“Such a Thing as Society,” That Markets and Nations Depend On

On October 31st 1987 Woman's Own magazine published the interview with Margaret Thatcher and its journalist Douglas Keay. It was to be one of her most important interviews because of one statement, that there is "no such thing [as society]." A later statement elucidating the remark was issued by No.10, at the request of the?Sunday Times?and published on 10 July 1988:

“All too often the ills of this country are passed off as those of society. Similarly, when action is required, society is called upon to act. But society as such does not exist except as a concept. Society is made up of people. It is people who have duties and beliefs and resolve. It is people who get things done. She prefers to think in terms of the acts of individuals and families as the real sinews of society rather than of society as an abstract concept. Her approach to society reflects her fundamental belief in personal responsibility and choice. To leave things to ‘society’ is to run away from the real decisions, practical responsibility and effective action.”

This clarifying statement omits one important part of the original interview, so let me quote the relevant section and highlight the important omission, which is the end of the last sentence.

"I think we have gone through a period when too many children and people have been given to understand “I have a problem, it is the Government's job to cope with it!” or “I have a problem, I will go and get a grant to cope with it!” “I am homeless, the Government must house me!” and so they are casting their problems on society and who is society? There is no such thing! There are individual men and women and?there are families and no government can do anything except through people and people look to themselves first."

The interview was given soon after she had won a landslide victory in the 1987 General Election due to a split in the opposition, and with only a 42 per cent share of the vote. She was ?sharing her ideology, which was based on ?Friedrich August von Hayek’s “The Constitution of Liberty.” We know that because, she said so. At the first meeting of her Shadow Cabinet, upon becoming leader of the Conservative Party in 1975, she slammed a copy of it on the table, saying, ‘this is what we believe!”

That ideology, also adopted by Ronald Reagan, included a massive programme of privatisation designed to shrink the state and public institution whilst simultaneously unleashing the full power of market forces.

As Guy Standing notes in “Plunder of the Commons A Manifesto for Sharing Public Wealth,” the election of Margaret Thatcher was a pivotal moment. It marked the start of a wholesale and systematic attack on “the commons” which Standing defines as, “all our shared natural resources – including the land, the forests, the moors and parks, the water, the minerals, the air – and all the social, civic and cultural institutions that our ancestors have bequeathed to us, and that we may have helped to maintain or improve. It also includes the knowledge that we possess as society, built on an edifice of ideas and information constructed over the centuries.”

Standing says his book is “about how the commons have been depleted by neglect, encroachment, enclosure, privatization and colonization.” The policy lasted long after Thatcher, being embraced by all the UK’s political parties. And the austerity programmes following the Global Banking Crisis of 2008 only intensified the problem.

In calling it a problem, I am making my position clear. Now widely discredited, the ideology of neoliberalism preached by Hayek and his disciples including Milton Friedman, and adopted as the foundation of all public policy in many countries since the Thatcher and Raegan era, has been devastating in many ways. And when people say, “the systems isn’t working,” as the majority in the US and UK now do, it is the failings of neoliberalism they are talking about.

All of the key systems we depend on are now in crisis: health, energy, railways, education, water, housing etc. In addition to the problems our failing systems cause us, we have a cost of living crisis, massive levels of public and private debt, economic stagnation, falling living standards for the majority, the highest levels of tax since the second world war, and other problems. But in this article I want to focus on the societal impact and what we need to do about it.

Thatcher was wrong when she said there is no such thing as society. Even Boris Johnson had to admit that during the COVID crisis which demonstrated the importance of society. But she was even more wrong when she said, “no government can do anything except through people.” Her own government demonstrated government can do a great deal of either good or harm.

Given government spending accounts for around 50% of GDP in most developed nations, the actions of governments make it the most influential institution. The actions of any other institution, or of individuals, seem to be insignificant in comparison. But lobbying by business throws that idea into doubt. It is very clear the ideologies adopted by governments can make, or break, a country and the communities in it. And that those ideologies tend to favour business and the markets, not those of society which indicate their growing distrust of both business and governments. ??

Based on what I have said so far, you are probably assuming I am an anti-capitalist? I am not. I am anti the current form of capitalism, based on the neoliberal ideology. And I believe the only thing that will restore confidence in capitalism is an evolution of it, to what I call “Equitable Capitalism” or “Fair Capitalism.” I have written about that previously so, in this article I want to focus on repairing the damage done to society given this is an election year in so many countries and the festering wounds of the discredited ideology will be very visible.

First of all let’s be clear, there is more that unites the supporters of the far right and far left populists than separates them. They are all angry and all share a belief “the system isn’t working.” And they are all correct. And most of us with less extreme responses feel the same.

Through history, since the ancient Greeks and Romans, the great thinkers have repeatedly told us that not only is there such a thing as society, but that society plays a crucial role as a third pillar, determining whether or not a nation thrives or fails. And that the right balance between all three pillars is critically important.

The three pillars are the state (including government and the judiciary), the markets (that drive the economy), and the community or society. There needs to be a separation and a balance of power between them, so they can hold each other accountable. These arguments are well made by Raghuram Rajan, Professor of Finance at the University of Chicago Booth School of Business, in his book “The Third Pillar: How Markets and the State Leave the Community Behind.”

The subtitle of Rajan’s book explains the problem we have today. And he adds, "society suffers when any of the pillars weakens or strengthens overly relative to the others,” and “the pillars are seriously unbalanced today.” As he notes, when communities become dysfunctional, “alienated individuals need some other way to channel their need to belong.” Populist nationalism offers and appealing vision and creates others to blame by fabricating adversaries, but “we can ill afford their short-sighted solutions,” he rightly argues.

Of America Rajan notes, “markets got the upper hand” as “the state became constitutionally limited” and this has been to the detriment of communities. In the US and other countries the state has, in truth, been been captured and corrupted by the markets. Katherine M. Gehl and Michael E. Porter explain this clearly in The Politics Industry.

The sudden deregulation of the financial markets by Margaret Thatcher happened in 1983. It turbocharged the strength of the market. Simultaneously her other policies were weakening the state. But, because she did not believe in the power of community, she diminished the power of local government even more than central government, reducing both the funding and the powers in the 1986 Local Government Act. Both were were then further diminished, and centralisation increased, post-Brexit.

Centralisation is one issue, and a report in 2022 by the Centre for Cities indicates several other long-term trends that demonstrate that neglect has been as much of a problem as deliberate policies. It notes....

“At a minimum, the division of responsibility between local and central government is unbalanced towards the centre, and this seems to be linked to poor local and national economic performance. This is despite on-going churn in local economic policy over the 20th and 21st centuries and dramatic change in the national economy over this period, local economic governance has in contrast been subject to little more than tinkering.”

The situation is likely to vary considerably from one country to another. And the relative power of the three pillars in all countries will always be in flux. But in far too many countries there is a serious imbalance between the three pillars. And it is almost always the community that is marginalised, leading to failing societies.

Enlightened enterprise leaders are aware that no person, no business, no organisation or nation can prosper if communities are failing. It is in all their interests to ensure communities are able to thrive and prosper. But many leaders are too focused on narrow short-term pursuits to step back and recognise the damage they are doing to their own long-term interests. They are not yet enlightened enterprises because they lack the civic intelligence to understand what to enlightened leaders is blindingly obvious. Or they are encouraged by perverse incentives to turn a blind eye to the obvious by the demands of short-term speculators who are wrongly considered investors along with those who really are investors. ??

The Enlightened Enterprise Academy in partnership with Cordial World, is establishing the "Civic Intelligence Academy" to help support the restoration of The Third Pillar. We seek to help communities claim back the power they have lost and to ensure market players and governments understand the price they pay if they undermine communities intentionally or unintentionally. And we seek to support the enlightened leaders who are offering pioneering ways to restore communities.

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