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‘EVERYMAN A CAPITALIST’ OR ‘FREE TO CHOOSE’? EXPLORING THE TENSIONS WITHIN THATCHERITE INDIVIDUALISM

  • ALED DAVIES (a1), JAMES FREEMAN (a1) and HUGH PEMBERTON (a1)

Abstract

It is widely recognized that ‘the individual’ was prioritized by the Thatcher governments. However, there has been little analysis by historians of exactly how the Thatcher government conceptualized ‘the individual’. In this article, we attempt to remedy this deficiency by undertaking a case-study of a key Thatcherite social policy reform: the introduction of ‘personal pensions’. This approach allows us to understand the position of ‘the individual’ on the functional level of Thatcherite policy-making. In doing so, we argue that there was no coherent or fixed Thatcherite concept of the individual. Instead, we identify three fundamental tensions: (i) should individuals be capitalists or consumers; (ii) were they rational or irrational; and (iii) should they be risk-taking entrepreneurs or prudent savers? This reflected, in part, conflicts within the diverse tapestry of post-war neoliberal thought. We demonstrate in this article that these tensions undermined the Thatcher governments’ original attempt to create a society of entrepreneurial investor-capitalists, which in turn cemented their preference for simply maximizing individual freedom of choice within a competitive – yet tightly regulated – market environment.

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Corresponding author

Department of History, School of Humanities, University of Bristol, 11 Woodland Rd, Bristol, bs8 1tb aled.davies@bristol.ac.uk, james.freeman@bristol.ac.uk, h.pemberton@bristol.ac.uk

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The authors are indebted to Amy Edwards, Andrew Seaton, Ben Jackson, Florence Sutcliffe-Braithwaite, contributors to discussion at a number of conferences, and the journal's anonymous referees for their very helpful and supportive comments on earlier drafts of this article. The research on which it was based was funded by the Arts and Humanities Research Council (AH/L004739/1, The Thatcher Pension Reforms and their Consequences).

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References

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1 Jackson, Ben and Saunders, Robert, ‘Introduction: varieties of Thatcherism’, in Jackson, Ben and Saunders, Robert, eds., Making Thatcher's Britain (Cambridge, 2012), pp. 122.

2 Gough, Ian, The political economy of the welfare state (London, 1979); Bulpitt, Jim, ‘The discipline of the new democracy: Mrs Thatcher's domestic statecraft’, Political Studies, 34 (1986), pp. 1939.

3 Riddell, Peter, The Thatcher government (Oxford, 1985), p. 7.

4 Evans, Eric J., Thatcher and Thatcherism (3rd edn, London, 2013), p. 3.

5 Thatcher, Margaret, Downing Street years (London, 1993), pp. 68.

6 Gilmour, Ian, Dancing with dogma: Britain under Thatcherism (London, 1992), p. 9.

7 Green, E. H. H., Thatcher (London, 2006), p. 53.

8 Francis, Matthew, ‘“A crusade to enfranchise the many”: Thatcherism and the “property-owning democracy”’, Twentieth Century British History, 23 (2012), pp. 276–9; Evans, Stephen, ‘The not so odd couple: Margaret Thatcher and one nation Conservatism’, Contemporary British History, 23 (2009), pp. 108–9; Davies, Aled, ‘“Right to buy”: the development of a Conservative housing policy, 1945–1980’, Contemporary British History, 27 (2013), pp. 421–44. See also the literature on the post-war consensus, e.g. Jones, Harriet and Kandiah, Michael, eds., The myth of consensus: new views on British history, 1945–1964 (Basingtoke, 1996).

9 See, for example, Peck, Jamie and Tickell, Adam, ‘Conceptualising neoliberalism, thinking Thatcherism’, in Leitner, Helga, Peck, Jamie, and Sheppard, Eric S., eds., Contesting neoliberalism: urban frontiers (New York, NY, 2007), pp. 2650.

10 Plehwe, Dieter, ‘Introduction’, in Mirowski, Philip and Plehwe, Dieter, eds., The road from Mont Pèlerin: the making of the neoliberal thought collective (Cambridge, MA, 2009), pp. 1415.

11 Ben Jackson, ‘The think-tank archipelago: Thatcherism and neo-liberalism’, in Jackson and Saunders, eds., Making Thatcher's Britain, pp. 43–61; Cockett, Richard, Thinking the unthinkable: think-tanks and the economic counter-revolution, 1931–1983 (London, 1994); Desai, Radhika, ‘Second-hand dealers in ideas: think-tanks and Thatcherite hegemony’, New Left Review, 1 (1994), pp. 2764; Harrison, Brian, ‘Mrs Thatcher and the intellectuals’, Twentieth Century British History, 5 (1994), pp. 206–45.

12 Jones, Daniel Stedman, Masters of the universe: Hayek, Friedman, and the birth of neoliberal politics (Princeton, NJ, 2014), p. 261.

13 Peck, Jamie, Constructions of neoliberal reason (Oxford, 2010), p. 8.

14 Mirowski and Plehwe, eds., The road from Mont Pèlerin; Jackson, Ben, ‘At the origins of neo-liberalism: the free economy and the strong state, 1930–1947’, Historical Journal, 53 (2010), pp. 129–51; Turner, Rachel S., Neo-liberal ideology: history, concepts and policies (Edinburgh, 2008).

15 Bonefeld, Werner, ‘Freedom and the strong state: on German ordoliberalism’, New Political Economy, 17 (2012), pp. 633–56; Robert Van Horn and Philip Mirowski, ‘The rise of the Chicago school of economics’, in Mirowski and Plehwe, eds., The road from Mont Pèlerin, pp. 139–80.

16 Foucault, Michel, Security, territory, population: lectures at the Collège de France, 1978–1979 (Basingstoke, 2007); idem, The birth of biopolitics: lectures at the Collège de France, 1978–1979 (Basingstoke, 2008).

17 Lemke, Thomas, ‘“The birth of bio-politics”: Michel Foucault's lectures at the Collège de France on neo-liberal governmentality’, Economy and Society, 30 (2001), p. 201.

18 Rose, Nikolas, Governing the soul: the shaping of the private self (2nd edn, London, 1999), pp. 230–1.

19 Langley, Paul, ‘The making of investor subjects in Anglo-American pensions’, Environment and Planning D: Space and Society, 24 (2006), pp. 919–34.

20 Lemke, ‘“The birth of bio-politics”’, pp. 201–2.

21 Rose, Governing the Soul; Rose, Nikolas and Miller, Peter, ‘Political power beyond the state: problematics of government’, British Journal of Sociology, 43 (1992), pp. 173205; Rose, Nikolas, O'Malley, Pat, and Valverde, Mariana, ‘Governmentality’, Annual Review of Law and Social Science, 2 (2006), pp. 90–1.

22 Birch, Kean, ‘Neoliberalism: the whys and wherefores…and future directions’, Sociology Compass, 9 (2015), p. 575; as an exception, see Rose, Nikolas, ‘Governing “advanced” liberal democracies’, in Barry, Andrew, Osborne, Thomas, and Rose, Nikolas, eds., Foucault and political reason: liberalism, neo-liberalism, and rationalities of government (London, 1996), p. 52.

23 Sutcliffe-Braithwaite's work could be said to build upon Andrew Gamble's analysis of the tensions within Thatcherism in Gamble, Andrew, The free economy and the strong state (Basingstoke, 1988).

24 Sutcliffe-Braithwaite, Florence, ‘Neo-liberalism and morality in the making of Thatcherite social policy’, Historical Journal, 55 (2012), pp. 497520.

25 Ibid., p. 516.

26 Ronald Butt, ‘Mrs Thatcher: the first two years’, Sunday Times, 1 May 1981.

27 Letwin, Shirley Robin, The anatomy of Thatcherism (London, 1992).

28 Brown, Joan C. and Small, Stephen, Occupational benefits as social security (London, 1985), pp. 138, 153.

29 Cmd 7937, Report: Committee to Review the Functioning of Financial Institutions (1980), Appendix Table 3.50.

30 Plender, John, That's the way the money goes: financial institutions and your savings (London, 1982), pp. 40–2.

31 Centre for Policy Studies, ‘Personal and portable pensions – for all’ (Apr. 1983), www.cps.org.uk/publications/reports/personal-and-portable-pensions-for-all/ (last accessed 11 Mar. 2017).

32 Hugh Thomas and Alfred Sherman, ‘Centre for Policy Studies: reports of study groups, 1980–1981’, Feb. 1981, www.margaretthatcher.org/document/121408, Margaret Thatcher Foundation website (MTF) 121408.

33 Nigel Vinson to Sir Russell Smith, 26 Oct. 1983; The National Archives (TNA): T 530/77; Lord Thomas of Swynnerton and Alfred Sherman, ‘Centre for Policy Studies: reports of study groups, 1982–1983’, Feb. 1983, www.margaretthatcher.org/document/131497, MTF 131497.

34 Margaret Thatcher, ‘Speech to the Zurich Economic Society: the new renaissance’, 14 Mar. 1977, www.margaretthatcher.org/document/103336, MTF 103336.

35 Nigel Vinson, ‘IV. Personal capital formation’, in Thomas and Sherman, ‘Centre for Policy Studies: reports of study groups, 1980–1981’, Feb. 1981, MTF 121408; ‘Centre for Policy Studies: reports of study groups, 1982–1983’, Feb. 1983, MTF 131497; Vinson to Sir Russell Smith, 26 Oct. 1983, TNA: T 530/77.

36 Nigel Vinson and Philip Chappell to Nick Montagu, 9 Feb. 1984, TNA: BN 147/27.

37 Nigel Vinson, ‘Draft statement to be issued by Centre for Policy Studies if and when the government announces the option of personal and portable pensions for all’, July 1984, TNA: BN 147/10.

38 Philip Chappell and Nigel Vinson, ‘Owners all: a proposal for personal investment pools’, CPS: Policy Challenge, (Oct. 1985), www.cps.org.uk/publications/reports/owners-all/ (last accessed 11 Mar. 2017).

39 Centre for Policy Studies, ‘Personal and portable pensions, evidence to the Retirement Provision Inquiry’, 6 Jan. 1984, TNA: T 530/128.

40 DHSS Public Inquiry into Provision for Retirement, 24 Jan. 1984, TNA: BN 147/36.

41 D. Allson, ‘Institute of Directors Pensions Conference’, 21 Dec. 1983, TNA: BN 147/32.

42 Adam Ridley to the chancellor of the exchequer, ‘Portable pensions and all that’, 11 Nov. 1983, TNA: T 530/128.

43 Centre for Policy Studies, ‘Personal and portable pensions – for all’.

44 Eric Short, ‘Era of greater choice’, Financial Times, 1 Feb. 1986.

45 The Life Offices’ Association/Associated Scottish Life Offices, ‘Occupational pension schemes early leavers (paper presented to Joint Working Group at the One-Day Conference on Early Leavers started by the secretary of state for social services at the Department of Health and Social Security)’, 14 Sept. 1983, Alfred Sherman papers, Royal Holloway, University of London, AC 946.

46 Maurice Oldfield to N. Montagu, ‘Inquiry into Provision for Retirement: portable pensions’, 24 Jan. 1984, TNA: BN 147/26; DHSS Public Inquiry into Provision for Retirement, 24 Jan. 1984, TNA: BN 147/36.

47 Adam Ridley to the chancellor of the exchequer, ‘Portable pensions and all that’, 11 Nov. 1983, TNA: T 530/128.

48 Centre for Policy Studies, ‘Personal and portable pensions, evidence to the Retirement Provision Inquiry’, 6 Jan. 1984, TNA: T 530/128.

49 DHSS Public Inquiry into Provision for Retirement, 24 Jan. 1984, TNA: BN 147/36.

50 Ibid.

51 ‘Pensions and individual choice: a paper by the CPRS’, Apr. 1983, TNA: PREM 19/1004.

52 Centre for Policy Studies, ‘Personal and portable pensions, evidence to the Retirement Provision Inquiry’, 6 Jan. 1984, TNA: T 530/128.

53 Water Goldsmith to Norman Fowler, 31 Jan. 1984, TNA: BN 147/36; DHSS, Public Inquiry into Provision for Retirement, 14 Feb. 1984, TNA: BN 147/30.

54 von Hayek, Friedrich A., The constitution of liberty (Abingdon, 1998; orig. 1960), pp. 248–65.

55 Eric Short, ‘Freedom to choose has its pitfalls’, Financial Times, 1 Feb. 1986.

56 C (85) 27, memorandum by the secretary of state for social services, ‘Review of social security: final decisions’, 25 Nov. 1985, CAB 129/219/27.

57 Short, ‘Freedom to choose has its pitfalls’.

58 Short, ‘Era of greater choice’.

59 Norman Fowler to prime minister, ‘Social security review: the next steps’, 1 Oct. 1985, TNA: BN 13/299.

60 C (85) 27, memorandum by the secretary of state for social services, ‘Review of social security: final decisions’, 25 Nov. 1985, CAB 129/219/27.

61 The failure to create a society of small, private investors in the 1980s is also examined in Edwards, Amy, ‘“Manufacturing capitalists’: the Wider Share Ownership Council and the problem of “popular capitalism”’, Twentieth Century British History, 27 (2016), pp. 100–23.

62 On vitalpolitik, see Bonefeld, ‘Freedom and the strong state’, pp. 633–56.

63 Foucault, The birth of biopolitics, lecture of 28 Mar. 1979. On the centrality of rational actor assumptions within Thatcherism, see Letwin, The anatomy of Thatcherism, p. 340.

64 Rose, Governing the soul, p. 230.

65 Cockett, Thinking the unthinkable.

66 Seldon, Arthur, Pensions in a free society (London, 1957); idem, Pensions for prosperity (London, 1960).

67 Party, Conservative, The right approach: a statement of Conservative aims (London, 1976).

68 ‘The right approach to social policy: social services’ (draft), 1978, Conservative Party Archive, Bodleian Library, CRD 4/7/71.

69 Howe, Geoffrey et al. , The right approach to the economy: outline of an economic strategy for the next Conservative government (London, 1977).

70 Thatcher, ‘Speech to the Zurich Economic Society’.

71 Centre for Policy Studies, ‘Personal and portable pensions – for all’.

72 Inquiry into Provision for Retirement, Portable Pensions, Evidence Submitted by Legal & General Assurance Society Ltd, January 1984, TNA: BN 147/26; see also Eric Short, ‘Pension plans criticised’, Financial Times, 10 Sept. 1983.

73 See TNA: BN 147/26 and /36 passim but particularly contributions from T. S. Shucksmith (Shucksmith & Co., Consulting Actuaries), Maurice Oldfield (chairman, National Association of Pension Funds), and J. J. Mackenzie (London and Manchester Assurance).

74 DHSS Public Inquiry into Provision for Retirement, 29 Feb. 1984, TNA: BN 147/36.

75 IPR(PP) 8, N. Montagu, ‘Summary of written submissions for bodies giving oral evidence’, 9 Feb. 1984, TNA: BN 147/26.

76 M. Oldfield to N. Montagu, ‘Inquiry into Provision for Retirement: portable pensions’, 24 Jan. 1984, TNA: BN 147/26; IPR(PP)6, N. Montagu, ‘Further notes by Save and Prosper Group’, 25 Jan. 1984, TNA: BN 147/26.

77 John Sparrow to Norman Fowler, ‘CPRS work programme – pensions’, 19 Oct. 1982, TNA: CAB 184/169.

78 Nigel Lawson claimed that the CPRS memorandum on welfare state reform caused the nearest thing to a Cabinet riot in the history of the Thatcher administration’ – Timmins, Nicholas, The five giants: a biography of the welfare state (London, 2001), p. 390.

79 ‘Pensions issues and policies: a paper by the CPRS’, Apr. 1983, TNA: PREM 19/1004.

80 ‘Pensions and individual choice: a paper by the CPRS’.

81 Introduction by Fowler, Norman to Personal pensions: a consultative document (London, 1984), p. 2.

82 Ibid., p. 15. See also the more fleshed out proposals contained with the later green paper – Cmd 9519, Reform of social security: programme for change, ii (1984), pp. 68.

83 Letter from Nigel Vinson and Philip Chappell to Sherman, 17 July 1984, and ‘Centre for Policy Studies: press release’, 17 July 1984, Alfred Sherman papers, AC 1240-4, AR/M/MISC 9/5/3 box 32.

84 Margaret Thatcher, ‘Speech to Conservative Women's Conference’, www.margaretthatcher.org/document/102694, MTF 102694, 21 May 1975.

85 Idem, ‘Speech to the Industry Conference’, www.margaretthatcher.org/document/103073, MTF 103073, 9 July 1976.

86 Howe et al., The right approach to the economy, p. 29.

87 Geoffrey Howe, ‘Speech to Bow Group’, www.margaretthatcher.org/document/111842, MTF 111842, 26 June 1978.

88 Thatcher, ‘Speech to Conservative Women's Conference’.

89 Margaret Thatcher, ‘My kind of Tory party’, Daily Telegraph, 30 Jan. 1975.

90 Centre for Policy Studies, ‘Personal and portable pensions – for all’.

91 Centre for Policy Studies evidence to DHSS Inquiry, 1984, TNA: T530/128; Nigel Vinson, ‘Notes for CBI speech’, 26 Oct. 1983, TNA: T 530/77. Treasury advisers pointed out that these schemes (so-called ‘Section 226’ schemes) required security against another asset, not the pension itself: D. J. Seammen, ‘Portable pensions’, Nov. 1983, TNA: T530/128.

92 Centre for Policy Studies evidence to DHSS Inquiry, TNA: T530/128.

93 Ibid.

94 Ibid.; David Howell identified similar problems in: Freedom and capital: prospects for the property-owning democracy (Oxford, 1981), pp. 22–3.

95 Vinson saw reversing the ‘discouragement’ of thrift as an aim from the outset: Nigel Vinson to Margaret Thatcher, 11 June 1981, http://www.margaretthatcher.org/document/121412, MTF 121412.

96 Centre for Policy Studies evidence to DHSS Inquiry, TNA: T530/128.

97 Ibid.

98 Ibid.

99 Ibid.

100 Evidence from the US and UK Section 226 schemes suggested this: ‘Save and Prosper Group, memorandum on portable pensions’, TNA: T50/128; Maurice Oldfield to N. Montagu, ‘Inquiry into Provision for Retirement: portable pensions’, 24 Jan. 1984, TNA: BN 147/26.

101 Centre for Policy Studies evidence to DHSS Inquiry, TNA: T530/128.

102 Actually there had been doubts about fund managers risk-taking: Eric Short, ‘Pension funds “too vital to be left to managers”’, Financial Times, 15 Nov. 1977.

103 Centre for Policy Studies evidence to DHSS Inquiry, TNA: T530/128.

104 Ibid.

105 Ibid.

106 Seammen, ‘Portable pensions’, TNA: T530/128.

107 D. J. Seammen to G. W. Watson, ‘Inquiry into Provision for Retirement evidence from NAPF and Mr Vinson’, 10 Jan. 1984, TNA: T 530/128.

108 Ibid.

109 A. J. White to D. J. Seammen, ‘Enquiry into Provision for Retirement: evidence from NAPF and Mr Vinson’, 11 Jan. 1984, T 530/128.

110 Adam Ridley to chancellor of the exchequer, ‘Portable pensions and all that’, 11 Nov. 1983, TNA: T 530/128.

111 Seammen, ‘Portable pensions’, TNA: T530/128.

112 C (85) 27, memorandum by the secretary of state for social services, ‘Review of social security: final decisions’, 25 Nov. 1985, CAB 129/219/27.

113 Cmd 9518, Reform of social security: programme for change, p. 5.

114 Chappell, Philip, ‘Pensions and privilege: how to end the scandal, simplify taxes and widen ownership’, Centre for Policy Studies, Policy Study No. 96 (London, 1988), p. 23.

115 Ibid.

116 Marsh, David and Rhodes, R. A. W., Implementing Thatcherite policies: audit of an era (Buckingham, 1992). See also Dolowitz, David et al. , ‘Thatcherism and the 3 “Rs”: radicalism, realism and rhetoric in the third term of the Thatcher government’, Parliamentary Affairs, 49 (1996), pp. 455–69.

117 They certainly viewed it this way – see Chappell, ‘Pensions and privilege’.

118 Hayek, The constitution of liberty, pp. 248–65.

The authors are indebted to Amy Edwards, Andrew Seaton, Ben Jackson, Florence Sutcliffe-Braithwaite, contributors to discussion at a number of conferences, and the journal's anonymous referees for their very helpful and supportive comments on earlier drafts of this article. The research on which it was based was funded by the Arts and Humanities Research Council (AH/L004739/1, The Thatcher Pension Reforms and their Consequences).

‘EVERYMAN A CAPITALIST’ OR ‘FREE TO CHOOSE’? EXPLORING THE TENSIONS WITHIN THATCHERITE INDIVIDUALISM

  • ALED DAVIES (a1), JAMES FREEMAN (a1) and HUGH PEMBERTON (a1)

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