We’re desperate to believe in something. But bringing God into economics is risky

http://www.theguardian.com/commentisfree/2015/mar/02/god-economics-general-election-thatcherism

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With just over two months to go until polling day, it is becoming clear that the most interesting ideas are emanating from those not seeking election. The Anglican bishops have issued a pastoral letter which, despite being mauled by leading Conservatives, legitimately aims to move the debate beyond the old market-v-state model towards a new vision, one that incorporates themes of civil society, interdependency, human dignity and the common good.

Meanwhile, leading Conservative thinkers Tim Montgomerie and Stefan Shakespeare have launched their “good right” initiative, which hopes to succeed where David Cameron has so obviously failed: to detoxify the Conservative brand. Making the Tories electable again is certainly the aim, but at its core is an even more ambitious endeavour: to re-establish the moral credibility of the free market. To this chorus of extra-parliamentary voices we might also add “blue Labour” Maurice Glasman and “red Tory” Phillip Blond and, for that matter, Russell Brand. Even if their ideas are unlikely to feature in forthcoming party manifestos, a movement is clearly afoot. This disparate group may differ on the remedy but share a diagnosis: the neoliberal revolution is politically and morally defunct. One way or another, they are all dancing on Thatcher’s grave.

But to those seeking a new moral vision for Britain, Thatcherism itself offers a cautionary tale. It was, much like now, a response to widespread disillusionment and a redundant political consensus. Like the “good right”, Conservatives in the 70s also sought to disconnect the association of collectivism with virtue and reinstate the moral integrity of the “invisible hand”. Margaret Thatcher would eventually cast herself as the shepherd leading the British people out of the dark days of decline towards the path of economic and social enlightenment. Ultimately, however, it was a story of false idols and unintended consequences – one where the mix of God, economics and single-minded vision proved to be toxic. The paradox of Thatcherism is that, like all political ideologies, there was a complete discrepancy between its aims and outcomes.

“Economics is the method; the object is to change the soul,” Margaret Thatcher declared in 1981, revealing the way in which Thatcherism for her was always about transforming values rather than simply GDP. A strong religious basis to her outlook stemmed from her father – the grocer, councillor and Wesleyan lay preacher, Alf Roberts.

If we were sourcing the origins of Thatcherism, we wouldn’t find it in the pages of Hayek’s Road to Serfdom or Milton Friedman’s monetarist theory but in Roberts’ sermon notes, now housed in Thatcher’s personal archive at Churchill College, Cambridge. Contained in them is the theological basis of Thatcherism: an individualistic interpretation of the Bible, a nod to the spiritual dangers of avarice, the Protestant work ethic, praise of the godly virtues of thrift and self-reliance and, finally, a divine justification for individual liberty and the free market. In short, Thatcherism always owed more to Methodism than to monetarism.

Thatcher herself had been a preacher before she entered politics, and even though she transferred this missionary energy from pulpit to podium, her religious values remained crucial. On becoming Conservative leader, she saw it as her chief mission to discredit the assumed moral superiority of socialism and reconnect the broken link between Protestant and capitalist values in Britain. Preaching from the pulpit on several occasions – most famously to the Church of Scotland’s General Assembly in 1988 – Thatcher unashamedly asserted the Biblical case for the sovereignty of individual liberty and the ‘invisible hand’. Thatcher’s pledge, of course, was that greater wealth would not encourage selfishness but neighbourliness. With more money in our pocket and less dependency on the state, we would be free to exercise our moral virtue and perform our duty as Good Samaritans.

We would not walk by on the other side, nor would we need state-imposed traffic lights to guide us there.

In the end, though, even she was prepared to admit she had failed in her crusade. When asked by Frank Field what her greatest regret in office was, she replied: “I cut taxes and I thought we would get a giving society, and we haven’t.” She was right. A survey conducted by the Charities Aid Foundation in 1989 revealed that those who gave the most to causes were not from the prosperous south but were disproportionately located in those areas that benefited least from the Thatcher boom.

Thatcher’s naivety was perhaps her greatest flaw: her understanding of capitalism for example was more a provincial than global one; Alf Roberts behind the counter of his grocery shop rather than the yuppie on the trading floor was the image of market transaction in her mind. It is little wonder then that she could not understand the world she had created, where the nation’s homes and household budgets were entwined with a global financial services sector that made up an ever-growing percentage of Britain’s GDP, largely internationally owned and in the hands of speculators concerned with short-term gain and distant from the deals and lives they were gambling on. In private Thatcher used to rage against bankers and their bonuses. Why did they not follow the example of those in the army she would cry, which in her view was the model demonstration of responsibility to one’s fellow man.

As someone reared in a home where profligacy was a vice and thrift a virtue, nor could Thatcher fathom why so many Britons struggled with debt. Yet paradoxically it was her government that did most to encourage it. What might be termed the “democratisation of debt”, be it in the form of credit and store cards, personal loans and of course, mortgages, fundamentally reordered the nation’s psyche and our attitudes towards money and the state. In short, we transferred our dependency from the government to the money-lenders. The notion of deferred gratification or thrift, that is saving for something before consuming it, became an alien concept for Britain’s “grab now, pay later” society. Total consumer credit more than doubled, while the number of credit cards nearly tripled in the 1980s and would spiral to unimaginable levels over the next two decades. This culture of credit too trickled down the social scale for as the government squeezed the benefits system so those low-income households turned to credit companies who asked few questions. In 1980 22% of households were using credit; by 1989 that had trebled to 69%, with an estimated 50% of those loans going on essentials. As the New Economics Foundation report of 2002 into debt recognised this led to the absurd situation whereby “what the taxpayer was providing in terms of benefits, the lender was often taking away – with interest”. It is doubtful that even Thatcher considered Britain’s record personal debt as part of her plan of “setting the people free”.

Thatcherism laid the foundations for a culture in which individualism and self-reliance could thrive, but ultimately it created a culture in which only selfishness and excess were rewarded. Thatcher liked to quote John Wesley’s mantra, “Earn all you can, save all you can and give all you can,” and yet it was only ever the first instruction that was sufficiently encouraged. While Cameron and Osborne have spoken at length about paying off the ‘nation’s credit card’, they have consciously avoided entreating individuals to pay off their own. Tellingly, it is now a vote-winner to talk of governmental thrift but political suicide to talk of personal thrift. That is the true legacy of Thatcherite economics.

When Thatcher said that there was ‘no such thing as society', it was a rallying cry for individual moral responsibility

When Thatcher uttered those now immortal words that there was “no such thing as society”, it was not a negative or flippant statement but a naive rallying cry for individual moral responsibility. Perhaps the flaw in her thinking was not that she did not believe in society but that she had too much faith in man.

Thatcher seemed to have forgotten the key doctrine in both Conservative philosophy and the Bible: the Fall. Thatcherism was a challenge to individual moral virtue, yet in Thatcher’s Eden, when given the choice, we – of course – ate the fruit. Where critics tend to go wrong in their assessment of Thatcher is that they do not consider that there was any moral, only economic, thinking behind it; where Thatcher’s admirers go wrong is that they do not admit that was a fundamental discrepancy between her aims and outcomes.

It is, of course, wrong to heap all the blame on Thatcher. This culture was encouraged and this behaviour continued unabated under New Labour. Much like a gangster’s wife who enjoys the lifestyle but does not question how her husband gets his money, Blair and Brown were content to pocket a significant share of the profits to fund their schools and hospitals.

By 2008 the world seemed on the precipice of something fundamental, but one of the remarkable features of the last seven years is how little has changed. Perhaps Thatcher’s great mistake was that, as Alfred Sherman said, “she saw life in primary colours”.

So there is credibility and value in dreaming up an alternative where Thatcher insisted that there was none. Given the contemporary disillusionment with capitalism, voters are still in desperate need of something to believe in. What the neoliberal experiment of the last 30 years teaches us is not that religion and politics do not mix, but that the politics of certainty is where danger lies.