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United Kingdom

The United Kingdom: Symbiosis or Division

Joel Kriger
In George C. Lodge & Ezra F. Vogel (eds.)
Ideology and National Competitiveness
. Harvard Business School Press, 1987.

THE EMERGENCE OF A COMMUNITARIAN-INDIVIDUALIST SYMBIOSIS

Limited state, laissez faire competition, interest-group pluralism: these elements of individualism dominated economic policy in Britain with little interruption until the beginning of the twentieth century and up to the start of the First World War. But this is only half the story of Britain's ideological formation.

Individualism in economic affairs was, from an early period, counterbalanced by communitarianism in the evolution of political rights. Throughout the nineteenth century, citizenship rights were expanded in Britain. Civil rights, the first rights of citizenship, are those necessary to individual freedom -- free speech, liberty of person, the "right to own property and conclude valid contracts." By 1918, when political rights of franchise and participation were universalized as explicit second rights of citizenship, the third element of citizenship -- social rights -- was acquiring ideological and programmatic significance. By the late 1930s, citizenship came to include the right to economic welfare and "to share to the full in the social heritage and to live the life of a civilized being according to the standards prevailing in the society.'' The individualism of laissez faire was accompanied by the communitarianism of a welfare state ethos.

The mix between economic ideals of individualism and the political/social pull communitarianism was not altogether harmonious. Communitarian pressures from below -- for fuller participation in the life of the community, for the political rights that antedate full social rights -- were resisted as economic and market-based distinctions took precedence. The current century has not demonstrated any unambiguous reconciliation between the individualism of the marketplace and the universalism of citizenship rights. "[I]n the twentieth century, citizenship and the capitalist class system have been at war," observed T.H. Marshall. "perhaps the phrase is rather too strong, but it is quite clear that the former has imposed modifications on the latter… Social rights in their modern form imply an invasion of contract by status, the subordination of market price to social justice, the replacement of the free bargain by the declaration of rights."

Thus, from the organic Old Tory justification of the hierarchies of Elizabethan England, to those who have argued for popular sovereignty, to the twentieth-century tensions between individualism and communitarianism: the individualist ethos of capitalist industrialism mixed with the communitarian impulses that motivated political reform.

CONTEMPORARY CORPORATISM

Corporatism justifies communitarian theories about the way society should be organized and political choice exercised. Pluralism, which involves a very different set of claims, has been introduced to help legitimize a political system sustained by individualist ideologies. The distinctions are significant:

Whereas pluralism assumes a competition among divided interests with the struggle for factional advantage resulting in a political equilibrium which defines the policy options of a weak state, corporatism presupposes "a shared interest in collective existence" and cooperation expressed through the strategic exercise of power by a strong central state.

It is perhaps not too much to say that the resurgence of "corporatist theory" in academic circles in the 1970s and the efforts to apply the theory, in defiance of its fundamental logic, to a set of institutional practices in Britain and elsewhere, represent an important battle for ideological direction in these societies. However, the resurgence of corporatism can also be construed as a serious effort to defend communitarian traditions against the clear indication of their demise in the United Kingdom.

Until the twentieth century, "corporatism" has referred exclusively to state corporatism --corporatism from above. The fascist states of Italy and Germany in the 1930s were "exemplary" instances of modern European corporatism. But in these countries corporatism was no more than a "decorative facade'' for an organic unity attained by consistent repression. However, a new variant of the concept of corporatism -- corporatism from below or societal corporatism -- has emerged with growing academic support as an explanation of contemporary Britain and other capitalist democracies. Philippe Schmitter characterizes societal corporatism as the system of representing interests that typically accompanies the "postliberal, advanced capitalist, organized democratic welfare state.'' In what has become the standard reference point for subsequent debates, Schmitter defines contemporary corporatism in ideal-type terms as:

A system of interest representation in that the constituent units are organized into a limited number of singular, compulsory, hierarchically ordered and functionally differentiated categories, recognized or licensed (if not created) by the state and granted a deliberate representational monopoly within their respective categories in exchange for observing certain controls on their selection of leaders and articulation of demands and supports.

In this version of corporatism, the directive capacities of the state increase, and "interest intermediation" becomes systematized along less plural and less voluntary lines of power: membership is compulsory in the few powerful peak associations (trade unions or business confederations); a single organization negotiates binding settlements that are recognized as legitimate by the state; and in return for this "representational monopoly," the representatives of corporate interests deliver support for agreed policies and discipline their members.

The traditional corporatist premise of organic unity is preserved in this new theoretical amalgam. For example, an incomes policy -- the product of tripartite negotiations through which government secures the support of business and labor -- becomes the modern equivalent of the medieval cathedral, whose painstaking construction represents the solidity, organic unity, and ostensible harmony of the society. The state manipulates claims so as to achieve a compromise that freezes the balance of class power in the interests of economic stability and well-being. When this is successful, ideological symbiosis is enhanced: the representation of interests that is fundamental to individualism may be harmonized with community needs.

In the end, however, corporatist forms of interest intermediation are transitory and contradictory for a number of reasons. First, the process of elite political bargaining over economic issues tends to erode the broad membership support needed for the successful implementation of policy accommodations. Second, the focus on the "crisis management" in these corporatist agreements neglects structural problems, for example, processes of "de-industrialization" or the general decline in national competitiveness. Third, because capitalist and state interests can keep critical issues off the bargaining table -- sectoral investment strategies, restrictions on the flow of capital abroad, corporate tax and profit rates -- neither the trade unions nor allied parties feel obligated to accept and enforce agreed policies.

Nowadays it is increasingly obvious that corporatist institutions cannot fully contain the tension between individualist and communitarian goals, particularly in their asymmetrical and limited exercise in Britain. Accordingly, the decline in Keynesianism is more than a decline in an approach to economics. It represents decline in support for a kind of society, the eclipse of communitarian ideals. George Ross observed that when growth slackened and employment fell precipitously, "[p]ainfully-institutionalized positions of 'corporatist' power which social groups had negotiated in the postwar boom to maintain their situations are threatened." Growth reduced distributional conflicts but now economic distress has removed the central basis for consensus among business, labor, and government elites. Interests are divided and there is no longer a "postwar settlement" -- a compromise involving "full" employment through governmental management of demand, and increased social and welfare expenditures in return for relative social harmony and labor peace. Keynesianism meant that conflict would be mediated through nonmarket political institutions, as "[p]olitics turned into an interplay of coalitions -- giving rise to corporatist tendencies of direct negotiation, either between organized groups -- particularly labor and capital -- under the tutelage of the government or between each group and the government.''

THE DECLINE OF IDEOLOGICAL SYMBIOSIS 
IN THE 1970s

With Keynesianism waning and the corporatist traditions largely discredited, the long cycle of the British individualist communitarian symbiosis has undergone increasing stress. In the 1970s economic growth slowed, and a welfare state consensus that had spanned party identities came undone.

The Conservative Party of R. A. Butler and Harold Macmillan had confirmed the postwar settlement. They neither attacked the welfare state that had grown so dramatically during the Labour government of Clement Atlee nor did they forsake the goal of full employment, even under the mounting pressure of inflation and recession. Although it may seem remarkable today, the Macmillan government was genuinely dismayed when efforts to reduce inflation through monetary policy during the height of the 1958 recession engendered a 2.8 percent unemployment rate in January 1959. And we should keep in mind that the Conservatives under Macmillan introduced the classic British exercise in planning -- the National Economic Development Council (NEDC), composed of representatives of unions, private and public management, and the government.

The "one-nation" Tories were undoubtedly committed to the terms of the postwar settlement, notably to expand the welfare state and to achieve full employment. In fact, this commitment of Conservatives and mainstream Labour alike to a common road of mild European social democratic reforms is revealed in the language of British political studies. "Butskellism" (after Butler and Gaitskell) and the less common "MacWilsonism" (after Macmillan and Wilson), represent the high watermark of interparty consensus and the dominance of Keynesian-welfarist communitarian ideals.

Viewed in this context, the 1970s were a crucial period of increasing economic strain and political fragmentation. Britain's ideological orientation was also undergoing a far-reaching revision. The general phenomenon can best be understood by reference to industrial relations.

INDUSTRIAL RELATIONS

Throughout the 1960s and 1970s, a succession of Labour and Conservative governments tried with little success to restructure labor-management relations to reduce wage costs and industrial conflict, and to increase productivity. These government efforts to reform the industrial relations system are especially interesting because they seem to draw in equal measure upon individualist and communitarian ideals.

Thus, when there was increasing concern in the mid-1960s that the proliferation of informal shop-floor agreements reflected a "breakdown of the normative order," encouraged work stoppages, and contributed to "uncontrolled movements of earnings and labor costs," Wilson's Donovan Commission accepted as inevitable that divisions of interest at every industrial level would generate multiple informal and contractual agreements. The Commission's recommendation that multi-tier agreements should be formalized, centralized and rendered enforceable reflected essential individualist precepts: the centrality of contract; an acceptance of an adversary relationship between labor and management as natural; the fragmentation and individuation of interest/need; the role of government as a limited purveyor of environmental conditions to encourage private solutions.

At the same time, British governments attempted to implement corporatist arrangements. In the 1960s, efforts were made first by the Conservatives and then by Labour to encourage union acceptance of voluntary wage restraints via participation in planning institutions inspired by the French model of indicative planning. This further effort at tripartite communitarianism principally involved the National Board for Prices and Incomes. The Board, commissioned to regulate wages in accordance with national interest, was briefly successful with an incomes policy inaugurated in 1965.

The most impressive and significant neocorporatist arrangements occurred, however, after the oil shock of 1973-74. The last Labour government sought to stabilize the economy at once and to involve the Trades Union Congress (TUC) in an expanded agenda of shared responsibility for economic and social policy. The Labour strategy was planned during the trade-union struggle with the Heath government over the 1971 Industrial Relations Act (which mandated the registration of all unions and assigned financial liability to them when their members went on nonsanctioned strikes). The "Social Contract," agreed to by the TUC-Labour Party Liaison Committee in February 1973, called for wage and price controls "within the context of coherent economic and social strategy-one designed both to overcome the nation's grave economic problems, and to provide the basis for cooperation between the trade unions and the Government."

It is well known that the pressure of mounting inflation and a substantial run on the pound quickly removed the more expensive (and, for the TUC, most attractive) elements of the "Social Contract," especially the promises of expanded social services and of industrial and economic democracy. After the electoral victory in February 1974, the new Labour Government and the TUC agreed to a formal (voluntary) incomes policy in 1975. New terms were bargained for each of four annual "phases," with decreasing TUC, trade union, and rank-and-file support. As Stephen Bornstein observes:

Like all earlier British attempts at incomes policies . . . the Social Contract was unable to last beyond a few years. The increasingly conservative fiscal and social policies of the government in combination with the accumulation of worker resentment and the inability of unions to impose their will on their own shop stewards and members, produced an explosion of wage militancy in the winter of 1978-1979. The strikes, and the stubborn and maladroit manner in which the Labour Cabinet attempted to handle them, were instrumental in undermining the authority of the government and bringing its defeat in the election of May 1979.

The traditional communitarianism that underlay class solidarities had subverted the newer interclass, but nonetheless communitarian, consensus. Two points seem clear:  First, the period of the Keynesian welfare state involved policies having contradictory ideological resonance. Individualism found expression in the reinforcement of divided interests and the strict application of contract implied by the Donovan Commission; communitarianism found expression in the neo-corporatist exercises of voluntary wage constraint and tripartite planning in the national interest for community need, culminating in the Social Contract of the Wilson (later the Callaghan) government. Second, neither ploy was terribly successful. Nor indeed were the statutory restrictions on the trade unions attempted by the first Wilson government ("In Place of Strife") nor by Heath (the 1971 Industrial Relations Act). The individualist approach foundered because of resistance located in private interest and competition; the communitarian approach foundered because corporatist arrangements cannot withstand the extreme pressures of economic crisis. It is perhaps optimistic, therefore, to refer to this pattern as ideological symbiosis. Nevertheless, through 1979, two coexisting and well-balanced ideological motifs oriented British approaches to industrial relations, alternating one with the other. Has the present government continued this pattern?

THE IDEOLOGICAL DIRECTION OF THE 1980s

"What have you changed?" someone asked the new prime minister in 1979, and Margaret Thatcher replied, "I have changed everything." While this was a mere boast, Thatcher unwittingly revealed the central truth of what she really had changed. In response to a question from Anthony Sampson, she noted with characteristic clarity, "I've always regarded the Conservatives as the party of the individual." Thatcher's is perhaps an uncommon interpretation of a party more typically associated with organic symbolism, Disraelian social reform, and a patrician regard for the permanence of community defined by hierarchical and functional divisions. And, of course, there is still the continuity of parliament and parties, and of class divisions and monarchical loyalties. Thatcher has not "changed everything," but Thatcherism does represent a fundamental ideological transformation, in two ways. It is different ideologically, but it is also more highly charged by ideology.

Traditionally, the Conservatives in Britain are less hampered by ideological commitment when they make policy than are their Labour counterparts. Beer once observed that "the Conservatives have been regarded as the party that has no ideas but which can govern."30 The opposite is closer to the truth today. The Thatcher government has significantly recast the ideological orientation toward neo-individualism.

During the sharp economic downturn in the 1970s, the existing political and economic arrangements were severely jeopardized. The potential fragility of Britain's ideological consensus is most readily apparent in specific areas of ideological conflict: industrial relations, the role of the state in economic management, and the rights and duties of community membership.

Industrial Relations

There are strong indications that the Thatcher Government has altered the hybrid "Butskellite" approach, with some dramatic consequences. As Huw Benyon and Peter McMylor observe:

From the beginning, Thatcher had been anxious to break the old consensus.... the old class compromises were not for her, neither were collective forms of life and relationships. With all corporate forms apparently in crisis [such as income policies, etc.], the powerful articulation of individualism was made to seem both fresh and plausible. In this way of thinking, the phrase 'right to work' became deflected from its original social-democratic meaning of a public commitment to full employment, towards a citizen's right to sell, unhindered, one's labour as individual in the market-place.'

This ideological shift has involved a fundamental change in the meaning of labor-management disputes. They have become, under Thatcher, an opening for defeating the communitarian character of trade unions and for further removing the government from future corporatist-tripartite planning. Like the Butskellite pattern, this government's industrial relations strategy has two central elements, but both are heavily individualist.

The first element involves three pieces of legislation -- the Employment Acts of 1980 and 1982, and the Trade Union Act of 1984 -- that "individuate" trade unions, thereby substantially reducing the rights with which British trade unions have been collectively endowed since 1906. Taken together, these acts hold union officials financially and legally responsible for a wide range of illegal activities (including large-scale picketing, strikes to protest government activity, and secondary strikes); severely restrict the institution of the "closed shop"; expand the ability of owners to dismiss strikers and union officials; and remove legal immunity from unions and officials who authorize otherwise legal industrial action without meeting particular balloting procedures.

Thatcher's second industrial relations strategy involved planned confrontations with crucial trade unions. Soon after becoming leader, but before the 1979 general election, Thatcher commissioned two internal Conservative Party reports and was considerably influenced by them. In the first, Lord Carrington-who was her Tory predecessor, Edward Heath's energy minister-dispelled a widely held Tory belief that Heath's failed showdown with the miners in 1974, when the Conservatives lost the election Heath called during a national miners' strike, had been a consequence of weak leadership. Instead, argued Carrington, society was being challenged by strategically powerful and self-interested groups of workers in the energy sector. Society was at a disadvantage in that sector's industrial disputes because of the general economic dependence on electricity and because neither miners nor electricity generating plant personnel could be replaced by the armed forces during a strike.

The second report, a widely leaked document written for Thatcher by Nicholas Ridley, laid a blueprint for a political plan to overcome the technological and organizational problems identified by Carrington. Referring to the likelihood of a "political threat," the Ridley Report urged a carefully orchestrated series of confrontations with unions in the energy sector and in other basic industries. The early encounters would be with the weak and divided unions in the steel industry and would work up to an ultimate challenge to the National Union of Mineworkers (NUM), who had "defeated" the last Conservative government. Appearing first in The Economist in May 1978, Ridley's five-point plan had these features:

1. Profit (return on capital) figures should be rigged so that an above-average wage claim can be paid to the "vulnerable" industries.

2.The eventual battle should be on ground chosen by the Tories, in a field they think could be won (railways, British Leyland, the Civil Service, or steel).

3. Every precaution should be taken against a challenge in electricity or gas. The most likely battleground would be the coal industry. A Thatcher government should therefore: (a) build up maximum coal stocks, particularly in the power stations; (b) make contingency plans for importing of coal; (c) encourage the recruitment of nonunion lorry drivers by haulage companies to help move coal where necessary; (d) introduce dual coal/oil fueling in all power stations as quickly as possible.

4. The greatest deterrent to any strike would be "to cut off the money supply to strikers, and make the union finance them."

5. There should be a large, mobile squad of police equipped and prepared to uphold the law against violent picketing. "Good nonunion drivers" should be recruited to cross picket lines with police protection.

This is not the place to rehearse a detailed narrative of the year-long miners' strike, but the Ridley plan for remedying the problems raised by Carrington leaves the unmistakable impression that both the steelworkers' strike of the winter of 1979 and the miners' strike of 1984-85 followed firm governmental policy. For our purposes it is enough to suggest that through legislation to vastly reduce the community rights and collective identity of unions, through a reversal of meaning in expressions like "right to work," and through well-planned strategies of political confrontation with leading unions, Thatcher's industrial relations policy has stretched the attenuated ideological symbiosis to its limits.

Britain and its unions are now decidedly in the individualist position of adversaries. Trade-union elites can foster natural competition against management and against other unions, since they have obligations to a self-interested bargaining unit. Can government action strategically blend these factors into a broader concern that would encourage union participation in tripartite neocorporatist bodies? Or will the government challenge trade unions to fight for their interests against that of the national community, goading them into strikes that further de-industrialize Britain, weaken competitiveness, and chill the investment climate? Britain today does not provide easy solutions to the problems of industrial relations. There are, however, alternative agendas available to policy makers and private sector executives. Their ideological implications are deep, and their costs of failure are quite different from policies pursued today.

Astute government policy could "Germanize" the British industrial relations system by recognizing the disparate political perspectives and economic interests of laboring people. The result could be to increase participation of workers and trade unions in areas of management prerogative. That effort might help increase the productivity and efficiency of British firms by linking the interests of skilled, unionized, highly motivated workers more closely to those of managers and government officials, whose concern is with economic performance. Indeed, such developments in industrial relations might generally invigorate Britain's consensual traditions. However, government can make that happen only by first diminishing the force of Britain's other ideological tradition of adversarial/contractual dispute, and then by encouraging a balance of rights and duties more generally regarded as fair through welfare provision and macro-economic policy designed to substantially reduce unemployment.

CONCLUSIONS

Britain's ideological symbiosis has been weakened by the Thatcher government's social and economic policies. The society's values have been channeled toward individualism, with reliance on market mechanisms reinforcing a view of the community as a set of self-interested competitive actors. The ideological direction of the 1980s has seen the rise of the "managerial right" with several "self-made men" entering the Cabinet. The demarcation between "Drys" and "Wets" in the Tory Party is a division between the newer bourgeois individualism of the Thatcherites and the older gentleman-squirearchy one-nation Toryism. Thatcher's ideological dominance represents the first time that the Conservatives have even purported to put business interests to the fore, rewarding competition and individualism even perhaps above national interest.

Communitarian norms are further weakened when industrial relations is based on the legalistic dissolution of unions as protected bodies and on strategic combat rather than on corporatist consensus. The labor contract, threats of dismissal, and suits for damages against trade unionists replace the earlier organic cohesion implied by the Social Contracts of the 1970s and cooperative planning. Limits placed on the rights of mainly black nationals to settle in the United Kingdom, reduction in selected welfare benefits, and expanded privatization campaigns diminish rights of membership in the British political community. The remaining rights are market based and individualist: the right to work (if there were sufficient jobs), the right to buy (whatever the quality of housing stock).

Although Thatcherism seems to have restored ideological individualism, the government's behavior does not permit a clear tracking of its ideological direction. Ordinarily, the legitimacy gap between ideological representations and institutional practices emerges when groups of persons pursuing their institutional interests make partly intentional and partly unreflective departures from traditional norms. In Britain, however, such a legitimacy gap seems to have occurred less innocently. A deliberate disjuncture between ideology and government practice has been a fundamental part of the Thatcher experiment.

One of the government's avowed central aims is to withdraw the state from economic management to unleash the salutary effects of free market forces. But the dagger of intervention is only partly hidden behind a laissez-faire cloak. As Peter Hall notes:
The object of the Thatcher government has been to reinforce the operation of market mechanisms in the hope that they will rejuvenate the economy with a minimum of state intervention. But this aspect of its program has foundered on a critical paradox: in order to restore the economy to a condition in which resources are allocated efficiently by self-regulating markets, the government found it necessary to alter many institutions in the British economy. That, in turn, has required a great deal of state interventions.

The Thatcher government's policies, therefore, not only rekindle an individualist ethos but also send mixed messages. While trumpeting the virtues of laissez-faire, the government intervenes decisively: by managing the nationalized industries from the Cabinet more than ever before; by introducing fundamental changes in the role of local authorities; by privatization. Thatcher's is, as Andrew Gamble put it, "the strong state in a weak economy, and that is not the same as laissez-faire withdrawal from economic management. How should one evaluate Thatcher's ideological message: restored individualism and an engineered legitimacy gap?

First, while a government "sponsored legitimacy gap may be destabilizing, neither the miners nor the Coal Board managers nor the general public seemed to doubt that the recent strike was prompted and conducted by an "interventionist state." Disclaimers only inflamed the situation. More generally, unemployment is viewed by 73 percent of respondents as Britain's most serious problem, and there is growing pessimism about the economy: only 18 percent in a May 1985 MORI poll thought that economic conditions were likely to improve. It may be time for the government to forsake the ideological stance of laissez-faire and accept direct responsibility for the conduct of the economy. It is not impossible to be both pro-capitalist and interventionist. Such a stance would reduce the legitimacy gap and might restore confidence in government.

Second, the evolutionary changes in British ideologies have proceeded from symbiosis during the period of England's industrial preeminence and Pax Britannica, to growing ambivalence and dissolution during the decline of the Keynesian welfare state during the economic crisis of the 1970s, to neo-individualism and legitimacy gap today. Ideological coherence and solid economic performance may well rise and fall together. The dysfunction of ideology in Britain today may be more intimately connected with Britain's falling from imperial power to the bottom of the second rank of nations than with the Thatcher government's manipulations. Nevertheless, efforts to reinvigorate an ideological symbiosis might prove valuable.

New policy directions might emerge from combining a Tory sponsored Donovan commission with more extensive use of the National Economic Development Council. More thoughtful and less confrontational treatment of the crucial problems of restrictive union practices and archaic and shallow business investment might thereby be encouraged. Easing the fiscal stance of the government (involving a modest expansion of the PSBR) might have positive consequences for unemployment. If presented well, it could reduce the prevailing sense that the government is shrugging its shoulders about the problem. Finally, public spending should be applied to unify the "two nations": the cash limits on local councils should be raised to permit better maintenance and provision of transport, public housing, and related matters; and privatizations should be applied on economic and organizational, not ideological, grounds.

These mild proposals are suggested as mainstream offerings in the context of a Conservative government in the 1980s. They are very limited, representing only a shallow agenda in pursuit of greater social stability. Britain has probably ceased to be a global or economic power, but it is unnecessary for the nation to remain beset by industrial and social divisions. As one British observer noted recently, "The rational task of modernization in Britain, then, is to make the U.K. a relatively thriving, but nonetheless second-rate, country."

This task would surely be advanced by efforts to foster cooperation within, and enhance commitment to, the national political community by reasserting Britain's traditional ideological balance.



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