3LiberalNationalism
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In neither country did this happy continuum last. In Britain and in the United
States the success story of postwar collectivism was disrupted by a series of
government failures which, beginning in the 1960 s, persisted into the following
decade. Although reaching deeper levels of change in Britain, cause and eVect were
similar. The coordinating power, party government in Britain and presidential
leadership in the USA, succumbed in classic illustrations of self-defeating plural-
ism, or as I called it in the subtitle ofBritain Against Itself( 1982 ), ‘‘the political
contradictions of collectivism.’’
This loss of control overWscal and economic policy contributed massively
to burgeoning budget deWcits and raging price and wage inXation, as exempliWed
in the last days of the Great Society and the ‘‘winter of discontent’’ of the Callaghan
government. Experimenting with models of rational choice theory, I thought at
Wrst that the source of the troubles was democratic collectivism itself, the inclusion
of so many decision-makers as to make collective decisions virtually impossible.
Yet these failures of collectivism also had a further source. As anyone who lived
through the 1960 s and 1970 s will recall, the government failures were overshadowed
and indeed precipitated by an immense cultural upheaval. The attack on authority
and order struck every sphere: dress, music, manners, education, sex, marriage,
work, religion, race relations, and, perhaps most sharply, politics and government.
Indirectly this attack on the old solidarities opened the way for the free market
advance in public policy initiated by Reagan and Thatcher and the subsequent
economic recovery. In the political culture of both countries, a shift from
the collectivist attitudes of the postwar period to more individualist attitudes
eased the movement of policy from public choice toward market choice. Accord-
ingly, when the left-of-center opposition took over, both Clinton and Blair
accepted the new outlook, acclaiming in their identical rhetoric ‘‘the end of big
government.’’ Still, both also sought to add a radical modiWcation which they
termed the Third Way.
In Britain, reXecting this reorientation of political culture, Thatcher’s eradica-
tion of Tory paternalism from the Conservative program was complemented by
Blair’s no less radical purge of socialism from New Labour. One outcome was a
marked Americanization of British political institutions and public policy. One
cannot fail to note the contrast with the strong Anglophile tendencies of American
politics during the immediate postwar years.
In broad outline, the institutions of the welfare state and managed economy
created in the postwar years had still framed the outlook of Gaitskell and Macmil-
lan. Leading the attack on this bureaucratic, corporatistic, interventionist regime,
Thatcher abolished the nationalized industries, privatized public housing, and
demolished the privileged position of organized labor. No less surprising, this
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