Conservatives Converted

Thinking the Unthinkable
by Richard Cockett
HarperCollins

This is the tale of how Britain, or more precisely the ruling faction in the Conservative Party, was converted from collectivism to economic liberalism between the 1930s and 1980s.  The unthinkable happened when Mrs Thatcher started implementing free-market policies which in the 1930s and for many years thereafter were widely seen as antediluvian.

For anyone interested in free-market think-tanks, of which there were apparently 166 at the last world-wide count by the Atlas Foundation, this book is a must.  Likewise, those desiring to win the hearts and minds of political parties will find Thinking the Unthinkable absorbing.  As Richard Cockett makes clear, to win over the politicians you have first to convince the opinion formers;  and to ensure the opinion formers are on side, you may have to start while they are still at school.  When Friedrich von Hayek founded the Mont Pelerin Society in 1947 he was well aware of the long-term nature of the task.

UNDERESTIMATED EVENTS

As far as the general, non-British reader is concerned the book contains much detail which may seem tedious.  Nonetheless, it raises a number of issues of wide interest.  One which never ceases to fascinate historians is the relationship between people, ideas and events.  Cockett sometimes gives the impression that circumstances were influenced overwhelmingly by people rather than vice versa.  Admittedly he occasionally acknowledges the role of events as in the following passage from Milton Friedman's 1976 Nobel Prize lecture:

"Government policy about inflation and unemployment has been at the centre of political controversy.  Ideological war has ranged over these matters.  Yet the drastic change that has occurred in economic theory has not been the result of ideological warfare.  It has not resulted from divergent political beliefs or aims.  It has responded almost entirely to the force of events;  brute experience proved far more potent than the strongest of political or ideological preferences".

On the whole, however, Cockett tends to play down the extent to which Keynesianism was a response to the depression of the 1930s and monetarism a reaction to the inflation of the 1970s.  Little matters like the two oil shocks which rocked the world economy don't rate a mention.  He is certainly entitled to give credit to the Institute of Economic Affairs for its role in predicting the inflationary outcome of Keynesian policies and working out "a coherent, intellectually satisfying alternative" so that, "when the time came for the change of tack in the mid-1970s, there was really one alternative and, by implication, one philosophical position to adopt — that of the IEA".  As the term counter-revolution suggests, however, it was essentially the product of the shortcomings of the revolution that preceded it.

COUNTER-COUNTER-REVOLUTION?

And this leads to a still broader question raised by the book.  Will the counter-revolution itself provoke a reaction?  Early on Cockett observes that British economic history over the last two centuries can be interpreted in terms of the Hegelian dialectic (of thesis giving rise to antithesis which in turn produces a synthesis) and in his epilogue he suggests that "we are now at the point where the counter-revolution against economic liberalism will start, and the Hayekian campaign of intellectual persuasion provides the modern model of how to effect the next intellectual counter-revolution".

The likelihood of any such revulsion against economic liberalism and the form it might rake are yet to be determined.  Cockett seems to feel that the failure of economic liberals in Britain to come to grips with Brussels is evidence of waning powers, but this is a somewhat parochial concern.  (A common market is anyhow nor necessarily inimical to a free market).  Already a number of possible challengers are lining up.  Cockett sees Kenneth Galbraith with his emphasis on the inherent instabilities of capitalist systems as one such challenger.  Another is the green movement with its prejudice in favour of centralist and interventionist solutions to the world's ills.  A third, as yet perhaps littie more than a vague hankering, is the growing emphasis being placed on the supposed needs of the community as opposed to those of the economy.

The coming backlash could take many forms.  It would be ironic, however, if economic liberals were destined to repeat the fundamental error of the Marxists in assuming the dialectic stopped with them and that the synthesis never gave rise to its own antithesis.  As in so many walks of life one solves one problem to create another.

For those readers of a less philosophical and more entrepreneurial bent Thinking the Unthinkable offers some interesting scope for arbitrage due to its containing a quite sensational libel.  Because the publisher has agreed to retrieve unsold copies in the UK, it is now a rare commodity there and copies (including the offending passage) are being re-exported from Australia.  They can be expected to remain at a premium until the paperback (and expurgated) edition is eventually published.