This paper of mine was first published 40 years ago when, as a young Oxford graduate, I was a founder member and editorial director of the libertarian conservative Selsdon Group (whose history and objectives are described in a Wikipedia article). It appeared originally in the January-March 1975 issue of the Political Quarterly, then under the editorship of Bernard Crick, one of Britain’s most respected left-wing academics, and was subsequently mentioned and quoted in Richard Cockett’s book, Thinking the Unthinkable: Think-tanks and the Economic Counter-revolution 1931-1983 (Harper Collins 1994). I resurrect it now, for a new audience, both for its possible historical interest and because, despite its youthful flaws and the fact that Britain has changed a lot since the 1970s, some of the central themes and arguments of that original paper remain sadly relevant, particularly given Labour’s lurch back to the Left under Jeremy Corbyn.
For example, despite the State’s monopolistic control of the monetary system, and the now well documented role western governments and central banks played in helping to bring about the 2008 global financial crash, the Left continues to get away with its old and questionable claim that monetary instability is an inherent characteristic of a free market economy, and proves the need for further extensions of State power. Similarly, negative attitudes towards private medicine and education, suspicion of the profit motive, and a failure to distinguish between altruism and collectivism, still remain widespread in Britain – especially in Scotland. As a result, most people don’t seem to notice the inherently coercive, choice-denying, and therefore morally questionable nature of monopolistic, tax-financed, State-controlled ‘public services’. Finally, and perhaps most significantly, emotive socialist rhetoric about ‘inequality’ retains its broad popular appeal, especially for the young, because too few people perceive the inherent conflict between equality and liberty, and too many confuse equality of opportunity with equality of outcomes. As long as these ideological blinkers remain as widespread as they are, socialist prejudices will continue to misinform political debate within our colleges and universities, as well as within the now culturally dominant worlds of British film and television. My 1975 paper was one of my early attempts to swim against this continuing intellectual tide.
Philip Vander Elst, October 2015.
‘RADICAL TORYISM’ – The original text of January-March 1975
Recent opinion polls, showing sharp fluctuations in the public support enjoyed by the major parties, demonstrates very clearly the people’s complete uncertainty about whom to entrust with the reins of office. This doubt is allied to and provoked by an uneasy impression that the underlying health of British society is gradually and inexorably deteriorating.
Inflation is accelerating from 15% to 25% per annum (some economists predict a future annual rate of nearer 40%); strikes and shortages are becoming an apparently inevitable part of “the British way of life”; the community is increasingly held at gun point by trade union militants and overall the use of violence in the service of political ends is in evidence to an extent that would have seemed unthinkable and unacceptable ten years ago. In addition to all these sores, we are lumbered with a Labour Government which appears intent on transforming this country into a slightly more sophisticated version of Albania. Everywhere we can observe the unmistakable signs of economic and social decay but rarely are we offered a more than skin-deep explanation of their cause.
In this situation it is absolutely vital that the Conservative Party should evolve a convincing critique of these developments if it is to give the country an authoritative and salutary lead in the months ahead.
Events move rapidly and unpredictably and it is therefore usually rash to seek to attribute contemporary tribulations to only one cause. Nevertheless, it seems undeniable that in Britain we have been witnessing during the last fifteen years a long-term and relatively uniform decline in the health of our economic institutions and in the quality of our social life. This leads one to reflect that there has been an overriding factor at work which has disproportionately influenced the rake’s progress of the past decade. The enlargement of the role of Government has surely been that factor.
Since 1930 the degree of State intervention in the economy has steadily intensified. The pre-war years saw the erection of the principle of protectionism into a major pillar of public policy (largely at the instigation of our own Party) in response to and as an exacerbation of the suicidal “beggar-my-neighbour” tendencies[i] of the epoch’s rival economic nationalisms. Tariffs went up and a significant proportion of British industry was cartellised. This programme, combined with the natural but shortsighted resistance of the trade unions to relative reductions in money wages, inevitably provoked unemployment and constricted trade, thus giving unnecessary hostages to fortune to the enemies of capitalism who, by a rich irony, were able to make political and intellectual capital out of the troubles provoked by their own brand of interventionist economics.
The War constructed a centrally directed siege economy which was gleefully inherited by the post-war Socialist Government. The late 1940s observed the incorporation into the public sector of the bulk of the present nationalised industries, many of which were already private monopolies as a result of measures implemented by the Tories in the 1930s. The fight to preserve competition and choice had by then been lost by default, a pattern that was to repeat itself with depressing regularity. In the same period, the Attlee Administration squatted possessively over a juggernaut of controls and rationing that still burdened Britain long after the countries she had defeated in war had dismantled their comparable apparatus of restriction and subsidy. While Germany and Italy adopted a liberal economic policy and paraded their respective “miracles”, Socialist Britain continued to wallow in stagnation, austerity and defeatism.
The Golden Age of Conservative Rule
The first Conservative Government of the 1950s under Churchill, ushered in a spell which, compared with what has followed, can be looked upon as a truly golden age. Inflation was mastered and taxes cut largely because public spending as a proportion of the total national product was continuously reduced,[ii] a lesson in economics that was quickly forgotten after 1957; food subsidies were swept away, steel was denationalised and the BBC’s monopoly of television was broken up.
In the 1960s, however, the scene began to darken again as politicians were lured by the bright words and impressed by the extravagant claims of a new rising elite of collectivist economists and commentators, preaching the new religion of “indicative planning”, backdoor nationalisation, CBI-TUC corporatism and prices and incomes policies; not to mention the rest of the dreary paraphernalia of boards, committees and commissions which have bled and hounded private industry ever since. Interventionism in economics was paralleled by interventionism in other fields, notably in education, the most important victim of the intolerant egalitarianism of the 1960s. The consequences were appalling. Public expenditure as a ratio of the GNP started rising once more and inflation became chronic. The burden of the “universalist” Welfare State on the taxpayer weighed more and more heavily as the quality of the services it provided deteriorated. Grammar and independent schools began to topple one by one before the onslaught of the State and the local authorities, while standards fell (see the wealth of documentation furnished by the Black Papers) and lawlessness and violence were seen to prevail to a disqueting extent in our streets, our schools and our universities. That, broadly speaking, was the record and legacy of the 1960s under both Conservative and Labour governments.
Conservatives’ Lack of Nerve
The 1970s have only witnessed a continuation of the same policies along a wide front, necessarily accompanied by an intensification of the same ills. The bright hopes of a fundamental change of course aroused during the honeymoon “Selsdon” period were dashed by the last [Heath’s Tory] Administration’s ideological capitulation to the Socialist Movement in the unions and the media. The latter’s bitter opposition to change and fanatical determination to persist in clinging to the economics of mercantilism and to Bismarkian social policies, destroyed the central aim of Tory strategy: that of bringing about a massive transfer of resources from the public to the private sector. Prompted by failure of nerve, lack of imagination and intellectual confusion, the last [Heath] Government committed one blunder after another, ultimately crowning its folly by fighting an election as the champion of a statutory incomes policy against all its better instincts, ignoring countless warnings and in total repudiation of the 1970 [Tory] Party manifesto. The outcome of the election – pace the pundits – was not in the least surprising. Disillusioned Tories, bewildered by the U-turns and failures of the preceding four years, fled to the Liberals or abstained, and Mr Heath had the ignominy of leading us to the first defeat after only one term in office suffered by any governing party since 1931.
The central theme of this sad story of 40 years of decline has been the growth of State control accompanied by economic storms, the worst inflation in a quarter of a century, mounting (and justified) disgust with politicians, and alarming symptoms of social disintegration. As the area of State action has widened, so the legitimacy of its authority has faced increasing defiance. This may strike the observer as paradoxical, but only at a superficial level. Experience has by now rubbed in one very stark lesson: namely that there is an inverse relationship between the extensiveness of the State’s functions and its capacity to discharge them properly. The more tasks and responsibilities the State undertakes, the greater are the pressures it has to face from all quarters, the more numerous are the conflicts of interest it has to resolve, the greater is the number of balancing acts it is called upon to perform, and the longer grows the list of promises broken, opportunities lost and hopes unfulfilled. Graver still: the more is expected of Government, the deeper is the inevitable disenchantment with its equally inevitable tale of failure. Men begin to lose faith in democracy, in parliamentary institutions and in liberal solutions to social problems. Worse still, they begin to lose faith in themselves and to look for redemption to shining figures on horseback who have no love for the free society and the rights of individuals.
So much for the past. Now, sadder and wiser, we must look to the future and mend our ways. The long road back must begin with a return to first principles. These were perhaps best enunciated by Sir Winston Churchill in a speech to the House of Commons on October 27, 1949: “I was brought up to believe that taxation was a bad thing but the consuming power of the people was a good thing…that trade should be regulated mainly by laws of supply and demand and that, apart from basic necessaries in great emergencies, the price mechanism should adjust and correct undue spending at home…
I was also taught that it was one of the first duties of Government to promote that confidence on which credit and thrift, and especially foreign credit, can alone extend and grow. I was taught to believe that those processes working freely within the limits of well-known laws for correcting monopoly, exploitation and other measures in restraint of trade…that those principles would produce a lively and continuous improvement in prosperity. I still hold to those general principles.”
If the governments of the 1960s and the 1970s had, like Churchill, held “to these general principles”, how different things would have been! In particular, we would not have the misfortune to be living in a society in which the State takes 50% of the national wealth in taxes; in which 25% of the total working population is in public employment and in which a third of the people are council tenants. A country like Britain, which has traditionally bred the independent-minded merchants, artisans, poets and seamen so crucial to the enterprise of an island straddling the sea lanes to four continents, would not now find itself little more than a nation of state pensioners existing as the servants and tributaries of bureaucracy in a land starved of achievement and soured by collectivism.
An Alternative Vision of Society
The reaffirmation of the belief in the desirability of limited government that flows naturally from the tradition of Tory scepticism is not in itself sufficient. To carry conviction with our fellow citizens we must demonstrate that our alternative vision of society is morally richer and spiritually more satisfying than Socialism. Instead of always attempting to outbid our opponents in the business of bribing the electorate with bigger social benefits and faster growth rates, we should appeal to a larger dimension of thought and feeling. We should emphasise that freedom of choice between alternative ends and means is the essential condition of moral action because without the freedom to make mistakes and learn from them we cannot develop any sense of responsibility or any sensitivity to moral values. Socialism is immoral just because it seeks to concentrate all choices about health, housing, education and remuneration in the hands of the State. Socialism, for all its raillery against big business, is a subjection of the individual to the greatest monopoly of all: Government. Since nothing is as corrupting as political power and no competition is as frenetic and soul-destroying as that for administrative promotion and bureaucratic patronage, the Socialist State is, of all societies, the most materialistic and hard faced. That is the message the Conservative Party should be shouting from the rooftops. Such an approach would almost certainly be understood and appreciated at a time of unparalleled disenchantment with politicians and their pledges.
When today men hold Government in such small regard, should it not be possible to harness this current and turn it against Big Brother? Are not people in an affluent society anxious for more freedom in the disposal of their incomes? Are not people fed up with the poor quality of service provided by the public sector? Has not one study after another shown that a substantial majority would be prepared to spend a higher proportion of their incomes on health and education if taxes were lower and choice was greater? Is it not the greed for power of the modern State that is responsible for the existence of the despised “candy floss” society? [Harold Wilson’s characterisation of ‘Tory Britain’ in the early 1960s]. Are people to be criticised for spending disproportionate sums on horse racing, alcohol and nightclubs, when these are some of the few remaining areas of consumption in which they can exercise their freedom of choice?
It is about time that Conservatives decided to concentrate their energies on denouncing the pharisaical attitudes and hypocritical rhetoric that run through Socialism like a poisoned vein. The arguments are on our side. All that is required to use them is a little intellectual insight, a little imagination and, above all, a little courage and self-confidence. Our worst enemies are our own anxieties and doubts.
The long-term omens are favourable to an attack on Socialism. Social changes are taking place which, if exploited intelligently, could undermine any popular attractions that Socialism might have left. The growth of the service sector in all advanced industrial economies is opening up a wider field for the operation of small, competitive, decentralised businesses and, by the same token, enhancing the attractiveness of owning and working such enterprises. This coincides with the desire of many young people to be their own masters and not to have to work from nine to five in offices and spend hours of the day commuting in hot, overcrowded trains. A party advocating the merits of choice and competition should touch a receptive chord and meet with a growing response.
The basic alteration in the distribution of income that has taken place in Britain in the last 30 years should also favour the cause of individualism. The old pyramid-shaped income structure with a few rich people at the top and the mass at the bottom of the pyramid, has been replaced by a diamond-shaped pattern[iii] in which the great majority are affluent earners in the middle of the diamond, paying their full share of taxes. This means that the Socialist prejudice in favour of high public expenditure and high taxes conflicts with the economic interests of a growing “middle class” which resents bureaucratic interference, whether it comes from ‘Carlton Brown’ in the Treasury or the local big nobs at County Hall. The recent general strike called against tax increases in Denmark and our own ratepayers’ revolt can be seen as portents of a “white collar” revolution.
Our assault on the Socialist State should be principally directed against two targets: the “universalist” Welfare State (as opposed, of course, to the civilised principle of succouring the casualties of society) and the nationalised industries. In the first case we should espouse a new principle: that the State confine its role to laying down and policing minimum standards in health and education while the actual services should in the main, or preferably entirely, be provided by competing private agencies. Market prices should be paid at the point of consumption to avoid the present massive distortion of resources, and the poor should receive directly, selective subsidies – cash payments and/or vouchers – to enable them to pay for these services. Such a major reform would sweep away the present arrangements under which choice is minimised by unaccountable State monopolies, financed through general taxation which hurts everybody and only leaves the rich the privilege of paying additional fees for superior private provision. The introduction of education vouchers[iv] would be of special value in that it would break the growing monopoly power of the statist-egalitarian-comprehensivist lobby to dictate educational policy and methods to parents. The unprecedented demand for the benefits of independent schooling, in spite of sharp increases in fees, indicates that such a policy would not only be right but politically popular and adroit.
Very similar considerations apply to the case for denationalisation. The break up of existing State monopolies[v] (either by selling them off gradually to the private sector or by simply allowing new competitors into the field) would not merely widen choice and improve efficiency; more important, from a Conservative point of view, it would furnish a marvellous opportunity for the establishment of a popular vested interest in the market economy. If denationalisation was implemented in such a way that it created millions of small new shareholdings (as in Germany), the Labour Party would no more dare renationalise than it is prepared at the moment to abolish Independent Television. The free society would become the beneficiary of a new and powerful safeguard.
The Need For Tory Boldness And Vision
There will always be those in the ranks of the Conservative Party who will regard such a strategy as “impossible” or “politically unacceptable”. The types who manifest these reactions are, however, precisely those who for as long as one can remember have talked glowingly about “the middle way” and Tory “pragmatism”. Their counsels have reigned supreme for a long time and what has been the outcome? A country which has steadily become more Socialist despite the fact that Tory governments have held office for most of the past 40 years. That is not a record that anyone looking at the present condition of Britain can be proud of. We can only move forward by resolving to have done once and for all with the discredited policies and defeatist slogans of our corporatist past, and to face the future not with fear, but with a renewed and serene determination to win the battle for freedom.
The original footnotes (1975)
[i] Initially triggered off by the mismanagement of the monetary system by the Federal authorities in the USA – a perfect example of the disastrous global consequences of State control.
[ii] Partly a reflection of the reduction in military expenditures as a result of the end of the Korean War.
[iii] See How Much Inequality?, G. Polanyi & J. B. Wood, Institute of Economic Affairs.
[iv] Equivalent in value to the average cost of a secondary school place in the State sector and which could be cashed at any secondary school in the State sector or the private sector.
[v] None of which are genuine “natural” monopolies.
The really depressing bit is that what goes around comes around. All that ‘socialism’ failed then has simply been replaced by ‘regulationism’ now. Just because socialism was utterly defeated in 1991, does not mean that socialist collectivist and interventionists have gone away. They have just morphed themselves into bureaucrats.