Margaret Thatcher taught the next generation to set the agenda

Published in The Guardian (April 10th, 2013)

The US academic Cass Sunstein was in Britain at the end of last month. In his usual slightly dishevelled style, he went to Downing Street to discuss his pioneering concepts of behavioural economics and attempts to implement them under Barack Obama. He was listened to with rapt attention, unsurprisingly, since in both Washington and Westminster his “nudge” theories are saving significant sums of taxpayers’ money.

Such seminars are regular events in Downing Street under the coalition. The speakers form a rollcall of the globe’s most interesting thinkers: Amartya Sen, the Nobel-winning Indian economist; Daniel Kahneman, the Israeli psychologist and another Nobel winner; and Hernando de Soto, the Peruvian economist, who focused on land rights for the poor. The author Nassim Taleb traded equations on a whiteboard with Gus O’Donnell, then head of the civil service, as they debated econometrics; at another, I watched entranced as Lord Heseltine argued urban policies with Harvard’s Ed Glaeser.

These talks, sometimes joined by the prime minister and run by his aide Rohan Silva, show the restless search for new ideas that still grips the right, one of the least recognised legacies of Margaret Thatcher. She was catapulted into the Conservative leadership by a small group of ideologues centred around a thinktank, determined to roll back the statist ideas that dominated Britain after the postwar Attlee government. This legacy remains intact with a party that places a premium on radical thinking and, for all its flaws, sets the political agenda.

Sunstein worked for a Democratic president, but did not meet the Labour leader or key advisers. Perhaps this is unsurprising: four years ago Ed Miliband sneered at “nudge” economics as something “very fashionable in the Guardian for a few months before the financial crisis.” In fact, several countries have adopted these ideas with startlingly successful results; just changing the wording on some forms raised an extra £200m income tax in Britain, while personalised text messages drastically reduced the use of bailiffs to recover court fines.

This is one small sign of how the left seems paralysed by a lack of intellectual curiosity and confidence. Given the global economic crisis, rampant corporate greed and growing inequality, this should be a time of great ferment, with endless policy proposals bubbling up to challenge the post-Thatcher consensus at a time of immense and unsettling change. The core ideas that underpinned her government endured through 13 years of Labour and are being extended by the coalition. Behind “omnishambles” headlines, her revolution is being pushed forward on new fronts in schools, health, planning, policing, probation and welfare.

Yet, as the heated benefits debate showed last week, Labour is trapped by history – bereft of fresh ideas and, when tentatively offering proposals, strangled by the most stifling conservatism. So it suggests the anachronistic and unaffordable return to a contributory welfare system, while opposing the further opening up of education and health provision; some even float the renationalisation of railways. Meanwhile, you struggle to identify deep thinkers in party ranks beyond a couple of veteran stalwarts; even the left’s thinktanks appear moribund or merely harking back to an idealised past.

Talk to a Labour MP and you end up discussing politics and positioning; talk to a Tory, and it tends to be about policy. Even some leading figures on the left have jealously praised the right’s creativity and ideological crusaders. This zest for ideas was boosted by the 2010 intake, which comprises just under half the parliamentary party. They are a more energetic and impressive group than their predecessors, often with experience outside politics that makes them impatient and independent-minded. Many are children of the Thatcher age.

This does lead to divisions. At times the Conservative party is so anarchic as to appear almost ungovernable, like a plethora of pressure groups pushing pet causes rather than a united group ruthlessly focusing on political success. Throw the Lib Dems into the mix and it becomes highly combustible. Yet for all these fissures, even Maoist modernisers and the most reactionary social conservatives share a similar stance over the role of the state. The problem for Labour is that this issue – so fundamental, since it underscores so much policy – is unresolved in their ranks.

So what caused this great divide, with one side a fountain of fresh ideas and the other struggling for new inspiration? A Labour veteran blamed another legacy of Thatcher: the need for iron discipline after the media onslaught that engulfed her opponents. One leading Tory thinker said current academic concepts such as evolutionary psychology and behavioural economics were fundamentally rightwing; another said disruptive digital technology liberated individuals against powerful behemoths – which may be true, but some of the most striking online advances harness the collective spirit.

Perhaps it is more simple – for all the iniquities of capitalism, the tide of history favours the right. The centralised statism that dominated politics for much of the 20th century, given its last pathetic gasp under the profligate government of Gordon Brown, ultimately failed the poor while proving financially unsustainable and unsuited to modern times. “Labour is stuck because they do not want to carry on the slimming down of the state and devolution of power but nor do they really want to reverse it,” said one central Tory figure.

The challenge for the left is to fashion new and genuinely progressive policies in an age of austerity, when more money is not the answer to any question. This is an especially pertinent problem given its heartfelt desire for redistribution of wealth. But the left also needs to look beyond the turbulent events in Europe to appreciate the speed of global change and the complications this creates for welfare-laden economies: the dynamos and innovators are increasingly found in Africa, Asia and Latin America rather than France, Germany and Spain.

Perhaps Labour would benefit from another defeat, given the danger of taking power unprepared and turning into a zombie government, like the tragedy unfurling in France. After all, the right began to refocus only after Tony Blair’s second landslide, when people began to recognise they would not drift back into power. It is no coincidence the three most influential centre-right thinktanks were all conceived over the following months. Ed Miliband, a policy wonk himself, claims to be a conviction politician like Thatcher. But can he shake off the shackles of the past and prove there is an alternative?

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