What we do in the shadows: dual industrial policy during the Thatcher governments, 1979–1990

Abstract

Selective industrial policy in the United Kingdom is conventionally believed to have vanished prior to the global financial crisis. This article, in contrast, argues that industrial policy remained an intrinsic, if seldom acknowledged, element of neoliberal statecraft. The basis of this is a subterfuge, conceptualised here as a ‘dual industrial policy’, which we explore via an empirical focus on the Thatcher governments. Throughout this time, actions explicitly endorsed by governments as industrial policy generally corresponded with neoliberalism’s hostility to intervention. These conveniently distracted attention from a second set of policies which, although never codified by government as industrial policy, were intended to affect the allocation of resources between economic activity. Analysis of official government publications and expenditure reveals that industrial policy expenditure under Thatcher was far higher than customarily reported. The United Kingdom’s approach has important implications for debates about neoliberal resilience, especially neoliberalism’s capacity to conscript apparently contradictory ideas.

The distinctiveness of state capitalism in Britain: Market-making, industrial policy and economic space

“…The well-documented failures and limitations of British industrial policy in this period are also part of this story (Chang and Andreoni, 2020). Yet, it would be incorrect to say that conventional industrial policies were entirely absent, even as neoliberalism was ostensibly embraced by elites after 1979 (Woodward and Silverwood, 2022). Instead, as we have sought to show in this section, these conventional industrial policies were increasingly directed to secure competitive advantages for financial capital (Silverwood and Woodward, 2018).…”

“…The unwillingness of British financial institutions to invest in manufacturing was undoubtedly a contributory factor in Britain's post-war manufacturing decline. Elsewhere, empire, whose colonies continued to provide 'captive' markets for manufacturing exports, allowed elites in the early post-war period to evade more radical experiments to secure domestic industrial modernization and helped, at least for a time, to mask Britain's industrial decline relative to its competitors (Silverwood and Woodward, 2022;Williams, Williams and Thomas, 1979). Source: Tomlinson (1990: 332).…”

Is industrial policy back in fashion? Text-as-data evidence from UK policy documents

“…18 The sample used in this section contains 4867 documents, representing all command papers other than international treaties published between 1983 and the end of the Johnson government in 2022an average of about 124 papers per year. These documents have been widely used in the historical literature, including on industrial policy, as they constitute a long-running, institutionalized, way for 16 See the summaries in Edquist 2006, Warwick 2013, Bulfone 2023 For example, Crafts and Hughes 2013, Owen 2012, Parker, 2009, although see also the counterargument in Woodward and Silverwood 2023. governments to present their approaches to policy. 19 Command papers are used by the executive to introduce policy initiatives and major legislation, to solicit public consultations, to report on the activities of all government bodies, and to answer inquiries from parliamentary committees.…”

“…These patterns show that, while it would be impossible to discount a longer-term effect from partisan changes or events such as the financial crisis or Brexit on changes in economic policy approaches, there is only limited indication of discontinuous shifts, and instead the hypothesis of gradual evolutions-that may have been triggered by political or external changes-receives more support. 20 Woodward and Silverwood, 2023, include agricultural subsidies in their expansive definition of industrial policy.…”

“…Coulter (2022) reviews the same developments, which he traces back to the pre-2010 Labour Government, while expressing substantial skepticism on their durability and effectiveness. Finally Silverwood and Woodward (2018) and Woodward and Silverwood (2023), while again acknowledging the shift in rhetoric and some aspects of policy, emphasize the continuity between business-friendly policies during the Thatcher years and the newer approaches. Given these debates and uncertainties, developing quantitative indicators of industrial policy use in the UK would allow a more precise identification of the extent, timing, and nature of the hypothesized shift.…”