by Alexander Curtis
On March 11, 1980, an embattled Margaret Thatcher delivered a much-anticipated Party Political Broadcast. Her budget cuts to state and welfare programs were facing fierce resistance, both from political opponents on the Left and even from within her own Conservative government. Less than a year into her premiership, she emphasized: “We are paying the price for years of make believe and now all the problems of those years have come home to roost.” Thatcher went further in attacking her own predecessors’ naïve mishandling of economic crises, saying “[no] wonder you agreed it was time for a change.” The swingeing transformation that she proposed as the only appropriate medicine for an ailing nation was deeply informed by the neoliberal theories of the Austrian economists Friedrich Hayek. In her memoir, The Path To Power, she recalled that Hayek’s The Road to Serfdom was “top of the reading list” given to her by her adviser, Sir Keith Joseph (51). Her resultant neoliberalism would be subsequently understood by Wendy Brown, in Undoing the Demos (2015), as a “sophisticated common sense, a reality principle remaking institutions and human beings everywhere it settles, nestles, and gains affirmation” (35). Neoliberalism heralds the dawn of homo oeconomicus, according to Brown: that species which acts—in almost all spheres of life—according to the principles of economic rationality, with the global market the governing logic.
It may be argued that neoliberalism is a promiscuous, if not paradoxical, idea. For example, Thatcher’s ideology long-held an illiberal and vengeful core through the enforcement of a Victorian moral code from above against what she perceived as the pathological indolence and backwardness of the working class from below. In Globalists (2018), Quinn Slobodian has also noted the significance of the post-imperial context to the development of neoliberalism more broadly. Thatcher’s racialized hostility to immigration, which runs counter to the notion of a global free trade economy, furnishes another example of neoliberalism’s revival of a repressive, Victorian England—what Raphael Samuel once called a picture of “an older Britain where parents were strict, children good-mannered, hooliganism (she erroneously believed) unknown” (Island Stories, Vol II, 1998, 337). We can only assume this was a Britain of whiteness. This counter-revolutionary impulse represented not only a strict set of moral values but also aimed towards the creation a perfect market, a pure structure, of an ahistorical—if not, anti-historical—idea. Of course, this ideological core was laden with contradiction. As Marxist theorist Fredric Jameson pointed out in Postmodernism (1984), the “‘market’ turns out finally to be as Utopian as socialism has recently been held to be” (278). I argue that Thatcherism expressed a version of neoliberal ideology during the post-war era in the U.K., founded not on a prescriptive theory of politics or natural law of the market, but rather on an ironic embrace of subjectively-felt, personal irrationalities embedded within modern life. Moreover, I contend that the ultimate direction which Thatcherite neoliberalism took is grounded in a novel understanding of political and historical subjecthood which is itself coterminous with developments beyond the neoliberal school. As we shall see, it is visible in thinking on the Frankfurt School Left, in particular Jürgen Habermas’s 1973 text, Legitimation Crisis. The neoliberal subject which Thatcher had a hand in constituting relies upon a similar manoeuvre with relation to the subject as these analyses on the Left which emphasize the structural relations of society over individual agency.In its insistence on the primacy of structural forces and its destabilization of the democratic subject, Habermas’s anti-capitalist work is paradoxically consistent with the neoliberal reduction of the polity to economic actors. This is not to suggest that Habermas was functioning as a neoliberal, or even that he paved the way for neoliberalism with his critique; rather, it is to emphasize that the rewritten status of the neoliberal subject—a fundamental component of neoliberal doctrine—is no less historically contingent and contestable than is the subject as it appears in Left critique.
Insistence on the historical foundations of neoliberal thinking would be anathema to the sublime terms by which its doctrinal adherents viewed the global market. Hayek referred to the global market as a “catallaxy”: a set of processes beyond rational comprehension but which nevertheless must be upheld by rational action. In 1974, Hayek won the Nobel Memorial Prize for Economics and took the opportunity to upbraid other neoliberal economists who believed in the prolepses of what Slobodian calls the “prosthetic extension of human reasoning” afforded by computerized models of the global economy, and founded on a belief in the ironclad laws of the market (221). The year before, economist Wassily Leontief won for precisely that reason. And, yet, as Slobodian notes, Hayek’s understanding of the global market was nonetheless drawing “inspiration from the same source of system theory” (224-5). Whether catallaxy or mathematical, rational process, the global market which the neoliberal economists theorized—and which became central to Thatcherism—crucially remained inscrutable to the majority of its economic participants.
The centrality of Hayekian monetarism to Thatcher’s project is made most explicit in her memoir, The Path to Power. She understood from Hayek that “Nazism—national socialism—had its roots in nineteenth-century German social planning” (51). It was Hayek that alerted Thatcher to the “profound, even revolutionary implications of state planning for Western civilization as it had grown up over the centuries.” Central to this is monetarism, the insistence on a functioning national economy of monetary levers pulled by political leaders, with a simultaneous minimization of the political sphere beyond this remit.
In the early days of Thatcher’s government, as unemployment soared, the universality of monetarist economic policies was hard to accept—only the most dogmatic and disciplined adherent would fail to baulk at the increase of nearly one million unemployed in the first year of her government. In 1980 she was challenged at a Press Association Annual Lunch as to whether she was being too severe, too reliant on relatively novel economic theories. She insisted that monetarism was less an innovation and more an eternal fact. “That is not a new-fangled thing,” she said, “it is as fundamental as the law of gravity, and you cannot avoid it.”
A functioning neoliberal economy is founded on a deferral of agency by the polity to those who claim to understand it—and are thus qualified to treat it. This is ironically exemplified in Thatcher’s deployment of imagery taken from the medical sphere. Her biographer, John Campbell, has noted this tendency in Thatcher’s rhetoric, in which she positions herself as doctor to the sick man of Europe. In Margaret Thatcher, Vol. II (2008), he notes that this move “struck a chord with the British psyche, especially in light of the ‘nation’s sickness’” during the 1970s (87). The diseases of over taxation, runaway unions, and bureaucratic overreach which had seen the Keynesian post-war consensus stretched to breaking point seemed to be an epidemic. In a medical crisis, we rely upon the knowledge and professionalism of our doctors. There is a science beyond the layperson’s understanding, requiring them to rationally abnegate their responsibility outside of themselves. In March 1980, as the economy was suffering from the beginnings of state retraction, Thatcher reminded the nation in her Party Political Broadcast that, “You feel worse before you convalesce.” Moreover, more emphatically: “You don’t refuse the operation when you know that without it you won’t survive.”
On one level, the second-person pronoun is the policing of common sense, in the Gramscian meaning of a sense commonly held, that which grounds consent. The instigation of an ideological and societal shift like the transition to neoliberalism relies upon borrowing the sheen of commonly held beliefs, though it is itself a rupture in dominant values. Common sense is not always good sense. In Gramsci’s Italian, senso commune simply means a set of beliefs held in common, often lacking in specificity or rootedness as a necessary condition of their commonality. As David Harvey reminds us in A Brief History of Neoliberalism (2005), common sense “can be profoundly misleading, obfuscating or disguising real problems under cultural prejudices” (39). By invoking a medical situation, for example, Thatcher borrows from a commonly held assumption—that in such a situation we naturally rely upon our doctors—to imbue her proposal with a patina of common sense, to depersonalize and rationalize her own worldview and insist upon its ubiquity. Total deference to the incomprehensible “science” of the market is asserted as a simple common-sense response to the crisis of the post-war consensus—the definition consciously and usefully elided with “good sense.”
Philosophically, this manoeuvre represents the abnegation of the subject, and the elevation to the primacy of the global structure of finance. Ellen Meiksins Wood has noted that this has parallels in other developments of adjacent thinking on the Left during the 1970s. In The Retreat from Class, she traces the development of what she labels “New True Socialism,” a school of thought which has its beginnings in an Althusserian structuralism characterized by “obsessive methodologism” (18), and thus an insistence on structural primacy to the extent of stripping the historical subject of agency. As the debate on the Left in the UK—conducted largely in the pages of the New Left Review—was won by the structuralists, and historical materialism marginalized, the philosophical vector of structuralism reached its apotheosis with post-structuralism. With this, Perry Anderson argues in In the Tracks of Historical Materialism, we have reached the “randomization of history,” in which culture, politics and economics are unshackled in favour of the vaguer “discourse” (48). In the post-structuralist model, as Wood also notes, “instead of a class with an identity, interest, and struggles of its own, the popular base of revolution was a more or less shapeless mass”: the individual subject is ill-defined and related to something other than historicity and class consciousness (23).
This is precisely the status of the neoliberal subject, which cannot see the historical contingency of its economic situation. The decoupling of the revolutionary impulse on the Left from its historical basis renders the contemporary subject history-less, a tabula rasa to be filled up by new logics of social organisation. “There is,” remarks Wood, “a certain incoherence in attempts to combine political practice, especially revolutionary practice, with a theory that acknowledges no subjects in history” (19).
Thinking the subject, on both ends of the political spectrum, was dominated during this period of interregnum in the 1970s by theories of crisis. In the context of decolonization, the humiliation of being bailed out by the IMF in the 1960s, and the shock of the OPEC oil crisis, the U.K. found itself in the midst of a new set of national questions. Thinkers on the Left and Right accepted, during this period, that the post-war consensus was no longer working. The period of stagflation that the nation had entered meant that the government was left with two choices: raise taxes and face the ire of the middle classes, or make cuts, and face the ire of the working class and the unions. Neither option seemed politically viable, and stagflation continued to run amok during the ‘70s. On the Right, these economic ill-fortunes became imbricated with a cultural crisis of values: “The ‘British way of life’” Stuart Hall wrote in Policing the Crisis, imitating the rhetoric of the Right,“is coming apart at the seams” (viii). As utopian urban projects of the mid-century were abandoned and underfunded, spectres of inner-city collapse were invoked in familiar images like graffitied walls and teenage gangs with absent, incapable parents. They confirmed crises like those invoked by Sir Keith Joseph’s notorious 1974 speech in Edgbaston, in which he bemoaned that “our human stock is threatened” by inter-class mixing and “single parents, from classes 4 and 5.” Insistence upon crisis on the Right was the justification for the painful ministration of the neoliberal intervention. Before opting for surgery—to borrow and extend Thatcher’s metaphor—we must first accept that something is deeply wrong.
It is worth noting that Frankfurt School philosopher Jürgen Habermas also invoked similar medical metaphors in the beginning of his 1973 Legitimation Crisis. The concept of crisis is, he tells us, “familiar to us from its medical usage,” referring to “the phase of an illness in which it is decided whether or not the organism’s self-healing powers are sufficient for recovery” (1). He continues: “the crisis cannot be separated from the viewpoint of the one who is undergoing it—the patient experiences his powerless vis-à-vis the objectivity of the illness only because he is a subject condemned to passivity and temporarily deprived of the possibility of being a subject in full possession of his powers.” By the time a crisis has taken root the patient is hamstrung by precisely this crisis; the means of escaping it are occluded by the qualities of the crisis itself. “We therefore associate,” continues Habermas, “with crises the idea of an objective force that deprives a subject of some part of his normal sovereignty. To conceive of a process as a crisis is tacitly to give it a normative meaning—the resolution of the crisis effects a liberation of the subject caught up in it.”
The acceptance of crisis in the nation is what would lead, in Habermas’s mind, to the abnegation of subject-status, the renunciation of political responsibility. As the world becomes more complicated, as the nation becomes subject to incomprehensible international shocks, we become increasingly dependent on elites with special access to and knowledge of the levers of political and economic power. We retreat, therefore, into a mode of “civil privatism,” in which the polity maintains an “interest in the steering and maintenance [Versorgung] performances of the administrative system but little participation in the legitimizing process” (75). The crises which had plagued the nation were beyond the rationally comprehensible purview of the public, and the public therefore demanded simply that the elites deal with them, without reference to how. “Civil privatism thus corresponds to the structures of a depoliticized public realm,” which “consists in a family orientation with developed interests in consumption and leisure on the one hand, and in a career orientation suitable to status competition on the other.” Habermas is writing before monetarism’s dominance, but it is notable how Thatcherite family values based on economic competition are foreshadowed in his understanding of the crisis in Britain. “There is no such thing” as society, she claimed, “There are individual men and women and there are families.”
Habermas suggests that the reason for civil privatism’s rendering of a “legitimation crisis” is that the levers of power under the post-war consensus were no longer producing the results which the polity demanded in return for their mandate. “Because the economic crisis has been intercepted and transformed into a systematic overloading of the public budget,” he writes, “it has put off the mantle of a natural fate of society. If governmental crisis management fails, it lags behind programmatic demands that it has placed on itself. The penalty for this failure is withdrawal of legitimation. Thus, the scope for action contracts precisely at those moments in which it needs to be dramatically expanded” (69). There are parallels here to the concerns that Thatcher took from Hayek: “Each demand for security, whether of employment, income or social position, implied the exclusion from such benefits of those outside the particular privileged group—and would generate demands for countervailing privileges from excluded groups.” Each saw different causes for the loss of legitimation, but both realized a ruinous contradiction at the heart of post-war economics. Each saw a situation in which, as Thatcher wrote, “everyone will lose” (The Path to Power, 51).
In many respects, Habermas anticipates a sense of civil abjection through the primacy of process-based, structural social organization. Though the outcomes he hopes for are opposite from the Thatcherite program, his diagnosis of crisis nevertheless limits the agency of the subject to a similar degree by its insistence that the organism will not be able to self-heal. By the time of Thatcher’s election in 1979, his forecast of a legitimation crisis was proving prescient, though inflected with bitter irony. Thatcher’s campaign was a transformation of the subject: her dissolution of the welfare-state and authoritarian-adjacent approaches to policing seemed to fuel precisely the waning of civil life which Habermas warned of. In many respects, Habermas firmly anticipated Brown’s category of homo oeconomicus, the remaking of the subject under neoliberalism’s contradictory regime.[1]
The point here is that neoliberal thinking was not, as Hayek and Thatcher have asserted, and as neoliberalism insists, the recovery of a natural law of the subject and the market structures in which that subject acts. Even Habermas’s observations of cultural and political analysis contradict this assertion. Yet by his diagnosis of crisis, the transmutation of the subject into the patient, he makes a theoretical move—typical of much thinking on the Left from this period—which is consistent with the constitution of the neoliberal subject. That is not to suggest that Habermas’ thinking influenced the architects of neoliberalism. Rather, it is to identify that those cultural vectors which told thinkers on the Left that the structure was eclipsing the subject are the same as those which made the neoliberal subject palatable. The renunciation of the historical subject as central to social analysis is precisely what gives the neoliberal conception of the market its privileged position as the natural, common sensical status that it still maintains today.
This think piece is part of a JHI Blog forum: “The Return of Political Economy in Intellectual History.”
[1] Among others, economist Richard Murphy has also noted that the concept of homo oeconomicus is fundamentally flawed, based on ahistorical assumptions about the predictable rationality of human behaviour.
Alexander Curtis is a PhD Researcher in English Literature at the University of Nottingham, with support by Midlands4Cities (AHRC). His research examines the cultural and literary expression of the social and class changes of Britain in the 1970s and 80s, with a particular focus on the miners’ strike of 1984-5. His writing has been published in Key Words journal.
Edited by Jacob Saliba.
Cover Image: “Margaret Thatcher meeting with Ronald Reagan at the White House,” via Wikimedia Commons.
