150427 HETSA_ Hirakata

The welfare state reform under the Thatcher government in the UK has been talked in relation with F. A. Hayek. Hayek affected to her economic thinking and she has also admitting his influence. In this paper, I will examine British education policy during 1979-90 and seek some difference between its reform and Hayek’s thought. The core of Thatcher’s reform was to introduce competition among schools and evaluate its performance through comparative league tables to improve education standard. However, Hayek supported just private school and Freedman’s education voucher system. Therefore, I will compare their basic conception of education and welfare state and rethink the character of Thatcherism. I. Crisis of Welfare State and Rise of Neo-Liberalism In this paper, I will examine British education policy under the Margaret Thatcher government during 1979-90 in relation with the idea of F.A. Hayek. Although both the Thatcher government and Hayek seem to be typical neo-liberalists, there are still some differences between Hayek’s thought and the policies of Thatcherism. I will first review Hayek’s criticism concerning a welfare state and public education, and then summarize Thatcher’s school education reform. In doing so, I will rethink the character of Thatcherism. Education, especially school education, is a means to solve ignorance, which is one of Five Giants pointed out in ‘Beveridge Report’ (Beveridge [1942]1969). In the UK, state schools had played an important role in this field. However, in the late 1970s an ineffectiveness of the welfare state became clear and caused political debates, for example how to fund the expanded post-war social policy, in Britain and many other advanced economies (OECD 1981). Before Thatcher came to power, the Heath government had adopted a more procompetitive economic strategy, but it failed, and Britain was forced to return to seek post-war Keynesian Faculty of Economics, E-mail: yas.hirakat@gmail.com 1 1 orthodoxy. After the disastrous ‘Winter of Discontent’, the Thatcher government tried to start pro-market economic policy to restore its economy and introduced market competition into the public sector and public service which were served by civil services and was financed by government expenditure. Usually, we envisage the Thatcher government being influenced by Hayek and other Neo-Liberal thinkers and learning from their ideas and theories in its policy-making process. However, because the forms of neoliberalization were various, the general character of the state in the era of neo-liberalization is hard to describe (Harvey 2005, 70). Though Hayek was known as one of the central neo-liberal figures, he did not join discussions of economic policy until around 1970. But he wrote that ‘[b]y the summer of 1974, however, the problem of inflation had become so alarming that I felt it to be my duty once again to speak out’ (Hayek 1978, 191). We can also see Hayek’s influence on Thatcher in her memoir, It was only in the mid-1970s, when Hayek’s works were right at the top of the reading list given me by Keith Joseph [a leading New Right politician], that I really came to grips with the ideas he put forward. Only then did I consider his arguments from the point of view of the kind of state Conservatives find congenial—a limited government under a rule of law—rather than from the point of view of the kind of state we must avoid—a socialist state where bureaucrats rule by discretion. (Thatcher 1995, 50-51) From the mid-1970s, Road to Serfdom and Constitutions of Liberty, which appeared in the New Right’s reading list, were typical productions for the New Right. They enhanced its influence as the right wing of Conservative Party and became the support base for the Thatcher government in the 1980s. However, there was little evidence of Thatcher’s monetarist flirtations before 1974 (Keegan 1984, 47). Thatcher and Joseph had joined the Edward Heath government (1970-74) as ministers and gradually felt the need to change policies as they faced the failure of Conservative’s economic and social policy. In this process, New Right politicians analyzed their and Labour’s failure and searched and learned new economics advocated by Hayek or Milton Freedman to form their own policy. How do we describe Thatcherism as the ideological base of the Thatcher government? Nigel Lawson, the long-serving Chancellor of the Exchequer, noted that ‘[t]he right definition [of Thatcherism] involves a mixture of free markets, financial discipline, firm control over pubic expenditure, tax cuts, nationalism, ‘Victorian values’ (of the Samuel Smiles self-help variety), privatization and a dash of populism’ (Lawson 1993, 64). However, during eleven years in office, various policies were gradually implemented and its method or targets sometimes changed. So it is hard to define Thatcherism as a consecutive idea or thought.