For a country to have its currency marked down against the Zimbabwean dollar is not generally a good sign. But that is what has been happening to Britain this year. And it got worse in the immediate aftermath of an early March opinion poll showing that the governing Labour party had pulled to within 2 percentage points of the Conservatives. For quite a while now, there’s been a widespread assumption—backed by opinion polls, local election results, the 2009 vote for the EU parliament, and the feeling that enough was enough—that the Tories after 13 years out of power would win a decent majority in the general election due no later than June.
That wasn’t unreasonable. The U.K. has been wrecked by Labour. For Britons to give Gordon Brown a new term would be about as sensible as Pharaoh inviting the locusts back for another snack. The Conservatives meanwhile had been given a fresh lick of paint by David Cameron, the young (43), loudly modernizing politician who took over the Tory leadership in 2005. They were revived. They were ready. What could go wrong?
Well, Cameron suddenly has a shot at being Britain’s Thomas Dewey. That March poll was just the most dramatic of a series showing that the robust Tory lead of last year—usually well into double digits—had dwindled to a toss-up. Thanks to the peculiarities of the U.K.’s electoral system, the Conservatives need to be around 10 points ahead of Labour to achieve the sort of parliamentary majority that they will need if they are to form a workable government. Not only would a 2-point lead not do the trick, it would actually result in Labour being the largest party in the House of Commons and, almost certainly, holding onto power.
The most common expectation of the chattering classes is now of a “hung parliament” in which the Conservatives would win the most seats, but fall short of an absolute majority. They still might be able to form a minority government, but it would be a weak, fragile thing, and in no position to do what needs to be done to restore Britain’s battered finances. The uncertainty that this would bring may spook the markets even more than a clear Labour win. A reelected Labour government ought at least to have the authority needed to tackle a budget deficit that threatens to set the bailiffs on Blighty. It might even use it.
But if international investors were alarmed by the turn in the polls, they were equally bewildered. To outsiders, not least in the United States, the thought that Gordon Brown could be allowed to continue in office beggars belief. That he might highlights just how much the reality of British politics differs from the fond Atlanticist myth. That reality is the reason David Cameron, new Tory, has done what he has done. It’s the reason he may yet fail.
The roots of America’s attachment to the free market and to individual liberty may be traced back to the sceptr’d isle, but the Old Country is today a nation of the center-left and has been for over six decades. Class resentment, greater respect for authority, the all too visible failures of British capitalism, and intellectual and physical proximity to the continent, have all helped push the U.K. in a direction very far from Adam Smith’s ideal, a process buttressed by the institutions, habits, and ways of thinking put in place by Labour after its landslide victory in 1945.
Browbeaten by memories of the scale of that defeat, postwar Tory governments preferred to focus their efforts on the more efficient management of the social democratic state rather than its replacement. That began to change with the election of Margaret Thatcher in 1979, but it’s telling how close that happy day came to never dawning.
Bought and paid for by the trade unions and blinkered by ancient leftist ideology, the Labour government of the 1970s presided over soaring inflation, penal taxation, rising unemployment, and endemic industrial disorder. Its crowning humiliation (there are many choices) was the moment it was compelled to go cap-in-hand to the IMF for a bailout in 1976. Despite all this, it might have won reelection had it gone to the polls in 1978—a fact that should make David Cameron shudder. Mercifully, Prime Minister James Callaghan blinked, and the strikebound “winter of discontent” was enough to hand Mrs. Thatcher a solid, if unspectacular win the next year. Her later majorities were far more substantial but, thanks to splits on the left side of the political fence, they were exaggerated by similar electoral dynamics to those that now operate against the Tories. She never won more than the 44 percent of the popular vote she received in 1979 (her narrowest victory in terms of parliamentary seats, incidentally), a showing that may explain why her reforms were more cautious and incremental than hagiographers now like to claim.