Labour's adaptation to Thatcherism led to the proliferation of national mythologies, which the party leadership played no small part in popularising. These included most forcefully the idea that, whatever people told pollsters, they did not want to pay for a better funded public sector, or welfare state. They may be attracted to the abstract idea of superior public services, sentimentally attached to an outmoded form of social solidarity, but when in the ballot box they invariably sided with prudence and material self-interest. New Labour thoroughly embraced this false wisdom, and made the preservation of low taxes a cardinal principle. Once elected, amid a crisis in the public services and a general deterioration of Britain's economy and institutions, a constant circle to be squared for policymakers, especially in Brown's Treasury, was how to raise money without raising taxes, or at least without appearing to.

This led to, among other things, the fiscal calamity of the Private Finance Inititiative as a means of generating up-front revenue for new hospitals and schools without appearing to raise taxes. It also led to the culture of means-testing as an attempt to make spending constraints seem 'progressive'. The myth that the public had gone Thatcherite was obviously nonsensical. It wasn't reflected in opinion surveys, in voting patterns, or in other forms of political behaviour. New Labour's cleaving to Thatcherism cannot be seen as a reflection of what the public wants.

In The Meaning of David Cameron, I hypothesised that:

what happened to Labour was less an adjustment to psephological realities than an adjustment to socioeconomic realities. The Tories’ defeat of one union after another confirmed that capital’s power with respect to labour had increased, and that realistically it could also defeat any government that did not implement the fiscal, financial, and macroeconomic reforms that it supported, and which had been carefully elaborated in business-funded think-tanks as well as in the terror-state laboratories of Latin America. Labour thus set out to prove its credentials to businesses and the right-wing media, showing that it accepted every tenet of neoliberal doctrine even at the expense of offending or losing core voters. This culminated in New Labour’s grubby relationship with Rupert Murdoch, and Tony Blair’s crawling before the rich.

Recently, my attention was drawn to this elegant assessment of Thatcher's "Anglo-Poujadism", drawing on the Eurocommunism of Stuart Hall, the soft leftism of SDPer turned Liberal Democrat David Marquand, as well as a notable survey by the psephologist Ivor Crewe, co-author of a sympathetic review of the brief life of the SDP. It displays qualities that mark the author out as an intellectual heavyweight, a hard-hitting polemicist and a skilful prose stylist. Written in 1989, the review essay looks forward to Thatcherism becoming a "wasm", noting that for all the calamities that Thatcher had visited on the UK, she had not fundamentally shifted public opinion, which - on the NHS and welfare, for instance - had actually moved to the Left. Thatcher had won because of a divided opposition, not because of her own popularity. "The truth is that Mrs Thatcher holds power in spite of Thatcherism and not because of it." And in short order, when New Right ideology had exhausted itself in most of its host countries, people would look back and "wonder what all the fuss was about". This seems remarkably complacent in retrospect. And there is a tendency to revert to belabouring an Aunt Sally version of Thatcherism as, in a word, 18th Century economics and 19th Century politics, the better to exaggerate Labour's ideological distance from the Tories. Still, it is a robust defence of moderate social democracy as a popular and pragmatic electoral option.

The essayist, of course, was Gordon Brown. Little more than three years later, Brown et al were staring at the results of the 1992 general election in disbelief. The Tories had won a decent plurality, after poll leads at times giving Labour more than 50% of the vote, especially after the poll tax riots. The reasons for this electoral collapse really had little to do with clause 4, or the trade unions, or high taxes, or the working class, or with Neil Kinnock being a dreadful Welsh oik. In fact, the most extensive research showed that the biggest single factor in Labour's loss was still the division in the anti-Tory vote, specifically the fact that of those who defected from Labour to the SDP-Liberal Alliance between 1979 and 1983, the majority had broken for the long-term. They had broken with Labourism - not to Thatcherism, as I also note in my book, but to a centre-left politics that was more radical on 'social' and defence issues than on strictly class issues.

More fundamentally, as Paul Foot wrote at the time, electoral politics moves to the Left when the organised working class is strong, and notching up victories. The organised working class, though rumours of its death were exaggerated, was not strong, and hardly notching up victories to make up for the raw defeats of the 1980s. The only powerful social movement of the period was the anti-poll tax campaign, and it was one which Labour had done everything to stamp on. The involvement of Labour councils in aggressively prosecuting non-payers, for example, squandered any possibility that the party would make impressive gains on the basis of that.

However, the right-wing faction in the leadership, including John Smith, Gordon Brown and Tony Blair, took a different view. They seem to have concurred with The Sun on who had really won the election. Prosaically, the right-wing of big capital had, through the press, helped mobilise an electoral coalition comprising the petit-bourgeois bedrock, much of the 'skilled working class' and a significant minority of the professional middle class. That they had been able to do so showed that the organised working class as the basis for an electoral vehicle was finished. It showed that most people were too instinctively bigoted and conservative to vote for a real social democratic party. The Labour Right decided that it was time to radically overhaul the party's structures, attack the trade union link, and refashion the party into a much more middle class, business-friendly vehicle. Socialism in both its parliamentarist and Stalinist versions - not mutually exclusive, by the way - was out. Market liberalism was in. And that is exactly what Thatcher set out to accomplish. She had always said that her aim was to destroy socialism in Britain - by which she meant social democracy. Labour's capitulation, wholly unjustified on purely psephological grounds, falsified Brown's diagnosis that Thatcherism was a flash-in-the-pan aberration, consecrating it as political common sense. And so here we are.

PS: Sunny Hundal has written the first response to my article about the cuts yesterday. Further responses follow over the next few days, and my final rejoinder will be published on Monday.