one policy area it might be generally agreed that taxation and social security policies have at different times been influenced by the ideologies of Social Democracy, One Nation Conservatism and the New Right: in each case we should need to assess the effects of these policies on economic equality, economic efficiency and economic growth, the extent to which any benefits of growth trickled down to the poor, whether a welfare -dependent underclass existed and if so how it was influenced by differing policies and how these differing policies affected equality of opportunity. Social researchers are of course still involved in the investigation of the practical effects of Thatcherite policies in every area of government.

My own interpretation of data on the comparative effects of differing ideological approaches to taxation and social security policies would not support the ideological claims of New Right theorists but they might claim in turn that this is because my own interpretations are also ideologically biased which leads on to questions as to whether biases in social research can ever be entirely avoided. But these are questions for another day and for another website author!

• Addition September 2011

Click here  for Michael Portillo's  Radio Four two part series entitled Capitalism on Trial. Mr Portillo interviews both supporters and critics of the capitalist system but those who are familiar with Mr Portillo's own political career will not be surprised by his own conclusions.