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Bill Schwarz

In the course of her closing speech at the Conservative Party Conference in

1984 Mrs Thatcher held high a copy of the 1944 White Paper on employmentpolicy and triumphantly revealed that it carried on its cover the name of

Margaret H. Roberts.1 While it may be intriguing to speculate if the eighteen-

year-old future Prime Minister was indeed one of the few who had purchased

a copy or whether the entire episode was fabricated by an inventive, bright-

eyed party underling, there was a supposedly philosophic purpose to this

exercise. Her argument, based on the unlikely premise Of course we care,

was that the counter-inflationary priority of her government established her

as the true inheritor of Keynesianism and the principles of the White Paper.This tawdry theatrical deception did little to impress, though at the time

commentators failed to see the significance of this new extension of Thatcher-

speak punctually making its appearance in 1984. Yet the argument itself was

not new. It had first been aired some ten years earlier by Sir Keith Joseph

in a highly dramatic speech entitled Inflation Is Caused by Governments.2

Conservatives and Corporatism

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It was the waywardness of this intervention that first prompted col-leagues to question Sir Keiths judgement and the stability of hischaracter; the second instalment delivered the following month atEdgbaston speedily eliminated him from the leadership struggle. Thusit is ironic that the views which robbed Joseph of command of theConservative Party should have become so forcefully espoused by thecontender who was to take his place, Mrs Thatcher, and when repro-

duced a decade later with her full authority as party leader were barelynoticed, causing no more than a resigned ennui from those long inuredto such banal mendacity.

If little else this episode reveals the potential in contemporary times forreinventing the White Paper, however specious the grounds, and forhawking whatever may emerge in the political market. As the firstpublic, state document to give expression to the objective of fullemployment, and to outline the associated techniques for economic

management, it became a central symbol within political discourse forwhat has retrospectively been termed the postwar settlement, represent-ing the expanded range of social rights institutionalized in British societyin the 1940s. Like many such publicly acclaimed, forward-lookingdocuments it is in fact a timid, conservative affair. Few on the Left atthe time could have imagined that more than forty years later it wouldstill be an object of political dispute, as the response of Nye Bevan, forone, made clear. The reason is simply that in their determination toforce back the ratchet of socialism the Thatcherites have projected agolden age which predates even 1914 and writes out the 1940s as a

catastrophic deviation, the ultimate cause of the present crisis.

These explicitly strategic readings of the 1940s with which we havebeen long familiar have now begun to register in the historiography, acontinuation by other means of the endeavour by the Right to establishintellectual legitimation for current strategies. The most notable exampleto date has been Correlli Barnetts The Audit of War, a spirited denunci-ation of British economic policy during the Second World War.3 Thisis a book which has been paraded through the pages of the literary

reviews to great acclaim (inciting just the right degree of controversyto make it a touch risqu) and little wonder, for it argues with a wealthof empirical backing the fashionable thesis that the entire programmeof forties social reformism was a catastrophic, gross error whichterminated for at least a generation any possibility of reversing thedecline in Britains economic fortunes. Barnett elaborates the orthodoxRight view that the whole postwar welfare system was constructed ontoo weak an economic basis, resulting in a welfare state which (as wenow hear incessantly) the nation could not afford, and chides theintellectual compromises made by those who claim that the critical

effects of this arose only in the late 1960s or 1970sciting in thisinstance Bacon and Eltis, polemicists who hitherto had appeared far from

1 Employment Policy, Cmd 6527, 1944.2 Delivered at Preston, 5 September 1974, and published in Sir Keith Joseph, Reversing the Trend,

London 1975.3 Correlli Barnett, The Audit of War. The Illusion and Reality of Britain as a Great Nation, London 1986.

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timid.4 His thesis is not new, for it merely rewrites more trenchantly andwith greater clarity of focus the arguments of his much earlier work,The Collapse of British Power, which concluded that in the Second WorldWar Britain was transformed into an American satellite warrior-statedependent for its existence on the flow of supplies across the Atlantic.5

However, the interest of this argument is that it establishes the causesof the nations current economic crises less in the adoption of collectiv-

ism and heightened state intervention (as the down-the-line Thatcheriteslike to think) than in the almost complete absence of a coherent, macro-industrial strategy of any sort at all.6 As Colin Leys indicated in hisdiscussion ofThe Audit of War in NLR 160, the politics which derivefrom this analysis oscillate between admiration for the shock tactics ofinstant decontrols, on the Erhard model, and a centralized commandstrategy which would enforce modernization of the industrial base. (Asa historian trained in military affairs, Barnett is particularly fond ofmilitary metaphors: doubtless, too, he would find attractive the idea

which once occurred to Gaitskell that Mountbatten or Montgomerycould take control of the National Coal Board.) But analytically theemphasis he gives to the historic weakness of the industrial bourgeoisiein the nations representative political institutions, the dominance ofthe stateCity matrices and Britains long experience in the nineteenthand early twentieth centuries as a maritime colonial power excessivelydependent on the world economy are all themes which, over a numberof years, have received forceful expression in these pages.7

Correlli Barnett is currently riding high in the limelight. Despite the

rather calculated irreverence of the book, however, it is a seriousintervention in the historiography of contemporary politics and is nomere modish contrivance got up by the literary editors of the weeklies.It will be necessary to return to his arguments in a moment. But mycentral concern here is with the work of another conservative historianof the contemporary period, Keith Middlemas, whose current projectinvolves a full-scale inquiry into the forms of economic managementdominant in Britain since 1940.

Keith Middlemas

Middlemas is a Conservative in the way that leading Italian film directorsof the late sixties and early seventies were Communists, imbibing anational political philosophy within an impeccably conventional intellec-tual tradition, gaining in the process a party card which somehow getslost in the jumble of daily lifethus preventing affiliation at any momentfrom being fixed with certaintyand then at a later date acquiring adazzling, eclectic range of competing philosophies which all but concealthe initial stance.

4 Ibid., p. 8; R. Bacon and W. Eltis, Britains Economic Problems: Too Few Producers, London 1976.5 Correlli Barnett, The Collapse of British Power, London 1972, p. 592.6 Nonetheless Sir Keith Joseph described Barnetts thesis as horrendously justified. Interview with

the author, 4 March 1987. In actual fact it would appear that the closest political expression is to be

found in Michael Heseltines Where Theres A Will, London 1987.7 See also Kees van der Pijl, The Making of an Atlantic Ruling Class, Verso, London 1984, p. 36.

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In early adult life he worked as a functionary in the House of Commons(his years coinciding with Robert Rhodes James, currently ConservativeMP, historian and foremost apologist for Eden), but he has little timefor the mindless constitutionalist ideologies of parliamentary sovereigntywhich beguile those both in his profession and in political life. As ahistorian of the Right, he shares with Correlli Barnett the capacity toremain rational in his assessment of the limits of British power and has

written incisively of the inhibitions encountered by the English domin-ant classes in their imperial and post-imperial quest for cultural renewal.He has authored books on an astonishingly wide range of subjects,refusing the petty provincialism of his peers and on occasion elicitingin response a measure of prickly distrust from a profession eager totake issue with matters of detail in blithe disregard of any morechallenging thesis. But most of all, without adapting historical schol-arship to the contingent fluctuations of strategic requirement, Mid-dlemas is an unusually serious-minded political historian. His practiceis distinct from that impelled by the ethos of the Senior Common Room(or its correlate, the clubland culture of the Palace of Westminster)which organizes the prevailing conceptual world of the Conservativehistorian, yet none the less the content of his historiography claims anundeniable, if particular, conservative provenance.

For a brief period he took up work as an unofficial adviser to JamesPrior when the latter was Secretary of State for Employment.8 Onoccasion his denunciations of Thatcher were fierce.9 Throughout theearly years of the first Thatcher government Middlemas was urging

Conservatives to adopt a line of unqualified class compromise, at thesame moment when Thatcher herself was embarking upon the struggleto vanquish her enemies in the Cabinet which, in September 1981,culminated in the purge of the Wets and Priors removal to theNorthern Ireland Office. Any hopes which Middlemas might possiblyhave entertained for political influence were cut short. He was deeplyfearful of the political and social consequences of a Thatcherite war ofmanoeuvre conducted against the labour movement and this becamethe defining element in his politics, although similar sentiments hadearlier appeared in the historiography.10 The most forceful expression

of this desire for political accommodation occurred in his study ofEurocommunism, a weighty book published in 1980 based on scoresof interviews with representatives of the European Communist Partiesand of the far left groups (including in Portugal the clandestine PRPBrigadas Revolucionarias). His conclusion was in character and, althoughin no way odd in a continental context, it did look eccentric comingfrom a member of the Conservative and Unionist Party: To suggestthat changes in the Communist Parties over the last ten years maystimulate both social democrats and conservatives to put their own

8 Keith Middlemas, What Tebbit Should Tell the Tories Today, The Times, 15 October 1981, andThe Strong Case for Bringing the Tories and the TUC Closer Together, The Times, 15 February 1980.9 Keith Middlemas, Unemployment: the Past and Future of a Political Problem, The Political Quarterly,

vol. 51 no. 4, 1980.10 Keith Middlemas, The Clydesiders, London 1965. This was unsparingly attacked in NLR 37 by James

Hinton (then in the early stages of constructing his own powerful interpretation of the transformation

of proletarian socialism in Britain during the First World War), whose insistence on the significance

of factory politics was at odds with Middlemass more conventional labour-history approach.

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houses in order is not a recipe for renewing the political civil war ofthe 1900s. With the working class long enfranchised, democracyscontradictions occur on more complex lines like the conflict betweenparties and institutions. Commanding as they do the allegiance of someof the most powerful trade union confederations, appealing still, albeitin competition with the far left, to the marginal people in society,Communist Parties in Western Europe offer possibilities of choice which

democratic states might welcome, in their own interest, as an antidoteto the bland centre and the fanatic fringe.11 The familiar articulatingprinciple which establishes the divide between constitutional and non-constitutional, favoured in a genre of Conservative historiographywhose roots lie deep in the reaction to Jacobinism and which carries,too, powerful political effects in current times, is reconstructed here ona more orthodox social-democratic axis, centrist and pluralist, but withthe promise that the political centre will be able to break inheritedpractices and constitute itself as an active force, sufficiently coherentboth in composition and objective to engineer a new era of economicmanagement.

Until the mid-seventies Middlemass historiographical work, althoughwide-ranging and alert, displayed no great internal coherence. Up tothis point his most substantial work had been a mighty biography ofBaldwin, co-authored with John Barnes. The purpose of the book wasto rescue Baldwin from the calumnies and injustices inflicted upon himby an unwilling, unsympathetic official biographer, and although attimes it tips into unwarranted acclaim it is no hagiography, in thetradition of many such biographical excursions, but rightfully establishesBaldwin as one of the central, pivotal figures in the development of therestructured constitutionalism which emerged in the period of universalsuffrage.12 So far as it is possible to ascertain, the decline of theinstitutions of social democracy in the seventies and the attendantpolitical crises radically transformed the direction of his research. Thefirst indication of this shift was the publication in 1979 ofPolitics inIndustrial Society which coincided with Thatchers first electoral victory.This conjunction of events must partly explain its enthusiastic receptionamongst a disheartened progressive intelligentsiaThe New Statesman,

in its Bruce Page incarnation, virtually adopting the book as editorialpolicy. There was much about Politics in Industrial Society which wasattractive and it is understandable why it caused such a stir. It wasinnovative and obviously the product of a historian possessing bothintelligence and political passion. It was formidably well researched.But most challenging of all it took the state as its explicit objectof study, not only repudiating the quaint swingometer episteme ofmainstream political studies (and thus converging with the proliferationof Marxist theories of the state which appeared at this moment) butalso bringing to this analysis a welcome commitment to historical and

11 Keith Middlemas,Power and the Party . Changing Faces of Communism in Western Europe, London 1980,

p. 337. In a discussion with Middlemas in November 1984 I asked him about this passage and his

views more generally on Marxism; he replied that he held in high regard a living Marxism and cited

Frelimo as an exemplar.12 Keith Middlemas and John Barnes, Baldwin.A Biography, London 1969. At the same time he edited

the diaries of Thomas Jones, assistant-secretary to the Cabinet in the 1920s and a man of supreme

influence in the political life of the period: Thomas Jones. Whitehall Diary, 3 vols., London 196971.

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concrete explanation (and in this respect diverging from the unmediatedabstraction which characterized the greater proportion of this oeuvre).A respected British historian intent on theorizing the state in order toclarify strategic possibilities for the present is not what one can usuallyexpect from the native historical profession, still less when this carriesa commitment to the Conservative Party: any such endeavour as thisdeserves to be observed closely evenor especiallyby those to whom

the resultant political conclusions are far distant from their own.

Since 1979 Middlemas has written a history of the National EconomicDevelopment Council, a dutiful official history, useful, but neitherconceptually nor politically of the first significance.13 He founded andedited Catalyst. A Journal of Policy Debate (boasting the most distingu-ished editorial board) whose objective was one of permeation, on theold Fabian model, amongst the current practitioners and advocates ofcorporatism, drawing on an authorship ranging from James Prior (now

Chairman of GEC) to David Blunkett (a foremost exponent of currentexperiments in municipal socialism). And he has commenced a three-volume sequel toPolitics in Industrial Societythe latter as it now turnsout appearing only to have been a preliminary essay for the work inhand. The trilogy carries the title Power, Competition and the State, thefirst volume of which, Britain in Search of Balance, 194061, has recentlyappeared.

Economic Management

The core of this first volume is an examination of the ideas and policiesof 1944, their development in the institutions of the state in the late1940s and 1950s, and the culminating impasse in the politics of economicmanagement at the end of this periodwhich in turn was to give riseto the reconstruction of the old practices on the model of 1964.The organization of this account is predominantly narrational andchronological, and Middlemas issues a warning at the beginning againstplundering the past for ahistorical ends. Serious though this injunctionis, he appreciates too how past historical timesthe idyll of a free-trade

economy which is projected back to 1914, the caesura marked by theWhite Paper of1944, the nascent corporatism of1964combine in thepresent and thus the political import of the chronological reconstructionis never far distant.14 The book is densely empirical and the prosesparse, reminiscent of the later historical writings of E. H. Carr.Evidence for this volume and its sequels has been drawn from thearchives, where this has been possible, and once again from a hugequantity of interviews. Volume Two promises to extend the historicalstudy to the present while the closing volume will offer a conceptualanalysis of the state in Britain. The absence of these two later volumes,especially the final one, compels a commentator to be tentative, forwhat is alluded to in passing in the opening volume may be developedat length at the end.

13 Keith Middlemas, Industry, Unions and Government. Twenty-one Years ofNEDC, London 1983.14 For an analysis of the tendencies in current Conservatism which correspond to these particular

historical moments, see Middlemas, The Crisis of the Tory Party,New Society, 6 October 1983.

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Politics in Industrial Society introduced the concept of corporate biasto describe the evolving forms of representation in Britain betweenemployers organizations and trade unions, brokered by central govern-ment. The purpose of this approach was first to convey the conjuncturalforms of corporate representation, thus breaking with the predominantlysociological theories (or models) of corporatism then current, andsecond to demonstrate how corporate institutions themselves came to

be absorbed within the field of state power, assuming a new role asgoverning institutions. To put it simply, what had previously beenmerely interest groups crossed the political threshold and became partof the extended state.15 His thesis suggested that while government inthe narrow sense was weak, the extended state built on the dual basisof corporate and constitutional representation exhibited a particularlyflexibleif not always expansivesystem of political and ideologicalauthority. Although Middlemas was at pains to emphasize the inherentinstability of this arrangement, he argued that it first emerged in theearly 1920s, with Lloyd George as a central architect of the system, andcollapsed midway through the Wilson period at the end of the sixtiesa continuum almost without precedents in post-Reformation history.16

The emergence of this new state coincided with the rise and consequentdefeat of the early Communist movements in Western Europe in the191723 conjuncture: the pluralistic, compromise-seeking structure ofthe British political arrangement, drawing in the leading representativesof the fundamental classes, can be understood both in terms of therelative weakness of socialist organization in Britain and also, in itsdeveloped institutional form, as gone of the key and distinctive determi-

nants of the peculiarities of the state in the British social formation.

The most notable methodological revision of the new work is theintegration into the analysis of the complex of institutions and interestswhich constitute the financial sector and, secondly, of the main instru-ment for the management of governmental brokerage, the civil service.17

The significance of this modification is not articulated conceptually butis manifest in the detail of the empirical reconstruction. Indeed theweight of the empirical evidence makes a summary of even the majorthemes unusually difficult: in the rsumwhich follows for the sake of

clarity muchoften very revealingmaterial will have to be left aside.

The account of the wartime state is straightforward, its conclusionsdiffering little from the established historiography. The emphasis pro-vided by Middlemas is on the political contract struck between therepresentatives of capital and labour symbolized by Bevins appointmentto the Ministry of labour, the reversal of the economici.e. financialpriorities of the 1930s (hence too, as a rapid response to this newsituation, the emergence of the Sterling Area) and the steady marginaliz-

ation of those Conservatives fearful of organized labour. From thereconstruction of the state in 194041 there developed the commitment

15 Keith Middlemas,Politics in Industrial Society. The Experience of the British System since 1911, London

1979, p. 373.16 Ibid., p. 15.17 The absence from Middlemass investigations of financial and overseas institutions was noted by

Anthony Barnett in his magisterial polemic, Iron Britannia, NLR 134, 1982, p. 43.

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to a coherent, planned process of postwar reconstruction with fullemployment at its very core, a commitment which, Middlemas suggests,owed very little to political parties, and not much more to Keynes orBeveridge. He argues that the prime mover in the emergence of theblueprints for social reform were the various interestsbanking andmanufacturing capital, and labourrepresented through the committeestructure in the machinery of state, presided over by the civil servants.

He documents an intense, prolonged process of bargaining between theinterests, concluding that each strove hard to further its own particularobjectives, and that frequently the most crucial and contentious issueswere fudged, buried out of sight for the sake of a modicum of consensus.

The White Paper on employment policy exemplified this process, for itproposed the continuation of the wartime political contract into thepostwar period but nowhere did it indicate the political means by whichthis might be achieved. Its origins lay in a paper drafted for the WarCabinet Economic Section in early 1941 by James Meade, and in effect

it spent three years incubating in the various corporatist committeeswhich were staffed by the heterogeneous body of Whitehall mandarinsand recruits drawn from outside, mainly from the universities. Theseintellectuals and functionaries organic to the wartime state (Robbins,Franks, Crowther, Cairncross, Chester, to cite only the most renowned)assume great prominence in this account: formed as young men in theintellectual milieu of New Liberalism and Fabianism which bred devo-tion to a humanistic rational expertise, they filled the crucial intermediatelevels of the state bureaucracy translating the middle opinion of the1930s into one blueprint after another. By far the youngest of thisgeneration who fully shared this historical experience was HaroldWilson, recruited to the Central Economic Information Service in 1940.Middlemas himself is evidently enthusiastic about their role. It wasfrom these groups that there eventually emerged sufficient intellectualand bargaining power to overcome Treasury resistance to the objectivesof full employment in postwar planning: yet the outcome codified inthe White Paper was one of the greatest compromises of all, representingwhat Middlemas calls a masterly combination of orthodoxy and Keyne-sian technique which, he believes, in practice left it wide open as a

hostage to fortune in the future. The Treasury was working from adefinition of full employment comprising a figure of approximately8.5 per cent unemployed, the TUC and Beveridge contemplating nomore than 3 per cent.18 The white Paper made clear the fact that in theview of its authors high and stable employment depended upon anexport-led programme of economic recovery sufficient to keep controlof the balance of payments, and the longterm stability of prices andwages. For this first condition to be met, the strategic postwar positionof Sterling had to be decided andalthough challengedthe interestsof the traditional guardian of Sterling as an international medium of

18 Keith Middlemas,Power, Competition and the State. Volume I. Britain in Search of Balance, 194061,

London 1986, p. 91; cf. Correlli Barnett, It was also owing to Beveridge more than any other (including

J. M. Keynes) that the wartime coalition committed future governments to full employment as

the key factor in economic policy; a commitment which, by handing over power from the employer

to the workforce, led to Britains appalling postwar record on productivity and the adoption of new

technology. Decline and Fall of Beveridges New Jerusalem,Daily Telegraph, 1 December 1986; and

his correspondence to The Times, 27 August 1986.

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currency, the Treasury, still prevailed on this issue. This sharp re-emergence of overseas and financial interests, although widely acceptedby the full range of experts, occurred at a crucial moment in postwarplanning and indeed was constitutive of its central forms.

The conclusions which Middlemas draws from this analysis are noteasily excavated although it would seem that the stress falls on the

contradictory foundation of the plans for economic management, sug-gesting that almost from the outset the system was formed by a seriesof inter-related objectives which in their totality were impossible toachieve. It is the workings of this dynamic, at the core of the postwarsystem, that come to occupy the central narrative strand of the book.Middlemas demonstrates, as many others have done before him, howthe financial vicissitudes of the immediate postwar period overwhelmedthe economic objectives of the Attlee administrations. US hostility andthe drive to enforce on Britain early convertibility, combined with theUKs weak bargaining position inside the Sterling area (a weaknessproved in the negotiations in 1946 with Egypt and Argentinatwoformer subject nations which in the future were to suffer the murderousconsequences of post-imperial retribution) fast rendered subordinateBritains overseas power. Nor was there any attempt to reconstruct theadministration of the state with a view even to a minimal redistributionof authority. The Attlee government only partially fulfilled the 1944White Papers aims. The Sterling area as the 1944 authors conceived itand the pounds level of $4.03 could not have been held beyond 1949by a Britain which was a full member of GATT and NATO . . . it

attempted to maintain economic growth and living standards at homewhile governing a third of Germany, sharing with the US an interest inEurope, the Middle East and South-East Asia, and in the foundationofNATO, and in undertaking a level of rearmament in 1951 with whichneither the machine-tools industry nor the exporting industrys earningscould cope. As it had inherited them, so it left a legacy of worldwidecommitments which the nation, on any rational commercial calculation,could not afford and from which its immediate competitors did notsufferand which indeed its successors at once tried to shuffle off. Thelimits of the 1944 accord were, quite simply, that it was grounded in a

rationality whose landmarks had, by 1951, ceased to exist.19 In theseconditions Labour, attempting against the odds to continue wartimeexhortations for a high degree of civic obligation and sacrifice, heldback consumer demand beyond the limits of political expediency; theConservatives did not.

A Political Contract

The picture which emerges is one which depicts the postwar bargainnot only breaking with the past but becoming an organic part of the

state.20 Yet the upshot of Middlemass analysis would suggest that itwas a political contract (the White Paper, the welfare institutions, etc.)built on an unsustainable economic basis, requiring the pursuit ofimpossible economic objectives, an instability constitutive of the post-

19 Britain in Search of Balance, pp. 21011.20 Ibid., p. 342.

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war settlement itself. Given the initial agreement for reconstructing theeconomy with such a high degree of dependence on Sterling as a worldcurrency (and it is not entirely clear to what extent Middlemas eithershares or repudiates the judgements on which these decisions weremade), attention became focused on the domestic economy, the gravit-ational pull of inflation, the exploitation of the scarcity of labour bythe unions and thusby this stage of reasoning, inevitablyon the

very possibility of sustaining full employment at all. This was thedynamic on which the settlement was based, triggering time and againthat irregular but long reaction to the settlement itself which was toculminate in what we now call Thatcherism.21 As Middlemas sees it,the only realists who were prepared in the 1950s to acknowledge and faceup to this fundamental instability were the mandarins, the generation ofcivil servants formed by the wartime state (a clerisy as he actually putsit): after the Cripps/Attlee era the politicians succumbed to politicalexpediency. The unpleasant paradox that the longer the fat years lasted,the wider the gap grew between contemporary gratification and futurecompetitiveness, was one that only the officials fully appreciated.22

The strength of the volume consists in the documentation of theconflicts which broke out inside the higher institutions of the statewhen it came to be recognizedgiven once again the all-important,continuing commitment to Sterlingthat at least some of the featuresof the White Paper strategy would have to be jettisoned, and ofthe consequent attempts to square this with the political, contractualcommitment to full employment. Thus at the beginning of1951 Wilson

at the Board of Trade put forward a programme to galvanize industryand the export trade, while Gaitskellwhose transition to the point ofview later associated with Anthony Crosland and the social-democraticrevisionists took place at the Treasury in the short space before the1951 election23in his plan for a National Wages Board achieved afirst in the long search for a neutral arbiter with the charge of drivingwages down.24 However, the greater part of Middlemass analysis isdevoted to the recommendations emanating from the Treasury and theBank of England, in particular the memorandum entitled The SterlingArea which was drafted early in 1952 by Sir Leslie Rowan, Sir George

Bolton and Sir Otto Clarke (and known as Robot). This drew attentionto the threat of a serious crisis in the Sterling area and in the UKscapacity to compete with the USA; and to the fact that as the UK couldnot maintain responsibility as the centre of the Sterling area, nor optout, it could only continue to borrow short-term from balance holdersand remain perpetually vulnerable to devaluation any time there was adownturn in the world economy. This was put to Butler who consultedGaitskell (as an old friend: Gaitskell agreed with the diagnosis butrefused party support). Robot proposed floating the pound, making itconvertible to non-Sterling balance holders and renouncing commitmentto full employment as the cardinal principle of economic management.As Middlemas convincingly argues, it was a deliberate attempt to place

21 Ibid., p. 13.22 Ibid., p. 342.23 Ibid., p. 184.24 Ibid., p. 189.

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a permanent constraint on the politicians. R. A. Butler, delicately, inveiled form, put this in great secrecy to the Cabinet, he by this pointaccepting the Bank of Englands argument that the Sterling area nolonger served Britains interests and that tougher credit controls shouldbe imposed, hence accepting the effect of rising unemployment. TheCabinet split (MaxwellFyfe, who opposed Robots recommendations,predicting an unemployment figure of some ten million if the plan were

adopted) and on this basis, by default as it were, the Cabinet choseinstead to resort to cuts in public expenditure as an immediate way out.Although Robot failed in its immediate objectives it did, according toMiddlemas, inflict a lasting wound on the postwar settlement.25

There is plenty more in this vein, of great interest, but not necessary torecapitulate here. His account of the Thorneycroft resignation (formallydelivered in January 1958, although the critical lead-up took place inthe closing months of1957) is relevant, however, as it marks the first

moment when anxieties which were clearly prevalent in the top echelonsof the Treasury and the Bank of England were voiced in a mostuncompromising manner by a senior politician. Peter Thorneycroft, asChancellor, attempted to break through the stop-go impasse by restrain-ing wages and consumption until industrial efficiency would risesufficiently to compete in the international market. This turn to syste-matic deflation, in the Robot tradition, was beaten by force, not reasonby Macmillan and the Cabinet at the cost of losing the entire Treasuryteam: Thorneycroft, Powell and Nigel Birch.26 With Thorneycroftsresignation behind him Macmillan pursued a policy of expansion,

prepared to live with moderate inflation: each correction of stop-go policy exaggerated the swing of the pendulum, at length leadingMacmillan to the conclusion that a wages policy would prove hisonly way out. Macmillan . . . steered a divided party alternately byblandishments and force through four years of gradual relative economicdecline which it would have been hard, by any means then in favour,to reverse.27

Middlemas rejects the belief (the myth) that Thorneycroft was an early

25 Ibid., pp. 20014. On 8 February 1952 the Treasury tried to meet Cabinet anxiety about the Robot

proposals: The economy is not working in a manner which enables us to pay our way or to maintain

our external objectives. Without major change, these objectives, which are fundamental to our existence

as a great power, will be swept away in a major crisis. . . The size of the problem is so great, and the

consequences for the future so devastating to the national life, that the whole of national resources

must be thrown into it. Quoted in ibid., p. 201.26 Ibid., p. 294. Or as this becomes rearticulated by eighties tabloid journalism, the occasion the death

of Macmillan: Supermac . . . launched Britain on the slippery slope of spend today, pay tomorrow.

He sacked one Chancellor, Peter Thorneycroft, for presuming to suggest that the country should live

within its income. Later Britain paid a bitter price for the locust years. . . To the end of his life,

Supermac was still preaching that we could buy success and full employment with other peoples

money. The reality is that every 100 jobs created in the public sector involves the loss of140 freeenterprise jobs (sic). TheSun mourns Supermac the man. But we delight that his policies have been

totally rejected by the Tory Party of Margaret Thatcher. Sun, 31 December 1986. For the record

Macmillans speech of20July 1957, delivered at Bedford football ground, began Lets be frank about

it; most of our people have never had it so good, only to point out the dangers of accelerating

inflationThis is the problem of our time. Harold Macmillan, Riding the Storm, Memoirs, vol. 4,

195659, London 1971, pp. 3501.27 Britain in Search of Balance, p. 289.

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monetarist, although elsewhere he has been a touch less categorical.28

He prefers to view Thorneycroft as an exponent of that version of thenational interest envisaged by the Treasury and the Bank of England(and indeed by The Economist, scolding Mr Butskell for his flaccidity29):not as an advocate of the principles of1914, nor an antagonist to thoseof1944, but as a man of reason and realism who took it upon himselfto demonstrate to the country the true costs of the postwar settlement,

who thought it both expedient and just to modify the definition of fullemployment to allow a higher percentage of unemployed, and who wasdefeated by the inexorable exigencies of the historic contract which thendominated political life.

The great significance of the fact that it was Thorneycroft who led therevolt was due to his reputation as an indefatigable Tory reformer ofthe 1940s. He was, alongside Victor Gollancz and Kingsley Martin, amember of the 1941 Committee, a reforming pressure group composedof leading publicists and politicians; moreover he was, with LordHinchingbrooke, Quintin Hogg and Hugh Molson, co-founder of theTory Reform Committee, the key channel through which the impulse forsocial-democratic reconstruction reached mainstream Conservativism.30

Few Tories embodied the spirit of1944 more fully than Thorneycroft.31

It is worth noting that even much later in his career, in the purge ofSeptember 1981 in which Prior was demoted, he was sacked from theposition of Chairman of the Conservative Party by Mrs Thatcher, and re-placed by the more loyal figure of Cecil Parkinson.32 That dissatisfaction

28 He has referred to the remote antecedents of Thatcherism in the ThorneycroftPowell alternativeeconomic policy of195657. (Middlemas, The Supremacy of Party, The New Statesman, 10June

1983.) To the degree that Thorneycroft never espoused monetarism as a simple technical objective, it

would be wrong to class him with the Conservative monetarists of the late seventies. But undoubtedly

his criticisms of the monetary system were unambiguously recruited by the intellectual precursors of

Thatcherism: see Thorneycrofts opening chapter in the Institute of Economic Affairs volume edited

by Arthur Seldon,Not Unanimous.A Rival Verdict to Radcliffes on Money, London 1960.29 It should be noted that The Economist, initially displaying great enthusiasm for the White Paper,

was by the early fifties fearful that Labour extremism would destroy the basis on which the postwar

settlement was founded. Its famed invention of the term Butskellism was originally prescriptive and

not descriptive, urging the Labour leadership to defeat its hotheads so as not to throw the opportunity

for constructive Butskellism away. Mr Brutskells Dilemma, The Economist, 13 February 1954.30 Peter Thorneycroft and Hugh Molson, Bulletin Number2 of the Tory Reform Committee: Employment

Policy, London, 16 June 1944; and Peter Thorneycroft, Tory Reform: What We Are After, Picture

Post, 29 April 1944. The former publication describes the White Paper as a revolutionary departure

and the outstanding political document of the century.31 Britain in Search of Balance, p. 294. Thus in his 1957 budget speech Thorneycroft emphatically

distanced himself from the economic principles of 1914: There are some who say that the answer

lies in savage deflationary policies, resulting in high levels of unemployment. They say that we should

depress demand to a point at which employers cannot afford to pay and workers are in no position

to ask for higher wages. If this be the only way to contain the wage/price spiral, it is indeed a sorry

reflection upon our modern society. To slash production, to drive down investment, to push up

unemployment to a level at which, despite high world demand, we have manufactured our own

depression is, to say the least, a high price to pay for price stability. Hansard, House of Commons, 9

April 1957, cols., 96970. But six months later Thorneycroft had moved much closer to an ultra-

tough money approach: see his speech to the Annual IMF Meeting in Washington, 24 September 1957,

quoted in Samuel Brittan,Steering the Economy, New York 1971, pp. 20910. Brittan explains the shift

from Thorneycroft I to Thorneycroft II as being caused by the sudden traumatic run on the gold

reserves in the intervening months.32 For Thorneycrofts current distancing from the Thatcherites and his reflections on the destruction

of the old regime to which he is still committed (I lived in the days when it was smart to compromise

with socialism) see Hansard, House of Lords, 11 March 1987, cols. 106467.

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with the practical workings of the 1944 programme should accumulateto such a degree in the fifties to force Thorneycroft, of all Conservatives,to resign was clearly a fateful indictment.

Moving Right

Yet Middlemass account shows how it was possible for radical Tory

reformers of the 1940s, from the Macmillan era on, to slide to the Rightof the Partyin defence of the pound, desperate somehow to breakthrough the impasse imposed by the settlement, and to win back aninitiative which they perceived as having been lost to the unionsand in some cases (Hinchingbrooke, Rippon) to affiliate to that mostunderrated Conservative organization, the Monday Club. It is a processwhich inaugurated that common reflex in contemporary British politicsby which men and women in the name of reason and goodwill, savioursof all that was best about the 1940s, go about their task of provingtheir commitment by systematically circumscribing, paring down anddestroying those very social rights, including the right to a job, whichwere won in the 1940s. It is this capacity to play catch-as-catch-can withthe principle of universal provision which leads directly to the gruesomespectacle of Thatcher waving the White Paper for todays TV audiences.To be sure, Middlemas is careful to stress the pragmatism and lack ofcoherence of Thorneycrofts position at the time of his resignation, andthough he concedes that the working party Thorneycroft set up toprepare evidence for the Radcliffe Committee on the monetary systemwas more openly monetarist in its opinions than Thorneycroft himself

and that Thorneycroft at the time was under the considerable influenceof Powell (and Sir Leslie Rowan), this still does not establish a single,unilinear monetarist link between the Thorneycroft of the mid fiftiesand Thatcher in her high monetarist moment. But in a deeper sense itdoes register a critical moment in the decay of the postwar settlement, themoment when prominent Conservative politicians first began publicly todisengage from the existing terms of the contract and the beginningsof a new configuration on the Right of the party. This coincided withthe resignation of Lord Salisbury and the regrouping of the old Suezrebels. One Nation Conservativism at this point fragmented, with

Powell, in the future the most influential philosopher of the New Rightinside the party, one of the first to break loose, retrieving the doctrinesof economic liberalism and making his own a reconstructed Englishnationalismthe first steps in a long march which would eventuallytake him to the Midland Hotel, Birmingham on 20 April 1968.33

Middlemas offers a more hesitant version of the Thorneycroft affairthan this, keen not to short-circuit scholarly conclusion by retrospectivepolitical judgement; but he does at the same time imply that Thorney-

croft is rather more deserving of vindication by posterity than hithertoaccepted. One can disagree sharply with this assessment, but see at the

33 Middlemas quotes from a speech Powell delivered four months after Suez: The Tory Party must

be cured of the British Empire, of the pitiful yearning to cling to the relics of the bygone system. . .

The Tory Party has to find its patriotism again, and to find it, as of old, in this England. Ibid., p.

286. Powells odyssey in search of English nationalism has been recounted with great insight by Tom

Nairn, The Break-Up of Britain, Verso, London 1977.

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same time that Middlemass broad analysis confirms that the coalitionof Conservative forces painstakingly built up by Butler around theIndustrial Charter in 1947 first began to draw apart and disintegrate inthe 195758 period. This suggests that the initial phase of Conservativecommitment to the postwar settlement, so far as assent was securedfrom the vast majority of the parliamentary party, was relatively short-lived.

Nevertheless Macmillan determined to continue the stop-go cycle, withits tendency to inflation, as the price to be paid for staying within thepolitical structures imposed by the corporate contract of1944.34 At thesame time he was forced to search for new policies which would allowthe political contract to be continued by placing constraints on theeconomic interests involved, above all elseindeed almost to theexclusion of all elseon the unions. So began, as Macmillan forlornlyrelates in his memoirs, the experiments with incomes policies.35 Thisopened a new period in which the strategy of1944 was reconstitutedon the basis of a qualitatively higher degree of planning, the expectedintegration with the EEC and the extension of corporate representationthrough the institutions of the NEDC. The model to hand, occasioningan envious enthusiasm, was the French miracle. In the conclusion tothis first volume Middlemas only anticipates these later developments,noting that the shift which took place towards the end of Macmillansadministration differed from 1944 in that demands for reform came

from outside the government, that the reformers own degree of commit-ment was less strong and than the resultant package of economic policieswas weakened by the fact that it came at the end, not the start, of agovernment. The name which came to be associated with the Conserv-ative articulation of this programme was Heath. In the 1960s Heathwas able slowly to reconstruct the original Butler alliance on the basisof this new programme and thereby continue his partys commitmentmore or less intact to the fast-receding principles of the forties contract.But he was never able to create a broad alliance within the party which

could compare with Butlers of1947

: there now existed a significantminority on the Right of the partyPowell, the Monday Club, oldRightists suspicious of the new Heathite managerialismwho not onlyrefused to endorse Heaths version of the old contract but were also inthe process of developing their own distinctive and alternative Toryfuture.

34 Within the theoretical field Keynesian categories were at this time readjusted (the Phillips curve)

to take account of these shifts; see A. W. Phillips, The Relation between Unemployment and the

Rate of Change in Money Wage Rates in the UK, Economica vol. 25, 1958. This paper was read indraft by James Meade, one of the theoreticians of the White Paper whose work is currently being

rediscovered by the SDP. See too A. W. Phillips, Employment, Inflation and Growth, London 1961.35 I have been trying to work on Incomes Policy: a New Approach. There is a mass of paper and

a large number of suggestions (mostly self-contradictory). . . We have got through quite a lot of

preliminary work. But I am still at a loss. There doesnt seem to be a way through the tangle. Harold

Macmillan,At The End of the Day, Memoirs, vol. 6, 196163, London 1973, p. 85, quoting his diary

of11June 1962.

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The New Clerisy

As an empirical study of the core economic apparatuses of the Britishstate Middlemass analysis is quite breathtaking. His grasp of the internalworkings of the financial institutions, the corporate bodies and the civilservice is unrivalled. Nevertheless it is not immediately clear how thepower of the trilogys title is located in the social formation, nor how

it is manifest. Nor is it apparent what mechanisms allow the state thecapacity to harmonize antagonistic corporate interests. What is it aboutthe matrix of governmental and governing institutions which enablesequilibrium to be established? Middlemas, at this stage in his investig-ation, does not address these theoretical issues. But he does provide apractical resolution by introducing an ulterior collective agent which inpursuing its own interest also acts on behalf of the state as a whole: theexperts and officials. They were, he argues, not only guardians ofthe settlement but guardians of the states interest in its continuedexistence.36 The assumption which must lie behind this is that, as a

result of the protracted bargaining between the representatives of thefundamental classes during the war, the interests of the state were (moreor less) expressive of a general will.37 Thus for Middlemas not only inthis period did the civil servants interests coincide with the long-terminterests of the state; they also coincided with the generalized pluralityof class interests.

It is possible to trace the strongest philosophical provenance of thisgeneral theoretical approach to the New Liberalism of the first decadeof the century. The recognition of class and social conflict as pervasive,the idea of the state as the embodiment of reason and as the field inwhich collective interests compete, the emphasis on the ethical functionsof the state, and a belief tempered by realism in the possibility ofachieving an adequate degree of harmony between competing interestsin order to allow both a measure of democracy in political and civilsociety and the reproduction of a modified division of labourall thesenotions were cast in the transformation of liberalism in the openingyears of the imperialist epoch. The stress by Middlemas on the need toregulate the destructive capacities of specific interests for the greater

good, to curb the greed of both capital and labour through an orderedbut legitimate system of disinterested brokerage comes straight fromHobhouse or Hobson. And this makes sense, for so far as it is possibleto discern any positive force in Middlemass reconstruction it is preciselythe forties clerisy which had been reared in the traditions of anaspiringly democratic New Liberalism and an unashamedly undemo-cratic Fabianismthe particular mix depending in the case of anyone individual on quite contingent determinations.38 These were civilservants of a highly particular collective disposition, whose formationhad initially been in the universities and research groups rather than in

Whitehall. As described in this first volume it was they who firstappreciated the appalling consequences which were accumulating,

36 Britain in Search of Balance, p. 352.37 Ibid., p. 74.38 For a formidable historical assessment of the civil service clerisy, see Peter Gowan, The Origins

of the Administrative Elite, NLR 162, 1987.

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unseen to the public eye, as a result of the new forms of economicmanagement, but they were unable (in Middlemass view) either to alertthe public or to persuade the politicians to sacrifice short-term electoraladvantage for longer-term investment in the national interest. Theessential rationality of these bureaucrats composes a powerful under-current in Middlemass history of the postwar period. They were thebrain and the collective memory of the state. The esteem they acquire

in this study is reminiscent of the rational, reasonable and temperedworld of Whitehall in Conrads The Secret Agent, pitted against theforces of chaotic nihilism and destructive self-interest.

While the officials receive these plaudits the politicians are shown tohave been unimaginative, nerveless and cynical, sticking to an outmodedsystem which they hoped would see them through the next election. Itmight be expected that behind such an analysis lies a logic of coalitionismin which expertise and rational, centralized planning would be deemedof greater importance than the impoverished democratic potential of a

polity inexorably given to electoral opportunism and expediency. Thehistorical precedents are strong. Through most of this century coalitiongovernment has been the usual means by which the state has beenreconstructed; and for Middlemas coalition claims a particular signific-ance, giving rise during the Lloyd George administration to the corpora-tist arrangement and creating the conditions for the postwar settlementduring Churchills government. Commitment to the mixed economyand the middle way has often been accompanied by the belief that theappropriate political institution to secure these ends would be a coalition

of the centre, about which much has been heard of late. Middlemasprovides no hint about his views on such matters. However, there isreason to suppose from his earlier work that he is thinking in terms ofa more expansive solution, drawing in a wider range of social forcesthan was ever contemplated in 1944. If this is so then the New Liberalor Fabian model, premised on the existence of a cadre of expert stateintellectuals and the baronial representatives of the major corporateinterests, could not prove very appropriate, curtailing rather thanexpanding the means and channels of representation. But if Middlemasrepudiates a narrow coalitionist solution imposed from above, the

structure of the state itself would need radically to be transformed asthe only possible alternative to a future of political expediency. Nodoubt this will be discussed in the final volume.

Politics and Economics

There exists too a closely related issue of the first importance. So far asit has proved possible to read through the density of empirical materialand unearth the general arguments, one of Middlemass principal themesconcerns the relationship between the political dimension of the 1944

contract and its evolving economic strategies. And he suggests, as Iread it, that the latter were never able to be realized for any length oftime in a form which could sustain the desired political objectives or(and here I think there is an ambiguity in the presentation) in a formwhich did not depend upon the immiseration of future generations.From this belief derives his critique of those in his own party who oweallegiance to what Middlemas perceives as the outmoded models of

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1944 and 1964. And in this respect his argument is at its most surewhen he demonstrates how quickly conditions changed in the postwaryears, fast making the premises of the White Paper look as if they werethe product of another era. For this reason his project differs from theone voiced by todays pragmatic, piecemeal, reflationist politicians, forMiddlemas does possess a strong sense of the need for expanding theeconomy in such a way asand in orderto construct and reproduce

an entire new political contract. It is in this vein that he has talked ofthe need for a new Keynes. Thus even if, as he sees it, 1944 marksthe high point of a desirable, pluralistic institutionalization of politicalauthority, any future strategy which might attempt to reproduce thiscorporatist consensus will, so Middlemas seems to suggest, inevitablyrequire fundamentally new economic solutions. But there is little signof a new Keynesianism, and even less that the inherited techniques offine tuning will do much to prevent future reflationary strategies frombecoming highly vulnerable to the effects of a new sequence of balanceof payments crises. Moreoverand this I see as the central issuegiven the Treasury and mandarin perspective which sustains Middle-mass account, any discussion of the social principles which articulatedthe historic compromise of the forties, and which lay at the foundationsof the social-democratic ideal, is effectively excluded. Just as seniorrepresentatives of the state bureaucracy have put on record their abhorr-ence of Thatcherite Conservatism, so too Middlemas is able to voicehis own critique.39 But while one could legitimately argue that thedenunciations by the mandarins express their frustrations and fears thatthe old regime which they largely brought into being is fast slipping

away, and one could equally note that Middlemas has few if any illusionsabout the desirability or possibility of reconstructing the economic basisof the old order, it is nonetheless the case that he shares with themandarins an incapacity to comprehend the social principles which wereat stake in the founding moments of the old corporate bargain. Henowhere assesses how the social reforms which were institutionalizedin the 1940s were conceptualized as social rights: rights to a job, home,education and rudimentary welfarenot much, when all is said anddone, in a nation still prosperous and with relatively highly developedproductive forces. As it was succinctly expressed in The Times at the

very beginning of the forties: If we speak of democracy we do notmean a democracy which maintains the right to vote but forgets theright to work and the right to live.40 For those on one side of thecontract the idea of these minimum social rights was all that gavemeaning to the pact struck in the wartime state.

Yet as Middlemas and others have shown, the universal provision ofthese rights consistently ran up against other economic and financialimperatives: protection of the Sterling area, overseas investment, therate of exchange. This indeed was the context in which the White Paperwas produced and all concerned assumed that an active export tradewould be essential to the realization of its objectives. However, it is

39 For a recent example, see the letter to the Financial Times, 16 March 1987, signed by the Chief

Economic Advisers to successive governments from 1947 to 1979.40 This comes from a Times editorial, 1July 1940, written by E. H. Carr; quoted by Barnett,Audit of

War, p. 18.

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clear that despite the succession of balance of payments crises, thebalance of trade remained favourable until as late as 1973, suggestingthat the structural bias in the British economy towards the financialsectors was prominent throughout this whole period, bringing with itcatastrophic effects.41 Middlemas does not deny that the British state wasoverextended in its late-imperial and subordinated special-relationshiproles. But in his diligent pursuit of the vicissitudes of economic manage-

ment, the initial social objectives on which the pact was premised simplypass him by. This is odd it one so apparently committed to casting anew political contract for the 1990s, and throws considerable doubt onits potential efficacyunless of course the Hayekian conviction that theconcept of social rights is no more than a mirage bred by delusion hassurreptitiously taken hold of Middlemass mind?

Conclusion

This wholesale demotion of the issue of social rights, even as a matter

for debate or discussion, marks equally Correlli Barnetts The Auditof War (although Barnett also urges his readers to drop excessivelysentimentalist views which cloud received interpretations of the industr-ial revolution as an unduly brutal affair: from this we can perhaps gainsome idea of what his programme for a future dirigiste economy wouldbe like). Read in conjunction, the Middlemas and Barnett audits ofthe forties indicate the degree to which the historiography has finallyswung away from an earlier social-democratic orthodoxy. Both hold tothe thesis that the pressure of popular demand for a universal systemof social security (including full employment) created insurmountablelong-term deficiencies in the economy which lie at the root of ourpresent troubles. Empirically there is an argument here, or half anargument, precisely because this situation was inevitable so long asthe commitment to maintaining Sterling as an international currencydetermined domestic policy. Yet once a broad hypothesis is establishedexclusively in terms of the domestic dimensions, it becomes possible toshort-circuit the historical complexities, writing out the overseas drainon the internal economy, ignoring the essential productivity of thepublic sector in enhancing the value of capital in private markets, and

to formulate a suitably tabloid conclusion which conforms to theimperatives of current political truths. Neither Middlemas nor Barnettgoes this far: each has sufficient intellectual integrity to prevent such atumble; and while Correlli Barnett must find it difficult to summonenthusiasm for the industrial strategy of the Thatcherites, Keith Mid-dlemas is, from within his idiosyncratic niche in contemporary Conserva-tism, an uncompromising critic.

But the differences between them need also to be noted. Middlemasultimately is concerned more with the state and the political system,

Barnett with the structural retardation of British manufacturing. Of thetwo Barnett is the more radical in his denunciations, regarding theLend-lease solution of the war as the coup de grce, the moment whichfinally ensured the impossibility of the British economy ever revivingits former position. And where Middlemas is demonstrably enamoured

41 The case has been cogently put by Andrew Gamble, Britain in Decline, London 1981, pp. 1145.

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of the progressive state administrators who entered Whitehall in 194041, Barnett is at his most active in insisting that they and their typewere representative of an outmoded stratum of traditional intellectuals,their well-meaning, liberal, evangelical humanism hopelessly inadequatefor the task of rebuilding the economy on a scientific and technologicalbasis. They were, in Barnetts eyes, the culprits of the story, the New

Jerusalemists as he calls them, responsible for all the errors of the

period. Much of this can raise a smile, for Barnett is at his most racyat such moments. In its essentials his case is also strong, reviewing oncemore the distinctive intellectual requirements of the patrician, Oxbridge,upper-class Englishmanalthough whether Barnetts projected Gaullistfuture would be preferable is at least a moot point.

But there is evidence to suppose that Barnett becomes intoxicated byhis own rhetoric. He argues, correctly, that in the closing months of1942 and early 1943when the military tide turnedthe ideas of socialdemocracy, nurtured for a decade or more in the various research

groups dedicated to middle opinion, first came to dominance inthe institutions of the state. But acceptance of these ideas, for someenthusiastically as a matter of principle, for others pragmatically anddefensively, did not as he implies eradicate party political difference. Asingle entity, conveniently labelled New Jerusalemist, does not makehistorical sense. For what this eliminates is the process by which adistinctively Conservative version of this reforming impulse gainedground, and arguably, from 1947 or thereabouts, predominated intellec-tually. Moreover, in reviving older traditions of Conservative collectiv-ism, the policies which developed in the Conservative camp accordmore with Correlli Barnetts prescriptions for the renovation of Britainsindustrial base than one could ever suppose from his monograph.Commitment to full employment and welfare wasfor all Conservativesof the timesecondary and conditional on the resurgence of productiv-ity in the manufacturing sector. For example, mention has already beenmade of the Tory Reform Committee, which started out life at exactlythe key moment in early 1943 which Barnett describes. Its president,chosen by the young tyro reformers as a symbolic reference, was EarlWinterton. Winterton himself head stood as a Unionist candidate in

1904, while still an undergraduate, on the ticket of the Tariff ReformLeague, the first candidate to do so, embracing fully Chamberlainsversion of collectivism, industrial renewal and the advancement of aspecifically bourgeois politics. He won the seat and went on to assumethe role of Chamberlains young lieutenant in parliament. That such aman as this should be the figurehead for the Tory reformers of the1940s suggests the need to make much sharper political distinctionsamongst the so-called New Jerusalemists, for Tory reformism in the1940s was inextricably bound up with the commitment to create ahighly competitive private manufacturing sector. If these distinctions

are conflated or lost it becomes impossible to see how the principalparty which was to manage the settlement in the fifties evolved. Itbecomes impossible to comprehend the nature of Butlers alliance inthe Conservative Party built around the Industrial Charter in 1947, thecharacteristically Conservative articulation of welfare politics organizedon the idea of selectivity in the 1950s, and ultimately the stresses andstrains which accumulated in the Conservative Party as a result of

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maintaining the principles of 1944, and which eventually drove themost prominent of them (like Thorneycroft) to do battle against theirformer selves, against the very concept of social rights and the regimein which those rights were institutionalized.

Middlemass more abrupt but undeniable conclusion bears precisely onthis matter: Although it is axiomatic that a system in which corporate

bias is prevalent will tend deliberately to avoid primary conflict infavour of a continual series of compromises, conditions can occur inwhich one or other of the participants reverts to the fundamental levelof conflict in order to try to neutralize or even eliminate what it seesas its principal competitor by excluding it.42 This option comprised thejoker in the pack. What may prove in the future to be the mostsurprising feature of these years is the fact that the representatives ofthe major interests held out for so long, rejecting the temptation toeliminate opposing forces, doing their utmost instead to retrieve asystem which in conception was fraught with potential and real fissuresand was decomposing with some rapidity even before the end of the1950s.

For of course the Thatcherites, who finally decided to unleash the joker,also have their roots deep in this dynamic. From the perspective of thelongue dure it can be understood as the culmination of this irregular butlong resistance to the pact of1944although its specifics could nothave been predicted, nor the fact that the final assault would come fromthe Right. The combined objectives of uprooting the inherited regimeof accumulation on which the postwar system rested,43 the wilfuldestruction of social rights and the installation of a new authoritarianstatehowever uneven their realizationhave eliminated the principalantagonist from the corporatist councils and shredded the politicalcontract of1944. To this extent Thatcherism has institutionalized anunambivalent resolution to the dilemmas of the previous decades;flagrant recourse to a selectively targeted electioneering Keynsianismin 198687 has produced a third Thatcher victory and the disarray ofthe moderates of the centre.44

The virtue of Middlemass history is that it uncovers the anxieties,prevalent from the very earliest moments, about the economic basis ofthe postwar system amongst those charged to manage it. Initially,anxiety about economic objectives was combined with a commitmentto the political requirements of the contract; yet by the end of the 1950scommitment both to the political contract and to a renewal of theeconomic objectives was proving increasingly hard for Conservativesto uphold. As Middlemas explains, it was from this impasse that the

42 Britain in Search of Balance, p. 11.43 See Bob Jessop, Thatcherisms Mid-life Crisis, New Socialist, March 1986 in which he discussesthe productive, Fordist basis to the settlement.44 Yet Middlemass optimism has not collapsed. For he perceives emerging through the ruins of

Thatcherism a revived corporate spirit, evident in Lord Youngs interventionism in employment

policy, the keen sense of national interest now displayed by the Bank of England, and in the influence

of Norman Williss realism at the TUC which he likens to the initiatives of a previous incumbent,

Walter Citrine. See Middlemas, The Life and Death of the Corporate State,New Statesman, 26June

1987; and Will She Have to Listen This Time?,New Statesman, 3July 1987.

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policies of 1964 were elaborated. He does not discuss, however, thefact that there emerged simultaneously the critique of Keynesianism assuch, a critique which led implacably to the conclusion that it wasnecessary to ditch altogether the incubus of1944.45 The adherents tothe principles of1964andthose who aspired after a resurrected 1914were born in the same conjuncture. The convergence between anemergent neo-liberalism and an authentic strand of radical Right Tory-

ism did not generally occur, however, until later. The disintegration ofthe forties pact, anticipated most dramatically during Suez, was firsteffectively articulated not principally by anxieties about economic man-agement but by political divisions caused by Britains post-imperialisolation, fought out in the sixties on the issues of immigration andRhodesia. Thus a significant minority of the Conservative Party effec-tively withdrew its attachment to the contract of1944, and saw no reasonwhy either it or its front bench should be bound by its conventions andobjectives. These factions initiated a protracted struggle inside the party,organizationally and philosophically, in order to discredit and destroythe policies which condemned Conservatism to inhabit the miasma ofthe middle ground, aiming gradually to prise apart Butlers alliance of1947.

If the position of the neo-liberals, recuperating the golden age of1914, is relatively straightforward to understand, the evolution of thepersonalities of1964 is more complex and any adequate explanationwill require a much more detailed empirical knowledge than as yet wepossess. The elaborate plans For Heaths so-called quiet revolution

which were incessantly drafted in the years of opposition in the 1960swere devised in order to create the means for remaining within therecognized political arena defined by the pact of1944, while renovatingthe economic strategies in order to make this possible. Yet even by the1960s the initial economic imperatives codified in 1944 led inexorablyto a political strategy in which the unions had to be disciplined andbridled, forcing them back into a role which would constrain labour toserve simply as another corporate interest with no special claims orprivileges. Few such constraints could be seen curbing the freedom ofcapital, certainly not in the City. The Wilson government displayed

its incapacity to overcome these dilemmas, drawn into ever riskierconfrontations with the unions as the only solution it could comprehend,caught within the dynamic of1944 but unable to transcend it. In 197072 Heath found himself in the business of overturning the system towhich he himself was committed; his bold attempt to tackle its deleteri-ous effects had threatened to undo the system itself, and impose aradically new set of political goals. Heath drew back, his efforts toprolong the settlement a spectacular disaster.

Nineteen seventy-four, a traumatic year for the Conservatives, provides

the key moment. The adherents to the politics of1964 were discreditedand dispersed in different factions inside the Conservative Party, withdisillusioned Heathites (Lawson, Howell) stumbling in the chaos into

45 For an impressively clear-headed defence of this position, T. E. Utley, The Great Soft Centre,

Crossbow, vol. 1 no. 1, 1957; the same issue carried an article by Lionel Robbins arguing, significantly,

that economic redistribution had gone far enough and should be reversed.

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the revelatory truths of monetarism, exhibiting at the same time a deftappreciation of what was required for self-advancement. Even thosewho still remained committed to retrieving the political obligations ofthe old contract now insisted that inflationand the unionswere theprimary impediments to its recovery, conceding in a stroke all politicalinitiatives to the neo-liberal wing of the party.46 It was at this moment,in Josephs Preston speech in September, that the first attempt was

made by the neo-liberals to move into a position of command in theparty. Joseph himself failed, but the ideological reconstruction ofConservatism was well advanced. After Thatchers election to theleadership in 1975 and the internal struggles of198081, commitmentfrom the Conservative Party to the wartime settlement was either all butnon-existent, or from the defeated Wetsby force of circumstancesslender indeed. The Conservatives were the last to enter the bargainand the first to break out.

46

Thus the October 1974 Conservative Manifesto (drafted by Sir Ian Gilmour) claimed: Everything elseis secondary to the battle against inflation and to helping those who have been wounded by it.

conservatives and corporatism-nlr16206

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