People are losing faith in capitalism. Ten years on from the financial crisis, there is a continuing backlash which fuelled Jeremy Corbyn’s surprising electoral performance. In their anger and frustration with capitalism, ordinary people, especially the young, are starting to be attracted to socialism once again.
Many of the people who voted a few weeks ago weren’t even born when socialism drove Britain to the brink with financial bankruptcy, rampant inflation, and paralysing strikes. It is no longer good enough for Conservatives to point to a largely forgotten past to prove their point. They need to make the case for capitalism from first principles. This requires teacher-politicians who can say why capitalism is worth conserving. It just so happens that one of the party’s greatest teacher-politicians was also a populist who turned back the tide of socialism, namely Margaret Thatcher.
Much like Corbyn's candidacy in the Labour leadership election, Thatcher was not supposed to win the contest to succeed Ted Heath. As the middle-class daughter of a grocer, Thatcher was an outsider, excluded by the upper echelons of her party because of her gender. Thatcher’s victory has gone down in history as a “peasants revolt” due to her support from backbench MPs who defied the patrician elite which had traditionally run the party.
The economic philosophy Thatcher championed was also a rebellion against an establishment which insisted on clinging onto the failed policies of the post-war consensus. When she made the case for capitalism, Thatcher wasn’t speaking for the corporate interests. She was speaking for a free market populism, of how capitalism can empower the people as wealth creators and property owners. The genius of Thatcher was her ability to translate this capitalist message into the language of everyday struggles experienced by ordinary people.
For Thatcher, fiscal responsibility was a statement of how taxpayers should be trusted to run their own lives, and spend their own hard-earned money, free from interfering elites in Westminster. Cutting taxes and spending did not just boost economic growth and revenue, it was also moral. This argument was put in simple and effective terms which ordinary people across the country could understand. Thatcher believed “Everyone has to live on a budget, the government has to live within a budget, and our good housekeeping has made our economy sound and strong”.
Another enduring legacy of Thatcher’s free market populism was the “property-owning democracy”. Thatcher introduced the Right to Buy scheme and advert campaigns, such as “Tell Sid”, to promote the privatisation of utilities and industries. The result was a substantial increase in the number of homeowners and shareholders in Britain. Economic power would be transferred from the state to ordinary people. It was a seismic shift in the British economy which rewarded aspiration and provided opportunities in a way which socialism can never match.
The free-market revolution of the 1980s restored economic prosperity to the country after the decline and decay of the 1970s. But the fall of the Berlin Wall has ushered in an economy with fewer opportunities, and more problems for ordinary people. Multinational corporations easily avoid paying taxes and “too big to fail” banks are bailed out for crashing the economy. People are working longer hours for less money, less likely to own a home, and face a rising cost of living. The problem is cronyism, a capitalism which is undermined by the relationship between big business and big government.
Theresa May has acknowledged these problems during her tenure as Prime Minister, and attempted to use state interventionism to build her own brand of populism. But it failed to win a convincing victory against Corbyn’s socialism at the ballot box. As Conservatives reconsider their mission and their policies, it would be worthwhile to examine how Thatcher’s free market populism succeeded in restoring Britain’s prosperity and pride. It is the Conservative party's best chance of creating the next generation of capitalists.