The devastating rebuff administered to the Conservative Party by
British voters in May of this year came as no surprise. The party was
tired, publicly split on policy, and scandal-ridden. The voters did
the party a favor by granting it respite from the rigors of office.
But where does it go from here?

Ten years ago Lord Carrington wrote in his memoirs of the advantages
of his time in Australia as governor-general in lending perspective
to his assessment of Britain's true interests. Physical distance
allowed him to see the wood from the trees. His insight can be used
today in analyzing where the Conservatives went wrong. For the future
health of the conservative cause in Britain, it is important that the
party use its downtime well. It must get its post-mortem right.

Viewed from across the Atlantic, there is no mystery about how the
Conservative Party was brought to its knees. This feat was
accomplished by a leader who foisted upon it an untenable, crassly
inconsistent policy based on a mixture of arrogance, ignorance,
self-indulgence, and self-deception. The leader was Margaret
Thatcher. The policy was Euro-rejectionism. The Conservatives have
rid themselves of the former, but the latter lives on in the
parliamentary party. In rejecting as its new leader former Chancellor
of the Exchequer Kenneth Clarke in favor of William Hague, a Thatcher
protégé, the party has shown that it is now dominated by those who
believe that the only significant events in European history are the
battles of Agincourt, Trafalgar, and Waterloo. This is not an
electable party. If it is to regain the voters' confidence, it must
purge itself of Thatcher's Euro-rejectionist incubus.

This thesis may require a little elaboration, but in fact the
argument is straightforward. Compare the following quotations:

We must create the genuine common market in goods and services which
is envisaged in the Treaty of Rome and will be crucial to our ability
to meet the U.S. and Japanese technological challenge.

We have not successfully rolled back the frontiers of the state in
Britain only to see them re-imposed at the European level with a
European superstate exercising a new dominance from Brussels.

The second is well known. Taken from the then-Prime Minister
Thatcher's famous October 1988 speech to the College of Europe in
Bruges, this represents her at the flood tide of her anti-federalist
Euro-rejectionism. It is quoted with relish in her autobiography The
Downing Street Years to illustrate her point that, in her own
delicate phraseology, "I had had as much of the European 'ideal' as I
could take."

The authorship of the first quotation seems more problematic. Its
communautaire orthodoxy is reminiscent of an arch-federalist
Brussels-based fonctionnaire who has "slipped his leash" (this phrase
too belongs to Thatcher, used in reference to Jacques Delors,
then-president of the European Commission), and who is scheming to
foist his Napoleonic centralism on the unsuspecting Anglo-Saxons. But
not so. Once again the speaker is Margaret Thatcher, on this occasion
at the Fontainebleau European Summit of June 1984. She adopted this
stance to show her European credentials, following the bruising
decade-long debate about British financial contributions to Europe.
In doing so, she launched the integrationist process that led to the
Single European Act of 1985 and, by easily foreseeable extension, to
the Maastricht Treaty of 1992 and to European Monetary Union.

Unsurprisingly, the 1984 speech receives no mention in Lady
Thatcher's writings--or in those of her hagiographers. And when
history confronts her with inconvenient facts, such as her first
House of Commons speech as Tory leader in 1975 in which she robustly
defended British EU membership, or her campaign in the same year for
a positive vote on Harold Wilson's referendum over whether Britain
should continue in Europe, she makes light of them by saying that
these were Edward Heath's legacy.

To have admitted these facts would, of course, have exposed the fatal
implausibility underlying Thatcher's European policy: namely that,
rather than having to make the best of the relationship with Europe,
Britain's leaders enjoyed the option of pursuing a non-EU-based
alternative choice. As a rational person, Thatcher knew that this was
the stuff of dreams and carefully avoided explicitly suggesting that
Britain should leave Europe. However, anyone who saw her stiffen with
misty pride whenever Old Glory was on display understood that, had it
been available, Thatcher would have jumped at some kind of
condominium pact with what she quaintly called the "new Europe across
the Atlantic."

The manifest unworkability of this vision destroyed British influence
in Europe. For the nation, the fruit was bitter: either British
defeat or British opt-out. For the Prime Minister personally, the
consequence was to strip away the aura of the Falklands victory and
"Iron Lady" invincibility and to reveal her, in Geoffrey Howe's 1990
image, as a captain deliberately sabotaging her own team. When her
own credibility was destroyed, so was that of the Conservative Party.

This foreign policy blunder was bad enough. But the fact that after
her 1990 dismissal as party leader she waded ever more deeply into it
compounded the problem. Where she should have helped John Major
pursue hard-nosed calculation about how best to defend Britain's
national interests in Europe, she indulged in romantic mythologizing
about keeping the down-to-earth values of the Glorious Revolution
safe from the utopian dreams of Europe's Jacobin intellectuals.

This clap-trap had two disastrous results. First, it opened a fissure
in the Tory party so deep that in 1997 cabinet members were openly
attacking each other on the hustings. Secondly, it destroyed public
confidence in the Tories' ability to handle Britain's central foreign
policy task. Torn apart by Thatcher's European folly, the Tories
encountered a defeat that may deprive them of office for a generation.

The absurd part of this Euro-bashing myth is that it was wholly
meretricious and self-serving. It was designed (and is maintained
today) to disguise the fact that--apart from the anti-EU extremism of
her latter years as prime minister and in retirement--Thatcher
occupied a respectable place in the mainstream of British leadership
opinion about Europe. Specifically, her outlook differed little from
that of Harold Macmillan or Harold Wilson. Neither of these earlier
prime ministers warmed to the idea of Europe. Macmillan in particular
scorned the Six's first faltering steps. But both were converted to
British membership through lack of an alternative, and both knew
that, once in, Britain would often have to fight for her rights. Even
Heath, by far the most pro-Europe of the Conservative prime ministers
who negotiated Britain's accession, had no illusions about the sort
of battles Britain would have to wage to defend her prerogatives. At
his insistence, the accession document of 1972 contained specific
language on this question.

This typically British approach was Thatcher's initial position.
Indeed, she may have been somewhat more pro-Europe than average. From
her first days in Parliament, she was a member of the European Union
of Women, a pro-Europe advocacy group. She has recorded in her Road
to Power that she was "wholeheartedly in favor of Britain's entry
into the Common Market." In common with all her contemporaries, her
reasoning revolved around trade and economics. This allowed her, as a
member of Heath's cabinet at the time of the accession negotiations,
to disregard Enoch Powell's warnings about potential European
encroachment on British sovereignty as merely "technical." Later this
same reasoning prompted her to go forward with the 1985 Single
European Act that laid the foundation for the modern EU.

Had she stayed with this reasoning all might have been well. Her
critics, even those like Geoffrey Howe and Douglas Hurd who are most
contemptuous of her boorish antics, have conceded that many of her
positions made sense. Her dogged demands in 1979-84 for a reduction
in Britain's budgetary payments to Europe, for example, brought home
to her European colleagues that centralized overspending could not
continue. Her emphasis on local responsibility established the
now-sacrosanct principle of "subsidiarity" in the European
decision-making process, whereby decisions are devolved down to the
lowest possible level.

These accomplishments were considerable. But they were not enough for
Thatcher. Deriving a sense of Anglo-Saxon superiority from her
redoubtable Falklands victory, she began to wallow in the sentiment
that the European structures were "quintessentially UN-English."
(Whether this also means UN-Welsh, UN-Scots, and UN-Irish will
necessarily be left to the imagination, for unfortunately there are
now no Conservative Members of Parliament from these countries to
enlighten us.)

The sentiment that, in terms of culture, the EU was irredeemably
alien led Thatcher into dangerous waters. Not only did it convince
her that saying "No, No, No" amounted to a sufficient European
policy, but it also pushed her off her original (mainstream) position
of defending British interests from within the EU. This was the
position she had advanced with considerable tactical finesse at the
1988 Brussels European Council, where she traded concessions on
structural funds in return for a long-term guarantee of Britain's
budgetary rebate.

She now deserted that position. In her heart she began to question
the very principles on which the EU was based. "Were British
democracy and our traditional sense of fairness", she records herself
as asking, "to be subordinated to the demands of a remote European
bureaucracy resting on very different traditions?" She began to act
as though she were the first person to discover that there was a
potential conflict between British EU membership and British
sovereignty.

The logical conclusion of this position, of course, went way beyond
skepticism. It was that Britain had no place in the EU. Though she
did not dare say so explicitly, Thatcher was now intimating to the
British that they should contemplate leaving the EU. Nationalist
statements on these lines started to appear in the British press. "Up
yours, Delors" ran a famous headline in a British tabloid.

Amusing though this knock-about act was, it also represented the
point at which Thatcher lost contact with broad public opinion and
thus launched her party on its nose-dive. The poll data should have
made this obvious to her. Starting from the 1975 referendum, British
voters--whether in real votes or in opinion polls--have almost always
rejected the idea of withdrawal, usually by significant majorities.
The 1975 referendum went 67-33 against withdrawal. This pattern was
the rule throughout the Thatcher years. Whereas at the height of the
1980 budgetary crisis opinion split 26-65 against continued
membership, this attitude was not sustained. By 1991 opinion had
reversed itself, and despite eleven years of Thatcher's Euro-bashing,
opinion ran 62-28 in favor of continued membership. These numbers
have now narrowed, but 1997 polls still show support for outright
withdrawal at under 20 percent. The risible showing of the rabidly
anti-EU Referendum Party in the May election reinforces the point.

None of this means that the British are enthusiastic about the EU--as
their answers to specific questions make clear. On monetary union,
for example, or the powers of the European Parliament, the British,
including the committedly pro-EU Liberal Democrats, betray a fair
degree of suspicion toward EU institutions. But this does not imply
that the British came (or come) anywhere near to accepting Thatcher's
implied line that they are better out than in.

Over the years the British have significantly changed their views on
their national priorities. In 1969 they ranked the United States and
the Commonwealth comfortably ahead of Europe as "most important to
Britain." By 1993, Europe outranked the Commonwealth and the United
States by factors of three and four, respectively. Even in today's
climate of EU gloom, Europe is ranked in first place by twice as many
people as the Commonwealth andthe United States. They may not find
the EU warm and cuddly, but they have a clear notion of their
national interest.

As Thatcher's anti-EU fanaticism caused her to stray ever further
from that notion, her downfall became merely a matter of time. In
1989 the Conservatives suffered a significant set-back in the
elections for the European Parliament. When Britain's EU isolation
became plain to see at successive meetings of the European Council in
Dublin and Rome, the time for action had come. Howe's devastating
House of Commons speech of November 13 of that year, in which he
accused Thatcher of presenting the country with a "false antithesis,
a bogus dilemma" on EU matters, launched the Tory leadership contest
that was eventually won by Major.

Thatcher learnt nothing from her rejection. Instead, she went onto
the offensive. In her writings and speeches, particularly in the
United States, she drew a highly tendentious contrast between the
disintegration of central planning in Eastern Europe and its supposed
reemergence in the EU. In taking this tack, she gave succor to the
least responsible elements in her party. This, in turn, caused Major
to flub his opportunity in 1992 to restore sense to Britain's EU
posture. At that time, fresh from his surprising election victory, he
could have secured parliamentary ratification of the Maastricht
Treaty with a two-thirds majority. His failure to do so had the
effect of delivering the Conservative Party to the
Euro-rejectionists--and to the fratricidal strife that led to the
1997 debacle.

Of course, Thatcherism was and is about more than the EU. Her
achievements on trade union reform, privatization, and the assertion
of liberty will outlive her EU mistakes. Nonetheless, her perversity
in this area has a long reach. It precipitated the first major crisis
in Labour policymaking and will ensure that Britain is not among the
first wave of EMU members. This means that, yet again, countries
other than Britain will enjoy first dibs on setting the rules and
habits of an EU institution that in the fullness of time Britain will
undoubtedly need to join.

As the Tories begin their painful process of rebuilding, they need to
ponder the Thatcher legacy dispassionately. A cool head will tell
them that, thanks to Thatcher, they are at present saddled with an
untenable European policy. In effect, this means their domestic
policy is also untenable. With the opinion polls moving against
Europe, they may be tempted to continue along this path, but the
history of Britain's relationship with Europe strongly suggests that
this will be a dead end.

Hague has inherited an unelectable party. The September 15 referendum
on Scottish devolution (with Thatcher's opposition cited by The
Scotsman as one of the reasons for the strong positive vote) showed
that the party has not yet touched rock bottom. The turmoil following
Hague's decision at the October party conference to commit the
Conservatives to opposing Britain's entry into the European Monetary
Union demonstrated that the party's internal divisions run as deep as
ever.

On becoming Labour's leader in July 1994, Tony Blair faced a
similarly dire situation. Having purged his party of its socialist
undesirables, Blair now sits in Downing Street. If Hague really
wishes to oust him, he needs to mete out the same treatment to his
Thatcherite holdovers and diehards. Otherwise, British
conservatism--together with the principles into which, before her
anti-European aberration, Margaret Thatcher breathed so much new
vitality--will join the ranks of the stuffed curiosities in the
Natural History Museum.

John O'Sullivan:

Jonathan Clarke claims that the Tory Party lost the recent election
(and is now unelectable) because Mrs. Thatcher foisted an unpopular
"Euro-rejectionist" policy upon it. Among the difficulties with this
theory are:

Mrs. Thatcher ceased to be Prime Minister seven years before the
election defeat. In the intervening years, she had little or no
influence on government policy. Those who sympathized with her views
on Europe were excluded from ministries which dealt with European
issues. And her speeches critical of the government's European
policy--to which Clarke now attributes an irresistible power--were
widely (and I think unfairly) dismissed as inspired by personal
bitterness at the time. By themselves, these facts should be enough
to demolish Clarke's argument. But there is more.

Those who determined policy for most of this period--namely,
Chancellor Kenneth Clarke, Foreign Secretary Douglas Hurd, and Deputy
Prime Minister Michael Heseltine--were strong supporters of European
integration and the single currency. (Prime Minister John Major can
best be characterized as a weak supporter of the same things.) They
remained in charge of policy until election day. Surely that suggests
some culpability.

Their best way of evading responsibility for defeat would be to argue
that the Cabinet's European policy began to fray in the last two
years of office, and that it disintegrated entirely in the election
campaign. Why did this happen? Very simply: support for "Europe" and
the single currency was increasingly unpopular with Tory MPs, the
Tory party in the country, the general public, and even a majority of
the Cabinet. (You would never guess this, incidentally, from Clarke's
use of opinion polls, which is worthy of Willi Munzenberg. He cites
the 20 percent support for the most extreme anti-European position,
but not the majority opposition to a single currency and to further
European integration.) There was strong pressure for a change in
policy. But Kenneth Clarke and Michael Heseltine vetoed a clear
statement of opposition to a single currency. Tory MPs--facing
certain defeat and knowing from their canvassing that opposition to a
single currency was almost the only popular policy available to the
Tories--panicked and rebelled. Over two hundred Tory candidates
declared themselves personally opposed to the euro. The party
splintered publicly. Insofar as Clarke seeks to excuse John Major and
his colleagues as policymakers from responsibility for the defeat,
however, he condemns them as party managers.

Blaming this on Mrs. Thatcher is not analysis; it is astrology. As an
occasional intellectual valet to the lady, I would be delighted to
attribute the change in opinion to her speeches. Individuals may
indeed have been influenced by them; I hope so. But mass or even
party opinion is no longer swayed by Midlothian orations. The
catalyst for the public was events--such as the European ban on
British beef exports and the Spanish "poaching", sanctioned by the
courts, of British fish stocks. For Tory politicians it was that
"Europe" had gone from being an obstacle to socialism in the
Seventies to being an obstacle to deregulated capitalism today.
Perhaps they are wrong, but many German businessmen seem to agree
with them.

Anyway, "Europe" was only a minor theme in the great symphony of Tory
collapse. There were far more important reasons for it, including an
epidemic of Tory scandals, both sexual and financial, that continued
right up to election day; the loss of the crucial tax issue following
several tax-raising budgets in the Major years; a general weariness
with the same ministerial faces after eighteen years; the rise of an
acceptable opposition party in the form of "New Labour"; and above
all the fact that the Tories had thrown away their reputation as the
party of economic competence and so were unable to benefit
politically from the robust state that the economy had achieved by
1997. They destroyed their economic credentials in 1992 only months
after their election victory; that destruction (or self-destruction)
kept them at unprecedentedly low levels in the polls from then until
now, and it involved something which is mysteriously absent from
Clarke's account: namely, Britain's membership in the Exchange Rate
Mechanism (ERM).

The ERM was the euro of its day. All the clever people in politics,
journalism, academia, the Foreign Office, and the City of London were
in favor of going in, and only Mrs. Thatcher with her allegedly
stubborn anti-Europeanism stood in theway. It took three years of
pressure before Mrs. Thatcher yielded to this consensus of the great
and good--only a few weeks before she lost office. Even then she
qualified her agreement:

" insisted that we enter the wide band--6 per cent on either side...
I made it very clear to John Major [then chancellor of the
exchequer] that if sterling came under pressure, I was not going to
use massive intervention, either pouring in pounds and cutting
interest rates to keep sterling down or raising interest rates to
damaging levels and using precious reserves to keep sterling up. For
me, willingness to realign within the ERM--as other countries had
done--if circumstances warranted it, was the essential condition for
entry (The Downing Street Years)."

Her chancellor, by then her successor as prime minister, did exactly
what she had warned against when sterling came under pressure in the
ERM in 1992. He poured out billions of dollars in reserves and raised
interest rates to a staggering 15 percent in a vain attempt to keep
the pound in the ERM. When the pound was forced out (to the great
benefit of George Soros among others), the central economic plank of
Majorism was destroyed. For Major had fought the 1992 election on the
argument that adhering to the discipline of the ERM was the key to
Britain's economic recovery, explaining away the deep recession it
inflicted on the British economy with the words: "If it isn't
hurting, it isn't working." When Britain left the ERM and the British
economy promptly outdistanced its continental rivals, this exposed
the post-Thatcher Tories as economic incompetents--and worse, as
arrogant economic incompetents because they failed to apologize for
inflicting unnecessary economic distress on bankrupt firms,
mortgage-holders now holding "negative equity", and the unemployed.
The Tories never recovered from the public humiliations of "Black
Wednesday", and hovered around 30 percent in the polls from then
until this year's election. William Hague, the new Tory leader,
finally recognized political necessity this October and apologized to
the British people for the ERM fiasco in his first Tory conference
speech.

Indeed, Clarke is altogether the victim of bad timing. Since he wrote
his anti-Thatcher philippic, Anthony Seldon's biography of John Major
(checked for accuracy by the former Prime Minister) has been
published. And it deals a final coup de grâce to Clarke's thesis.
"Europe", it seems, did damage the Tories, but in exactly the
opposite sense to Clarke's. For the biography reveals that the
chancellor of the exchequer, Norman Lamont, wanted to leave the ERM
on the morning of "Black Wednesday" when speculators attacked. But he
was overruled by Major, who "bowed to pressure from the Cabinet's
pro-European big beasts, Michael Heseltine, Douglas Hurd and Kenneth
Clarke, to go the extra kilometer for the sake of Europe" and raised
interest rates to 15 percent (London Times, October 9, 1997). That
was the first landslip that led eventually to the Labour
avalanche--and it was the result not of "Euro-rejectionism" but of
Euro-fanaticism.

In short, Clarke's argument is utterly fanciful--so remote from the
truth, in fact, that I wondered who he was and where he came from.
Was he perhaps the Cambridge Tory historian, well known for his
mischievous sense of humor? No, that Jonathan Clark lacks a final
"e." Could he be one of those earnest mid-Western Ph.D.s,
specializing in British political history, who are understandably
confused to discover, late in their theses, that Philip Lloyd-Graeme,
Philip Cunliffe-Lister, Viscount Swinton, and the Earl of Swinton are
one and the same chap? Apparently not--his mistakes are not trivial
ones. Clarke, I am told, is a former British diplomat, late of the
Foreign Office. At once, all becomes clear. As an explainer of what
has gone wrong with the Tories, Britain, and British policy towards
Europe, Clarke is, ahem, flawed. But as an explanation he is almost
too perfect.

Ferdinand Mount:

I don't think one can quarrel with the main argument that drives Jonathan
Clarke's essay. In the later years of her prime ministership, Margaret
Thatcher did change from a severe but practical critic of the European
Union's arrangements, especially but not exclusively as they applied
to Britain, into a crusader against the whole idea, from skepticism
in the proper sense of the word to fear and dislike. She would not, I
think, have admitted to this change, preferring like most politicians
to regard her attitude as one of unwavering consistency, but change
there was. It helped to cost her the leadership of her party. And her
supporters' rancor at her unseating helped to destroy the party at
the polls seven years later.

I agree, too, that it would have been quite possible for her to
continue the same robust critique of the European Union's workings in
general, and of any excessive cost to Britain in particular, without
lurching into such passionate xenophobia and paranoia. Even so, I
think the path trod by her and her successor was bound to be stonier
than Clarke allows for.

John Major had an overall majority of only twenty-one, with forty or
more embittered Europhobes behind him who had nothing much to look
forward to except retirement, and who had no particular compunction
about destroying the party's election chances. Of course, he could
have secured a handsome majority for the Maastricht Bill on Second
Reading at any time. In voting on the principle of the Bill, the
opposition parties would always be on their best behavior. But in
Committee, whatever the timing of the Bill, they would lose no
opportunity to savage and humiliate the government. That is what
oppositions do. The same thing happened to Ted Heath with the
original European Communities Bill in October 1971--a majority of 112
on Second Reading, but tiny majorities as low as 4 in the later
stages. In 1971, that didn't really matter so much; the party was
fresh to office (having been elected in June 1970), the backbench
opponents were ill-organized and had little public support. But in
the 1990s, for a party which had already been in power so long, it
was a poisonous running sore. To neglect the parliamentary
arithmetic, as Clarke does, is to ignore the basic reality of British
political life.

I also think Clarke is insufficiently skeptical about European
Monetary Union in general, and more particularly about its
suitability for Britain. EMU does offer real advantages: convenience
to travelers and traders, removal of exchange-rate risk within the
area and, if well managed, long-term monetary stability with
consequent gains for investment and employment.

But it is far from clear that for Britain to join at the outset would
be any more sensible than to be first in the queue for the new
untested model of a motor car. By staying in the negotiations, Major
did not forfeit the advantage Clarke mentions--of having a say in the
arrangements--but he did leave Britain complete flexibility about
whether or when to join. This stance is widely endorsed in Britain,
mostly not for chauvinistic reasons but because our economy is still
so different from those of our partners: in its responsiveness to
interest rate changes, in our structure of housing finance, in the
proportion of our trade that is done in dollars. These questions
worry almost everyone in the British political world--Blair and Brown
and most City bankers and exporters, especially the smaller ones, no
less than Conservative politicians. Wise observers such as Professor
Walter Eltis, Niall Fitzgerald of Unilever, and Martin Taylor of
Barclays have warned of the dangers of joining when our economies are
not properly in sync. Even if the system does not collapse quite soon
after being set up, as Alan Greenspan is said to fear, it may impose
fierce, politically unacceptable and economically unnecessary costs
on the out-of-step members--of which Britain might well be one. This
would be a silly sort of self-mutilation in a period when the British
economy is relatively more successful than at almost any time since
the war.

If the euro is to be a serious and durable currency, rather than a
short-lived political gesture, there is much to be said for building it
slowly with a membership that is comfortable with the rules and
conditions. What's the hurry?

David Willetts:

Jonathan Clarke's piece reminds me of nothing so much as the
outpourings of those extreme Euroskeptics whom he attacks. There is
the same obsession with Europe and the comforting search for the one
simple, exclusive cause of all our troubles--we are told that if only
Conservatives had got the line on Europe right, everything would have
been fine.

Clarke has one valid point: the Conservative Party is still coming to
terms with the implications of signing the Single European Act in
1985. That was a measure of far greater constitutional significance
than the Maastricht Treaty. Conventional nineteenth-century free
trade simply meant accepting goods from other countries without
tariffs, provided they met our domestic regulatory requirements. The
Single Market goes way beyond that in at least three crucial
respects. First, it does not just cover goods but services, capital,
and labor markets. Second, there is mutual recognition. If a Spanish
car meets the safety standards, it should be sold in Britain with no
further regulatory requirements. An academic qualification from a
university in Bologna or Marseille should be valid throughout the
European Union. Third, the market is to be policed by a
supra-national authority, the European Court of Justice, with the
power to intervene where individual nation-states are not complying
with the terms of the Single Market. That is undoubtedly a
significant move away from the traditional powers and prerogatives of
the nation-state. In the decade since the Single Market was ratified
Conservatives have experienced the same tensions as American
Republicans over NAFTA, but even more acutely.

The greatest significance of "Europe" for Conservatives is ignored by
Clarke. The collapse of the Soviet Union ended the old ideological
divide between capitalism and communism. Now the crucial intellectual
and ideological battle is between two different models of capitalism. One
of the most interesting Continental analyses of the battle is Michel Albert's
book Capitalism versus Capitalism (New York: Four Walls Eight Windows, 1993),
while in Britain it is the theme of Will Hutton's appallingly influential The State We're In
(London: Vintage, 1996). Both books argue that there is a choice for Britain
to make between the European social model and what the critics call
Anglo-American capitalism. It is a real choice. This battle of ideas is fought
out in international institutions such as the IMF, the World Bank, and above
all the European Union. The authorities in Brussels explicitly see themselves
as pursuing an agenda of creating a European social model. This means heavier
regulation of the labor market. It means trade that is made "fair" by eliminating
the "unfairness" of "social dumping." It means trying to create a uniform European
model of corporate governance. It rests above all on the belief that the market
is a bitter pill that can only be swallowed if it is generously sugar-coated with state subsidies.

As every day passes, the evidence mounts that it is the Anglo-American
model that yields economic growth, rising prosperity, and more employment,
while the European model threatens to bring back the old Euro-sclerosis of the
1970s. One of the things that we Conservatives tried--and sadly failed--to do
in the 1997 General Election was to focus the British electorate's attention on
this ideological divide. Tony Blair's agenda of signing up to the European Social
Chapter, imposing a minimum wage, and placing himself in the tradition of
European social democracy threatens much of what Margaret Thatcher
and John Major have achieved since 1979. Our view of the world was
caricatured as harsh and selfish, whereas Labour instead promised a cozier
world of compassion, security, and "partnership." That is the real debate
about the direction Britain must take and it is "Europe" that brings it to life.