For 30 years big business, neoliberal thinktanks and the media have colluded to capture our political system. They're winning
After contemplating a military coup Sir James Goldsmith went on to form the Referendum party, slogan: Let the People Decide. Photograph: Jacqueline Arzt/AP
To subvert means to turn from below. We need a new word, which means to turn from above. The primary threat to the democratic state and its functions comes not from mob rule or leftwing insurrection, but from the very rich and the corporations they run.
These forces have refined their assault on democratic governance. There is no need – as Sir James Goldsmith, John Aspinall, Lord Lucan and others did in the 1970s – to discuss the possibility of launching a military coup against the British government: the plutocrats have other means of turning it.
Over the last few years I have been trying better to understand how the demands of big business and the very rich are projected into policymaking, and I have come to see the neoliberal thinktanks as central to this process. These are the groups which claim to champion the free market but whose proposals often look like a prescription for corporate power.
David Frum, formerly a fellow of one of these thinktanks – the American Enterprise Institute – argues that they "increasingly function as public relations agencies". But in this case, we don't know who the clients are. As the corporate lobbyist Jeff Judson enthuses, they are "virtually immune to retribution … the identity of donors to thinktanks is protected from involuntary disclosure". A consultant who worked for the billionaire Koch brothers claims that they see the funding of thinktanks "as a way to get things done without getting dirty themselves".
This much I knew, but over recent days I've learned a lot more. In Think Tank: the story of the Adam Smith Institute, the institute's founder, Madsen Pirie, provides an unintentional but invaluable guide to how power in Britain really works.
Soon after it was founded (in 1977), the institute approached "all the top companies". About 20 of them responded by sending cheques. Its most enthusiastic supporter was the coup plotter James Goldsmith, one of the most unscrupulous asset strippers of that time. Before making one of his donations, Pirie writes, "he listened carefully as we outlined the project, his eyes twinkling at the audacity and scale of it. Then he had his secretary hand us a cheque for £12,000 as we left".
From the beginning, senior journalists on the Telegraph, the Times and the Daily Mail volunteered their services. Every Saturday, in a wine bar called the Cork and Bottle, Margaret Thatcher's researchers and leader writers and columnists from the Times and Telegraph met staff from the Adam Smith Institute and the Institute of Economic Affairs. Over lunch, they "planned strategy for the week ahead". These meetings would "co-ordinate our activities to make us more effective collectively". The journalists would then turn the institute's proposals into leader columns while the researchers buttonholed shadow ministers.
Soon, Pirie says, the Mail began running a supportive article on the leader page every time the Adam Smith Institute published something. The paper's then editor, David English, oversaw these articles himself, and helped the institute to refine its arguments.
As Pirie's history progresses, all references to funding cease. Apart from tickets donated by British Airways, no sponsors are named beyond the early 1980s. While the institute claims to campaign on behalf of "the open society", it is secretive and unaccountable. Today it flatly refuses to say who funds it.
Pirie describes how his group devised and refined many of the headline policies implemented by Thatcher and John Major. He claims (and produces plenty of evidence to support it) either full or partial credit for the privatisation of the railways and other industries, for the contracting-out of public services to private companies, for the poll tax, the sale of council houses, the internal markets in education and health, the establishment of private prisons, GP fundholding and commissioning and, later, for George Osborne's tax policies.
Pirie also wrote the manifesto of the neoliberal wing of Thatcher's government, No Turning Back. Officially, the authors of the document – which was published by the party – were MPs such as Michael Forsyth, Peter Lilley and Michael Portillo. "Nowhere was there any mention of, or connection to, myself or the Adam Smith Institute. They paid me my £1,000 and we were all happy." Pirie's report became the central charter of the doctrine we now call Thatcherism, whose praetorian guard called itself the No Turning Back group.
Today's parliamentary equivalent is the Free Enterprise Group. Five of its members have just published a similar manifesto, Britannia Unchained. Echoing the narrative developed by the neoliberal thinktanks, they blame welfare payments and the mindset of the poor for the UK's appalling record on social mobility, suggest the need for much greater cuts and hint that the answer is the comprehensive demolition of the welfare system. It is subtler than No Turning Back. There are fewer of the direct demands and terrifying plans: these movements have learned something in the past 30 years.
It is hard to think how their manifesto could have been better tailored to corporate interests. As if to reinforce the point, the cover carries a quote from Sir Terry Leahy, until recently the chief executive of Tesco: "The path is clear. We have to be brave enough to take it."
Once more the press has taken up the call. In the approach to publication, the Telegraph commissioned a series of articles called Britain Unleashed, promoting the same dreary agenda of less tax for the rich, less help for the poor and less regulation for business. Another article in the same paper, published a fortnight ago by its head of personal finance Ian Cowie, proposes that there be no representation without taxation. People who don't pay enough income tax shouldn't be allowed to vote.
I see these people as rightwing vanguardists, mobilising first to break and then to capture a political system that is meant to belong to all of us. Like Marxist insurrectionaries, they often talk about smashing things, about "creative destruction", about the breaking of chains and the slipping of leashes. But in this case they appear to be trying to free the rich from the constraints of democracy. And at the moment they are winning.
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