“It is a form of regressive modernisation”
Theorists of Thatcherism: Stuart Hall vs. Friedrich Hayek
On February 11, 1975, the British Conservative Party, having lost two elections in a row, selected the forty-nine-year-old Margaret Thatcher as its first female leader. Some time after Thatcher’s elevation, she visited the Institute for Economic Affairs (IEA), a conservative think tank based in a Georgian terrace house on Lord North Street, Westminster. The IEA’s director, Lord Ralph Harris, introduced her to Friedrich Hayek, the Austrian British economist, who in 1974 had been awarded a share of the Nobel Memorial Prize for Economic Sciences. Since publishing his wartime jeremiad against social democracy, The Road to Serfdom, the seventy-fiveyear-old Hayek had expounded his free market views from academic perches at the London School of Economics, the University of Chicago, and since 1962, the University of Freiburg in West Germany. He had also organized the Mont Pelerin Society, an international organization committed to “private property and the competitive market” that counted Milton Friedman and other conservative luminaries among its members. During the prosperous postwar decades, however, Hayek had fallen out of fashion. As the economic philosophy of his old intellectual foes Keynes and William Beveridge held sway on both sides of the Atlantic, he had retreated into obscurity.
The Nobel award, which came as a surprise to many economists, brought Hayek back into the public eye, and in Thatcher he found an eager pupil. “Although she is known as being a rather overpowering lady, she sat down like a meek schoolgirl and listened,” Harris later recalled of the meeting at the IEA.1 Hayek was smitten with the new Conservative leader. “She’s so beautiful,” he said after she left.2 During a stint as minister of education in Edward Heath’s 1970–74 government, Thatcher wasn’t regarded as a right-wing ideologue, but the industrial relations environment of the 1970s had radicalized her. In early 1972, miners in Britain’s publicly owned coal industry went on strike, demanding higher pay to catch up with rising inflation. As coal stocks ran down, there were extensive power outages. After seven weeks, the dispute ended in a victory for the miners: the National Coal Board awarded them a pay increase of more than 20 percent. In 1973, emboldened by this success, the National Union of Mineworkers (NUM) issued fresh wage demands, and its members refused to work overtime. Fearing a complete shutdown, Heath’s government ordered many businesses to work a three-day week to conserve energy. In February 1974 the miners voted to strike again. Heath called a snap general election, framing it as a choice between order and union-induced chaos: one of the Conservative Party’s campaign slogans was “Who Governs Britain?” The voters decided it would no longer be the Conservatives: on election day, the party lost its overall majority in the House of Commons. The Labour Party formed a minority government and quickly settled the dispute with the NUM, agreeing to give the miners another big pay raise.
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