The Battle of Ideas from Keynes to Thatcher

0:00Why compare Keynes and Thatcher? The so-called Keynesism and the so-called Thatcherism. There is a strong sentence against Thatcher by Rothbard, I don't remember exactly, but the idea was a strong rhetoric and very modest result. So the idea is that the government of Thatcher was a government from a libertarian point of view, full of limits. She was not able to achieve all the aim that she was trying to achieve, in terms of policy, in terms of outcomes. Anyway, in spite of these limits, my idea is that Tachirism was really a big cultural change, because she was able not only to change the party, the conservative party, or better both of the parties, the conservative and the Labor Party, was not able only to change partially the economy but was able to change the culture and the values.

1:01So the question of my paper is how is possible such a change in a democracy? It was made just by a person, just by a group of people, of politicians. Another way to see this question is Was Margaret Thatcher creator of the change or was created by the change? And so what is the role of ideas in the process of cultural change? And also, another question is, Margaret Thatcher is the only British politician who has an ism in her last name. We speak about Thatcherism, but we don't speak about Churchism or Blairism. Okay, Blairism, but less than Thatcherism.

1:48So, what's a kind of ideology, Tachirism? We can see Tachirism as an ideology. Okay, United Kingdom was the cradle of liberalism for several times. We know the Scottish philosophers, Smith, Ferguson, etc. were the ancestors of the Austrians. and was for a long time, especially compared with other countries of course, a country with a strong individual freedom. This process, philosophically but also practically in the normal life, started to change in the 19th century, especially with John Stuart Mill. The Austrian mill thought that it is possible to keep separate the production and the distribution of wealth and so it is possible to redistribute the wealth by politics following moral criteria.

2:45So the path of collectivism, we can call this the path of collectivism in the British history was studied by several people, Hayek was speaking about the false liberalism, unfortunately We don't have time to see the explanation of this path. But for example, Shirley Leighton was speaking about a religion of science, referring to John Stuart Mill and referring to Beatrice Webb, and especially, so referring also to Fabian Society, a Bloomsbury group, who were the kind of think tank, we can call them with and the contemporary world think tanks able to influence very strongly the Labour Party and so all the British politics.

3:32So the idea, the basic idea of the Fabian Society was that the science is the only source of knowledge and it's possible if you combine this view of the science with a naive belief and the efficacy of politics as problem solving. The result is the idea that you can manage better by politics the economy and the society as a whole. Why I'm speaking about Mill and Beatrice Wood, etc. Because my idea is that we have to see kinesism as an element of a bigger, of a longer process. And the process is the idea that the human mind can solve social and economic problems by rationality.

4:24Of course we have also historical elements in this process, in this path. The crisis of 29, the World War II, for example, was very important because for two reasons basically. People were waiting something from the state, were waiting for a welfare state, But also the experience of planning during the war bring a lot of people to think that now it's possible to combat against poverty and unemployment using the planning. And it was, for example, the idea of Lionel Robbins, who was a classical liberal, the guy who brought Hayek and London. He changed his mind after the experience of planning. So, for a long time after the war in England, there was a politician who were using the Keynesian equation.

5:13The Keynesian equation is simplifying, of course, supporting salary, increase the demand and so have less employment and develop the economy this way. What Keynes did basically was destroy the idea of balancing of budget, was a very rooted idea in the previous government, and replies by the idea that it is possible to spend more today, maybe in a moment of crisis, and so it is possible if you spend less tomorrow. But the point is that this is maybe possible for a person, it is maybe possible for a family or it is for sure possible for a person or family, but it is not possible in politics, because when a politician spends more today and so grows the role of a state, if we can A politician is never ready to turn back and use less power, and so spend less money.

6:17So the theory of canes was not taken care of human nature, and not taken care of the characteristics of politics and this law of politics. Ok, we don't have time to see what was going on in England in that time, but another interesting point is that Buchanan said that if we see the kinesism in this way, is it possible to say that kinesism is not compatible with democracy? But now the question is, today we can think a democracy without Keynesian politics, without deficit spending.

7:08Because if we can't think democratic policy without Keynesian economic recipe, the problem is if democratic institutions are compatible with individual freedom in the long term. What was called the welfare consensus basically fell down in the late 16th century and was surviving in the 70s with a lot of problems. Let's try to understand how the paradigm was changed in favor of the free market. The battle of ideas is the idea that during the sixties there was a rebirth of the classical liberal theory.

7:56So people like Friedman, Hayek, Buchanan wrote some of the main books during the sixties. Also the books of Mises were more important during the sixties. These ideas were brought in the United Kingdom by several columnists, by people who later became members of the Dutch government and also by several think tanks, for example the Institute for Economic Affairs was the more theoretical publishing books and organized Conference, Adam Smith Institute, is a more technical micropolitics, the ideas of how it's possible with a technical analysis to change the public sector, and there was also the Centre for Policy Studies, was founded by Margaret Thatcher, and the last one in particular was very important in founding a new strategy of communication.

9:01The communication strategy is really essential to understand Tachirism, because Tachir was able to individuate enemies, some people responsible for the British crisis. So she made a link between socialistic ideology, labour party and the leader of the trade unions. So this is a kind of first lesson, the lesson is that if you want to change a paradigm, If you want a revolution without a war, without a civil war, you need a negative myth. And a negative myth is important as well as a positive myth. So the rhetoric expedient was TINA. What is TINA? TINA is an acronym for there is no alternative.

9:47The rhetoric strategy is the idea, maybe the free market in this moment is hard, is difficult, people are going to lose their job, etc., etc., but there is no alternative, it's like Tacherism has an ideology. Why this question is interesting? Because Tacher had not only or not mainly economic purpose. You can see this sentence, economic economy had gone wrong because something had gone wrong, spiritually and philosophically in 1676 when she was leader of Opposition. So, Heredia was a reestablished moral values, what she was calling Victorian values and individual virtues, destroyed by the long period of kinesism and by the so-called non-state, so a state that doesn't see individuals in front of it, but people who need help.

10:48Of course, the question is, can the state reestablish values? The answer is not, but The State can remove the socialistic mentality, and for Thatcher, the State can remove the socialistic mentality with the idea of popular capitalism. So there was a moral argument for the popular capitalism. The idea of the popular capitalism was the economic renaissance was a way, an instrument to make responsible the individuals and so to re-establish the old virtues. So there was a kind of equation in touch-reason between freedom, property and responsibility. Responsibility means values, Victorian values for us.

11:36So we can see basically under the light of moral aim the economic reform and in particular the privatization. Driftatization, for example, when she was privatizing the firms that the state was the owner of these firms, she was trying to sell these firms to many shareholders. Shareholders before that were 3 million and with that became 11 million, it's a lot. And she was tracing the moral dimension of this element, because her idea is that if a people became an owner of a part of a firm, is going to change his mind, is going to see the free market work, and so is going to change his values and his attitude, and it's the same for the policy housing.

12:27The British state was the owner of a lot of houses and she was selling all the houses to the family. It was not very convenient because the price was low, but the idea is that if you have When you have a family, you become more responsible in front of your family, so you change your values. Anyway, we have some paradoxes when we see Tachirism. It is the paradoxes of a charismatic leadership. The problem is, Tachir, the role of the government is not find an agreement between lobbies, but is realize the common good. So, she was working for a nation as a whole. She was trying to reduce the task of the state and so improve the economy. But if we take a look at the style of the government, we can see that the government was her personal government.

13:17So she didn't trust also the closer member of the cabinet of her team. And she thought that she knows what the people want or what the people need. And she was returning the power to the people. The way was the privatization and fighting against Lopez. So she was designing a kind of special relation between the leader and the people without mediators, without intermediatory. Maybe it's interesting because the leader became the only interpreter of the will of the people and it's a kind of Jacobinism if you think what she was doing. But maybe it's the only way by politics to bypass the lobbies and so to bypass the problem of traditional politics and of public spending.

14:12So another point, our government was extremely active, it was near intrusive, it was doing a kind of inverse planning for the free market. So the idea to force the market to work and she was doing it by the state. So, of course, this activism of the state doesn't fit well with the liberalism. For liberalism, the less the state does, the better it is. But for her, as a politician, it was not a contradiction, because the point is not important how much the government does, but how it works. And when we have a situation that is the result of historical problems, So a big welfare state, we must ask if maybe this idea is true also in theory, if we can use this idea.

15:04So the problem in any way still remains, because it is possible to achieve liberalism using tools which are not liberal, which are not classical liberal. So it is possible to achieve a free society using the state, is the big question. To conclude, what can be the lesson of toucherism? First of all, we can't explain toucherism only with the figure of Margaret Thatcher. She was an essential ingredient, essential but not sufficient. It's not enough, Thatcher and her personality, to explain the change. She was for many aspects the matter fruit of her time, so the consequence of the battle of ideas.

15:56And you have to remember Fink Tank who gave her the tools also to realize this program. So what is the lesson of Tacherism in order to explain how change the culture? I think the first point is the idea counts in the historical process but interests count as well. The idea of popular capitalism, when the people have a property they change the values and the mind and in this way you can change the value and the culture of a country. So you need the experience of private property. And also that we need cultural and political strategy in order to combine ideas with interests. There is a sentence in the Rothbard Strategy for Liberty, the Appendix of Ethics of Liberty.

16:49The sentence is, libertarianism is a philosophy seeking for a policy. It's a kind of, let me say, a Leninistic theory, Rothbard theory. Just a group of people can change the system, can change the world basically. I think the experience of Thatcher is different because he was a politician, but in a sense it confirms the theory of Rothbard, because the idea of Jacobinism, the only way to bypass the lobbies, is a kind of confirmation of the theory of Rothbard. And of course, Tachirism is not the policy for libertarianism, that's for sure, and of course Tachirism is probably not enough.

17:36But anyway, I think we can have a good lesson from Tachirism to understand what can be the way to change the situation and to have more freedom in this society. Thank you and sorry for my English.

17:55Thank you very much.