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The rise of Thatcherism in Britain can be attributed in large part to the endeavours of two think tanks: the Institute of Economic Affairs (IEA) and the Centre for Policy Studies (CPS).
The IEA and the CPS were small compared to the average US think tank but effective in the British environment because of the ‘extreme centralisation of British political and public life.’ This gave easy access to key people within government, the media and the financial sphere. They needed only to concentrate their persuasion on ‘a strategic policy-making elite’ to be effective.
These ‘second-hand dealers in ideas’—to use the IEA’s own description of its role—were typically not intellectual originators but served to collect, distil and preserve certain strands of ideas and to diffuse them more widely, not least as detailed interventions in current policy debates.
According to The Economist, ‘Politicians looked to the think tanks for instant policies, journalists for instant opinions, and people on the make used them for instant connections.’ Academic Simon James says:
The tiny handful of think tanks operating in Britain have a very mixed track record. The larger and less ideological amongst them have exercised a moderate influence on certain specific public policy issues. As to the smaller and more ideologically zealous think tanks, most have made no impression worth writing about. But one or two have exercised an influence greatly disproportionate to their size, and played a key role in making Britain in the 1980’s to a surprising extent a testing ground for the ideas of the radical right.
These think tanks, particularly the CPS, played a major role in setting the policy agenda of the Thatcher government, providing it with most of its policy initiatives, including trade union ‘reforms,’ privatization of public authorities such as water and electricity, and welfare cuts. Thatcher’s chief of staff, economic adviser and all four heads of the No 10 Policy Unit were former contributors to the CPS. The Policy Unit served as a conduit for ideas from CPS and other conservative think tanks.
As a result of Thatcher’s free market policies, inequality increased in Britain and increased faster than any other industrialized country apart from New Zealand where the free market formula was being applied even more zealously. The tax burden for the majority of households was increased and the poorest no longer benefited from the nation’s economic growth. Between 1977 and 1990 the percentage of the population earning less than average income in Britain trebled.
Union power was reduced. The combination of weakened union powers, deregulation of labour laws and the downsizing of the workforces of private and public organizations ensured that many full-time, permanent jobs disappeared for good or were replaced by part-time and/or contract positions. Even those in full-time jobs were often paid less than was needed to support a family. ‘The diseases of poverty – TB, rickets, and others – returned.’
Even after Margaret Thatcher’s departure, the ideas of the conservative think tanks continued to influence Prime Minister John Major and he continued to apply Thatcher’s policies. The Tories had managed to blame the poor performance of the British economy on the global economy rather than government incompetence. Richard Cockett, who has charted the rise of conservative think tanks in Britain in his book Thinking the Unthinkable, notes that a new consensus, which included keeping government control of industry to a minimum, has been achieved by those think tanks. The free market ideas of think tanks such as the IEA have become the new conventional wisdom so that even the Labour Party in Britain ‘employs the language of economic efficiency and choice, albeit reluctantly.’
Furthermore, most of the economic liberal agenda that the Conservative Party espoused during the 1980s was duly adopted by the Labour party in the wake of their 1987 election defeat...Indeed, by the 1992 election it became very hard to tell the two main political parties apart on economic policy.
R. Desai, writing in New Left Review agrees: ‘The Labour Party, by the late 1980s, resigned itself to operating within the political parameters laid down by Thatcherism.’ However he adds that the think tanks were disappointed that more of their agenda was not taken up and that ‘political and electoral convenience’ had continued to remain the overriding consideration of the Thatcher government. He also notes that the wider public was never really converted to economic fundamentalism.
The UK think tanks were emulated in many other parts of the world.
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