TIME: Almanac 1993/TIME Almanac 1993.iso/time/caps/81/81.39

Text File | 1992-09-25 | 34KB | 598 lines

                                                                                February 16, 1981

BRITAIN

Embattled but Unbowed


As Britain reels from recession and political turmoil, Thatcher
soldiers on


Even by the rowdy standards of the House of Commons' "cheer and
jeer" debate, Prime Minister Margaret Thatcher was in for a
bruising confrontation as she rose from the government front
bench last week to answer hostile opposition challenges about
the country's unemployment, the worst since the 1930s. Days
earlier, when she wore a black dress. Labor M.P. William
Hamilton had pointed a taunting finger at her and inquired
derisively, "Is she dressed in black because of the unemployment
figures?"  Now she was meticulously turned out in a tailored
gray suit, a soft white bow at her neck, to face another
onslaught. In her coolly accented voice, she delivered a
forceful and familiar message:  only sound money and
competitive industry can bring down inflation and eventually
create new jobs for Britain.

From the Labor benches jumped M.P. Dennis Skinner, a militant
leftist. Stabbing at the air, he roared, "Same old story!"
Thatcher, coming alive, snapped back, "Of course, it's the same
old story. Truth usually is the same old story."  Almost
menacingly, Skinner leaned toward her and charged, "We'll get
you out--either in this place or outside it."  The threat of
going outside Parliament to bring down a government brought
gasps from many M.P.s  Thatcher did not flinch. "Rubbish," she
replied. Then she added, "Indeed, he is the face of the true
new Labor Party--not of its democrats--but those who have moved
further and further left, towards the East European type of
economy."  Again came a momentary hush, and then Tory M.P.s broke
into cheers at this flash of their leader's steel knuckles.

But hardly had Thatcher faced down her parliamentary opponents
than she was confronted by successive challenges on the
industrial front. The leader of the gigantic Trades Union
Congress and the Confederation of British Industry both lodged
urgent demands that she act promptly to reflate the economy or
"there'll be nothing left to revive," as one unionist put it.
Word came of an impending collision between the government and
union representing 32,000 waterworks employees, who had just
turned down a proposed 10% pay boost. The chief union
negotiator for 583,000 civil service workers furiously rejected
a 6% pay raise offered by Thatcher's government bargainers.
Said he:  "I told them to get stuffed."  Through it all, the
Prime Minister stood fast last week. In a TV appearance from
No. 10 Downing Street, she had scoffed at past governments that
"have taken fright and cut and run" when the going got tough.
Said she:  "If I could only get this message over; I will not
stagger from expedient to expedient."

Few other Britons were quite as unruffled. The country has
been stumbling ever deeper into the throes of its worst
recession since the 1930s. Unemployment has climbed to its
highest mark since the Great Depression:  2.4 million jobless,
or 10% of the work force, and the grim predictions are that it
could reach a watershed mark of 3 million before the end of the
year. As the lines of the jobless have lengthened, businessmen
as well as trade unionists have despaired. Interest rates have
hit unprecedented levels, as high as 22% for an ordinary
consumer. Even the strength of the British pound, a sturdy
$2.35 because of the North Sea oil bonanza, has not been a
total blessing; it has hampered exports by raising the prices
of British goods abroad.

On the political front, the country is being sharply polarized
between the diehard right, represented by Thatcher's hair-shirt
conservatism, and the increasingly strident demands for a
"socialist transformation" issuing from the far-left ranks of
the Labor Party. The opposition party itself has all but split
asunder as a result of a ferocious internal struggle between its
own right and left wings. Late last month Labor changed its
rules for selection of its leader--a potential Prime
Minister--giving much more power to the unions, with their huge
bloc votes, and the left-leaning local committees. The action
provoked the virtual defection of the leading members of Labor's
right wing, which in turn could substantially alter the entire
British political scene. An increasingly leftist-oriented Labor
Party presents the potential for far-reaching national and
international changes:  a Britain bolting from the European
Community, for instance, or the alteration of all NATO strategy
if a Labor government should make good on its professed policy
of unilateral disarmament and "sending the nukes back to
Washington."  Summing up the uncertainties felt by many Britons,
Guardian Columnist Peter Jenkins observed:  "We have all moved
into unknown territory, and there is not clear vision of what
the future will resemble."

At the heart of this political turmoil is the prime ministership
of Margaret Thatcher, the Joan of Archconservatism. Does she
have a clear vision of the future?  Britons were asking. Is she
leading the country out of the wilderness, or into it?  The
final verdict is not in, but the British public harbors
considerable disillusionment with how she has fared to date.
In recent weeks, the polls have shown her conservative party as
much as 13 points behind Labor; the Prime Minister herself was
given a mere 31% approval rating. No angry mobs were taking to
the streets, no pitchfork militant was yet daubing
down-with-the-rich slogans on the windshield of the nearest
industrial executive's Rolls-Royce. Indeed, protest
demonstrations by the unemployed were limited, and peaceable.
As workers feared for their jobs, in fact, the number of
strikes and other labor stoppages fell to a 40-year low. But
there was no mistaking the public anxiety. With Britain at an
economic and political crossroads, Thatcher's government is
facing its severest time of testing.

Americans will be scrutinizing Thatcher with particular
attention when she visits Washington later this month, because
she is considered the political pioneer in the application of
the frugal, budget-cutting policies that the new Reagan
Administration itself would like to try out on the U.S. economy.
It is no accident that she and Reagan are often regarded as
ideological soul mates. Former Republican National Chairman
Bill Brock, who went to Britain for a look at the Thatcher
campaign in 1979, was so impressed that he brought video tapes
of Tory broadcasts back to the U.S. as models for his G.O.P.
campaign strategists. To Britons, the Reagan campaign was a
distant echo of Thatcher's, and when he delivered his Inaugural
Address last month, they heard themes, even phrases, that have
become familiar litanies of Thatcher's government.
Understandably, Thatcher expects to get on well with Reagan when
she arrives at the White House as the first NATO leader to call
on the new President. Says she:  "We share the view that
democracy works best when government doesn't take over too
much."

Even with their similar perspectives, there may be marked
differences in approach and degree. Thatcher, a self-styled
"conviction politician," obdurately refuses to veer from the
course she has set for her government. Her British critics,
many of them in her own party, including former Tory Prime
Minister Edward Heath, are sounding transatlantic alarms and
warning Reagan not to follow Thatcher's economic course. One
of Thatcher's own Cabinet ministers has expressed second
thoughts. Said he:  "If we have any advice to give to President
Reagan, it is, 'Don't pack your first budget with too many
campaign promises.'"

Hard-edged and superconfident, Thatcher swept into office 21
months ago with a handsome 43-seat parliamentary majority from
an electorate that had soured on the Labor government of James
Callaghan and was fed up with Britain's intractable unions in
the bitter winter of 1979. Labor's image as the only party
capable of dealing with the powerful trade unions was sorely
damaged when strikes and industrial strife spread across the
country. Touting the "monetarist" theories of Milton Friedman,
the conservative American economist, Thatcher won big with
pledges to cut government spending, reduce income taxes,
revitalize industry and create a new climate for business. With
a survival-of-the-fittest philosophy, she warned that outdated,
unprofitable industries would be allowed to die--but for the
sake of new and vital ones. She promised Britons that she would
get government off their backs and give them freedom to make
their own choices. She called for a renewal of the British
spirit she had known as a girl growing up over her father's
grocery store in her Lincolnshire birthplace of Grantham.

In the international arena, she pledged to strengthen Britain's
military defense and stand up to the Russians. Actually, her
first successes were scored in foreign policy. She attacked her
European Community colleagues over the inequity of Britain's
$2.5 billion share of the E.C. budget, and ultimately succeeded
in getting it pared by two-thirds. In the summer of 1979, she
traveled to southern Africa and, under the tutelage of her able
Foreign Secretary, Lord Carrington, changed her position and
cleared the way for peace negotiations that ultimately
transformed Britain's former colony of Rhodesia into independent
Zimbabwe. She was the most outspoken backer of President
Carter's hard line against the Soviets following their invasion
of Afghanistan and his efforts to boycott the Olympics.

Her highest priority, however, was economic--specifically to
"wring inflation out of the economy."  She warned candidly,
"Things will get worse before they get better," a prediction
that proved accurate in the extreme. She stressed that, above
all, if the government practiced discipline and the Friedman
doctrine of strict control of the money supply. Britain could
recapture its old place "in the first division among nations."
In her initial budget, she promptly cut income taxes; from 83%
to 60% for those earning more than $50,000, and from 33% to 30%
for those below. To replace the $9.5 billion in lost revenues,
she raised the value-added tax (VAT), a levy on all but barest
essentials, to an across-the-board 15%. Public spending in the
areas of foreign aid, education, housing and municipal services
was cut; housing alone was reduced $3.5 billion.

Thatcher had one resource that was helping ease the nation's
financial burden:  the North Sea oilfields. They were to make
Britain self-sufficient in petroleum by the end of Thatcher's
first 18 months in office. Typically, Thatcher refused to
distribute the oil at cut rates to British industry, British
consumers had to pay the full market price.

But, inexorably, the recession affecting the whole
industrialized West came to be felt more and more painfully, and
in Britain the promised Thatcher recovery did not begin. By
last autumn, the public mood had turned sour. When the poor
year-end statistics were made public, Thatcher was being
pilloried for what Labor's Denis Healey, former Chancellor of
the Exchequer, called her "punk monetarism."  Said Eric Varley,
Labor's spokesman on employment matters:  "The consequences of
this doctrinaire obsession are still wreaking havoc in every
part of the country."  Thatcher's own Industry Secretary, Sir
Keith Joseph, glumly admitted that his government "lost the
first year," and the Economist magazine, which had supported
Thatcher's election, characterized her economic experiment as
"a prescription for electoral suicide."

Britain's economic condition is indeed worse in virtually every
respect than when Thatcher took office. At the outset, she had
said it would take 18 months to two years for results to show,
but that time-table is nearly up and the turnaround is nowhere
in sight. Inflation, 10% when the conservatives came in, is now
15%, though that is a considerable improvement from a high of
22% last summer. The gross national product has fallen from
1.5% growth in 1978-79 to a negative 3% for 1979-80. Some
10,000 businesses went bankrupt, a record. Unemployment climbed
by a phenomenal 66% in 1980--and 86% since Thatcher took office.
In the manufacturing regions of the north, 14.8% of the male
work force is jobless. Meanwhile, the government has been
unable either to control the money supply or control public
spending, the two keystones of its monetarist policy. The
budgetary deficit for fiscal 1980-81 was first forecast at $20
billion. Now government sources expect the deficit to exceed
$30 billion, an increase of $7 billion over last year's deficit.
To compensate, Thatcher and her Cabinet are now talking about
imposing new taxes. Ironically, it is the private sector--the
area of her prime concern and source of her strongest support
in the last election--that is suffering the most.

What went wrong?  In initiating Milton Friedman's theories.
Thatcher seems to have discovered a catch-22. Push interest
rates to a record high, which she did, and it is private
enterprise and individuals who have to curtail investment and
spending. Force noncompetitive businesses to wring out their
slack and unemployment rises. As workers "go on the dole," the
nation's welfare costs rise dramatically.

Thus total public spending tended to go up instead of down.
Just as welfare costs rose, so did government subsidies to
public-sector industries. Some of the proposals advanced by
Thatcher simply proved unrealistic, like her plan to cut
government financing for such ailing nationalized industries as
British Steel, British Airways and British Leyland, the
automaker. To have allowed the companies to collapse would have
meant a million new unemployed, including tens of thousands of
jobs in supplier companies. Explained Deputy Prime Minister
William Whitelaw:  "In the real world, you cannot destroy your
steel industry and remain an industrial power of any standing."

Friedman, a research fellow at California's Hoover Institution,
refuses to acknowledge that his theories are to blame for
Thatcher's troubles. Calling the Prime Minister "a remarkable
woman," he says that "unfortunately, actual practice has not
conformed to policy." Monetary growth increased rather than
declined, he points out. (At 22.5%, it is more than double the
target of 7% to 11%.)  He criticizes Thatcher's decision to go
along with a campaign promise to raise civil service salaries
by 28%, so that they would approach salaries in the private
sector. Says Friedman:  "That shot into a cocked hat the hope
of cutting down government spending."  He also thinks it was a
mistake to decrease upper-bracket income taxes while increasing
the value-added tax, which could only add to inflation.

Thatcher admits that things have not gone well and looks to
more difficulties ahead. "It will be another hard year," she
told a recent Tory conference, "but I believe that if the
government sticks--as it will--to its determination to get
inflation out of the economy, and if the pay settlements this
winter are reasonable, there is real hope that a year from now
things will be looking distinctly brighter." referring to the
pressure for a policy U-turn, she says, "This lady's not for
turning."

Confrontation, in fact, is her metier, and even to day-to-day
combat in the highly charged arena at the House of Commons
stimulates her. Recently she confessed:  "The adrenaline flows.
They really come out fighting at me, and I fight back. I stand
there and I know. 'Now come on, Maggie, you are wholly on your
own. No one can help you.' And I love it."  Virtually every
demand of public office seems to agree with her. Thatcher
looks, if anything, more youthful than when she moved into
Downing Street. There is little relaxation in her regimen. Her
staff is awed by her "terrific appetite for work and her energy
level." Her voice gets husky after particularly heavy weeks, but
she rarely seems tired. Five hours of sleep are enough, she
insists. She rises about 6:30 a.m., listens to radio news,
prepares breakfast--coffee, toast and fruit--for herself and her
husband of 29 years, Denis Thatcher, 65, a semiretired business
executive. Their 27-year-old twins are off on their own:  Carol
is a journalist in Australia; Mark, a racing driver whose
avocation and political gaffes have sometimes been cause for
concern.

On a typical day. Thatcher walks down one flight of stairs to
the Prime Minister's study around 9 for an early appointments.
Twice a week, her hairdresser will have already come and gone
by then, maintaining the new darker shade of blond she has
adopted on the recommendation of an image consultant. Lunch,
if not official, is likely to be a salad brought in by her
secretary. Dinner is regularly taken at the House of Commons
with backbenchers, a habit that builds political capital. It
also saves cooking:  the Thatchers have no regular cook. After
dinner she may have guests for drinks in the family quarters or
settle down to several hours of paperwork. Says an aide:  "Hers
is a no-nonsense, no-fuss life."

The Thatcher style of leadership "has mellowed a bit," says one
Cabinet minister with whom she often disagrees sharply.
However, she still tends to dominate discussions among her inner
circle, and Cabinet ministers, particularly those who do not
share her views, grouse about her overlong lectures and lack of
humor. She does display a thoughtfulness about personal
situations and an unaffected directness in talking with "little
people."  On the same day that she has purposely discomfited a
minister, she will stop and have a cup of tea with the Downing
Street switchboard operators. At a recent Tory conference, a
15-year-old lad made a speech that was a great success. When he
was brought to meet the Prime Minister, she first asked if he had
called his mother to tell her how the speech went. When he said
no, she fished out a ten-pence coin from her purse and sent him
to a telephone.

At the same time, Thatcher is accused of having no real
compassion for the public at large. Critics claim the 2.4
million unemployed seem to be statistics to her, rather than
individuals. When an interviewer recently pressed her about a
seeming lack of sympathy. Thatcher replied sharply. "It's like
a nurse looking after an ill patient. Which is the better
nurse--the one who smothers the patient with sympathy and says,
'Never mind, dear, just lie back. I'll look after you.'  Or the
one who says, 'Now, come on. Shake out of it. I know you had
an operation yesterday. It's time you put your feet to the
ground and took a few steps.'  Which do you think is the better
nurse?"

That sort of unbending self-reliance, when applied to monetarism
at the expense of political considerations, has caused deep
anxiety among many Tory M.P.s who have to suffer the brunt of
their constituents' discontent over unemployment, bankruptcies
and shuttered businesses. Indeed, there is already speculation
about Thatcher's political survival if economic conditions show
no signs of improvement by next year. Labor M.P. Phillip
Whitehead cites a British political rule of thumb:  "The Labor
Party always talks about getting rid of its leaders, but never
does it."  How could a coup against a leader with a 43-seat
majority be brought off?  One senior minister sketches a simple
scenario:  "If, after another year to 15 months, there are no
signs of an upturn in the economy and a reduction in
unemployment. I would expect a Cabinet consensus to force a
change of policy. If Thatcher agreed, there need not be any
change, except in policy. If she disagreed, it would go to a
vote in the Cabinet, and if she were defeated, she would have
to go."  In such an event, adds the minister, the Tories "would
have no alternative but to spend their way out of the crisis,
which could split the Conservatives and possibly bring in
Labor."

Across the land, unemployment has spawned some demonstrations;
50,000 workers turned out in bitter cold for a Labor "Day of
Protest" on the gray and eerily lifeless docks of Liverpool.
But there are as yet no serious signs that the social fabric
cannot stretch with the strain. In the 1960s, British social
scientists believed there would be riots in the streets if only
a million people were out of work. Now workingmen sip their pint
of lager in the pubs and union clubs and calmly discuss the
bleak prospect of 3 million jobless. "People are bitter, but
they're adapting so far," says Bruce George, a Labor M.P. from
a constituency north of Birmingham where unemployment has
doubled. "The one thing we haven't seen, thank God, is a major
racial explosion. The easiest people to blame would be the
immigrants."

At Johnson's Cafe, a wooden shack across the road from the main
gate of British Leyland's Austin-Morris plant near Oxford, where
workers can get a sausage, egg and chips lunch for 39 pence (92
cents), everyone agrees that times are rough. But the young
tend to disagree with the old about where the fault lies. One
maintenance worker, who approves of Thatcher's economic policy,
insists that "the trouble with this country is the unions have
got too much power."  An assembly-line worker who has been at
the plant for 25 years, and remembers the depression, fumes:
"We haven't got a government, not as far as the working class
is concerned!"  In Manchester, proud birthplace of the
Industrial Revolution and once the most dynamic manufacturing
center in the world, unemployment has doubled in a year, from
20,000 to an estimated 40,000. The city is ringed with plant
after plant full of outdated machinery, operated by sharply
curtailed work forces. Says Norman Morris, the leader of
Manchester's city council:  "Nearly all of our industry is
suffering now. This area has tremendous potential, enormous
expertise and a great desire to push across new frontiers.
What's lacking is the capital."

At the labor exchange a few blocks from city hall, Frederick
Holt, 64, emerges jubilant because he has just found a ten-day
job as a census taker. Unemployed for a year, Holt is
pessimistic. "All I can see is unemployment going up to 4
million by 1985. What's going to happen to this great country?"
Another casualty of the crisis is William Sykes, 41, who was
a skilled metalworker and shop steward for an engineering firm
in Manchester that makes industrial gears. The plant was forced
to lay off more than two-thirds its work force in the past three
months. Early in December, Sykes, who had been with the firm
almost 27 years, got a letter saying he had been "selected for
redundancy."  Then, he recalls, "I got another letter next day
saying, 'Finish up at four o'clock.'  And that was it. "He was
handed a slip of paper as he left, noting his severance pay:
a lump sum of $9,750 to tide him over until he became eligible
for unemployment compensation in twelve weeks. Married with one
child, he can then collect $82.37 a week. Trying to calculate
how he will manage mortgage payments, he shook his head
morosely, "It's been a big jolt, what's happened."

The main reason for the relatively stoical mood with which
Britons are taking the country's economic troubles is the
elaborate social security system. A complicated infrastructure
of welfare benefits, instituted by Clement Attlee's Labor
government in 1945, cushions most families from real hunger or
homelessness. In addition to severance pay and unemployment
benefits, most workers with children are entitled to an income
tax rebate, a rent rebate on public housing, and free milk and
lunches at school.

However, Historian Asa Briggs, provost of Worcester College,
Oxford, warns that "just because people are quiet now does not
mean there will not be all-out trouble in the future."  Lord
Briggs believes that the era of rising expectations, in which
the standard of living was expected to improve every year, is
over, and the realization of this could lead to a leftist
backlash. Says he:  "Politics is all about being a little
better off. If you can't have that, people may go in for wilder
objectives like a real redistribution of income."

To judge from the increase in the Labor Party's popularity in
the polls, some of the backlash may be under way. What better
issue is there than hard times for a party that has
traditionally been the champion of the worker?  But Labor,
caught in the throes of the worst internal split in its 80-year
history, is hardly in a position to exploit it. Labor, in fact,
seems in mortal danger of committing political suicide. On the
one side is a noisy, growing claque of radical leftists, given
to raising clenched fists and shouting Trotskyite slogans, who
are maneuvering to capture the levers of party power. On the
other is a handful of rising and ambitious M.P.s, accustomed to
the prerogatives of Westminster corridors, who are threatening
to bolt Labor and form a new centrist party.

These ideological divisions in the Labor Party are not new, but
in the past the two sides have managed to coexist in dynamic
tandem. The party's center-right dominated the real sources of
power, the Commons and the Cabinet, where national policies are
forged. The left, galvanized by the brilliant oratory of the
late Aneurin Bevan, pursued its socialist goals through the
giant trade unions. But the new left is no longer content with
a passive role. When Callaghan resigned as Labor Party leader
last fall, the left began to move in earnest to bring in one of
its own. To stave off a party split in the fight for
leadership, the M.P.s chose Michael Foot, 67, an amiable,
cultivated libertarian socialist in the old mode, with a
reputation as a peacemaker.

The party had also adopted what to its right wing were two
impossible positions:  withdrawal of Britain from the European
Community and a call for unilateral nuclear disarmament.
Although he has long favored both positions, Foot sought to
reassure the dissidents and pleaded with them to stay in the
Labor fold. But then came a special one-day party conference
in the London suburb of Wembley late last month to consider a
rules change for choosing a party leader in the future. In the
past, the party's mostly moderate members of Parliament held the
exclusive right to choose the party leader. At the urging of
the left, the party established an electoral college in which
the combined power of the unions and the leftist constituency
committees could outvote the establishment M.P.s.

Within hours, the right-wingers announced the formation of a
new "Council for Social Democracy" as a prelude to forming a new
political party. A trio of former Cabinet ministers, Shirley
Williams, David Owen and William Rodgers--immediately dubbed
"The Gang of Three"--were quickly joined by a fourth:  former
Deputy Party Leader Roy Jenkins, back from four years as
president of the European Commission. They have appealed to
other Laborites to join them. The acrimony between victorious
leftists and the rightists was demonstrated at the next meeting
of the national executive committee. Foot wheeled on Williams,
"You had better make your mind up--if you want to join another
party, it is quite intolerable that you should sit here." Tony
Benn, the suave standardbearer of the radical left, was even
more virulent. He shouted at Williams:  "If you are plotting
to form a new party, you cannot sit here in the highest councils
of Labor with all access to party documents available to you!"

The party split, if it comes finally and formally to that, would
not cleave the party down the middle but break off and
influential splinter, make up mostly of "Oxbridge" (Oxford and
Cambridge) educated, middle-class M.P.s. Tweaking their
somewhat elitist image, the Guardian ran a cartoon about the
hypothetical problem the dissidents would have when they met to
choose a leader:  "...They could always have a wine-tasting
competition."  Last week five moderate trade unions joined to
declare they would fight to overturn the rules change at the
next party conference. Deputy Party Leader Denis Healey,
borrowing a phrase from Hugh Gaitskell's fight against the left
in 1961, vowed to "fight, fight and fight again."

Meanwhile, Liberal Party Leader David Steel, the most popular
such figure in the country at the moment, with a 63% approval
rating, told the disaffected Laborites to "stop dithering" and
form a new party. The Liberals, who have never held power,
usually poll between 14% and 18% in general elections. Steel
is eager to cooperate in an alliance with a potential Social
Democratic party that could bring his own group into a bona fide
governing coalition. Several new polls indicated that such a
centrist alliance could win 38% to 40 % of the vote, and even
some disenchanted Tories talked of signing on. But few
political analysts believed any such alliance could score
heavily against the long-standing organizations of the
conservatives and Labor when the next election comes some time
before the spring of 1984. Says University of London Professor
Esmond Wright:  "The alliance hasn't a cat's chance, and that's
a pity, because that's where the country is."

Many British intellectuals see this as a pivotal moment in the
country's political history. Certainly, the influence of the
new left, both inside and outside the Labor Party, is being
strongly felt. The universities are full of noisy protesters.
"A pacifist is a chap shouting at you when you're trying to
speak," sighs an official spokesman on nuclear weapons policy.
An antinuclear lobby is growing larger and more vocal as
bearded young militants in duffel coats and girls with CND
(Campaign for Nuclear Disarmament) pins over their hearts
express hostility to having U.S. bases in Britain, which would
commit the country to war in a nuclear exchange. They also
often oppose NATO as a capitalist prop. This upsurge of
pacifism with an anti-American edge might have been expected in
the twilight of the Viet Nam War, but why now, when America's
reputation under Jimmy Carter has been that of a weak superpower
with a strong human rights policy?

One reason, believes Christoph Bertram, the director of the
International Institute for Strategic Studies, is simply
frustration over the economy. Says Bertram:  "When the
government has finished administering its bitter
medicine--whether it works or not--this will be a different
country. My fear is that it's going to be a country that is
more anti-American, more anti-European, more insular." Bertram
contends that left-wing moralism and pacifism have traditionally
played a role in British politics. But now "moralism has
combined with the fear that nuclear weapons might actually be
used. This has tended to blur the distinction, so vital for
the nuclear age, between deterrence and actual warfare.

Certainly the economic crisis has driven home the realization
that Britain is going to have to make some hard choices about
its defense commitments. M.P. Bruce George, a member of the
Commons Select Committee on Defense, says there is no way
Britain can meet its varied defense commitments and pay for the
proposed $12 billion Trident missile program, which would allow
Britain to maintain an independent nuclear deterrent through the
end of the century. Thatcher's position on Trident is clear:
she will not cancel it. Nonetheless, her government is facing
severe budgetary problems in maintaining a defense spending
program that represents just over 5% of its G.N.P. As the
economic crisis intensifies, so will the debate over defense--
and the country's priorities.

North Sea oil has bought Britain some precious time in which to
put its economic house in order. It is Thatcher's ambition--and
almost religious determination--to seize this unique moment to
transform Britain's economy in order that it may survive over
the long term, with or without oil. Until now, she has
concentrated on the radical surgery of cutting away  the
deadwood of ailing industries. But the signs are that, like the
stern nurse she is fond of quoting, she soon will have to turn
her attention to getting the sick patient back on its feet, to
move from surgery to rehabilitation.

Her conservative government, with its big majority, seems
safely ensconced until 1984, in part because Labor has not been
able to mobilize a following that can truly bring it down before
then. Michael Foot talks of legions of Britons taking to the
streets in outrage, determined to topple the "criminal" Thatcher
government. But instead his own party is tearing itself
asunder, giving Thatcher a golden year virtually free of serious
political fears. It may just be the piece of luck she needs to
get through this perilous period in which she is struggling to
bring her monetarist equation into balance. If she fails, she
will have to alter course sharply or bow out. If she succeeds,
she will have administered much-needed therapy to the Britain
she believes in--and she will have written quite a chapter for
the political textbooks.