THE POLITICS OF ECONOMIC ADJUSTMENT IN FRANCE AND BRITAIN:

DOES DISCOURSE MATTER?

Vivien A. Schmidt
Department of International Relations
Boston University
152 Bay State Road
Boston, MA 02116
Tel: 617 358 0192
Fax: 617 353 9290
Email: vschmidt@bu.edu

Paper presented at the European University Institute, Florence, May 5, 2000 and at the Institute
d’Études Politiques, Paris, May 30, 2000.

Appeared in Journal of European Public Policy vol. 9 no. 6 (2002): 894-912.

 THE POLITICS OF ECONOMIC ADJUSTMENT IN FRANCE AND BRITAIN:

DOES DISCOURSE MATTER?

Abstract

Do legitimating discourses matter for a country’s successful adjustment to economic

policy change? Or can adjustment more simply be explained by the interplay of economic and
political interests, path dependency, or cultural framing? This paper argues that discourse—
defined as constituting both a set of policy ideas and values and an interactive process of policy
construction and communication—matters, and that it can be shown in some instances to exert a
causal influence over and above the interplay of interests, institutions, and culture. In
illustration, the paper examines critical shifts in the political-economic discourses and policy
programs of France and Britain, presenting them as matched cases. It finds that while in Britain,
the presence of an effective legitimating discourse accompanying economic policy change
proved transformative, in France the absence of such a discourse until relatively recently proved
problematic.
 THE POLITICS OF ECONOMIC ADJUSTMENT IN FRANCE AND BRITAIN:

DOES DISCOURSE MATTER?

INTRODUCTION:
Over the past twenty years or so, both Britain and France have undergone radical
economic change, pushed by external economic pressures related to globalization and European
integration and by internal economic vulnerabilities related to monetary instability, loss of
industrial competitiveness, and labor strife and rigidities. For both countries, the radical changes
involved instituting monetarist macroeconomic policies, deregulating and privatizing business,
increasing labor market flexibility, and tightening social expenditures. In Britain, these changes
began early, ahead of European Community pressures, instituted by a Conservative government
ideologically committed to neo-liberal reform and more concerned about the potential threats of
European integration than globalization. In France, they came a bit later, and in fits and starts,
instituted by governments of the left and the right committed to neo-liberal reform more for
pragmatic than ideological reasons, and intent on using European integration as a shield against
globalization.
For both countries, the public response to adjustment was initially mixed. But whereas in
Britain, the public in the end seemed to have come to embrace the new set of policies, along with
the accompanying neo-liberal ideas and values, not so in France, where public acceptance
continued to be problematic. The reasons for the difference, as I will argue below, have much to
do with the legitimating policy discourse, which in Britain was transformative, and in France
was not. Whereas French governments of both the left and the right beginning in l983 were in a
continual search for a discourse capable of convincing the public of the appropriateness and not
just the necessity of their neo-liberal policy program, something a government of the left appears
to have found only in the late l990s, British governments of the right beginning in l979
developed a legitimating discourse for their more radical neo-liberal policy program much of
which the public found so convincing that it is now in the process of renewal by a government of
the left.
This contrast between France and Britain is useful not just as a comparative case study of
the politics of economic adjustment. It also serves as a test of the causal influence of policy
 2

discourse in the dynamics of economic adjustment, by showing how countries with very similar
background conditions—not only in their economic circumstances but also in interests and
institutions—can differ in outcomes as a result of their legitimating discourses. As such, the
article examines critical shifts in the political-economic discourses and policy programs in both
countries. For France, it concentrates on the early to mid l980s during the Mitterrand presidency
and the mid to late l990s during the Chirac presidency under Prime Ministers Juppé and Jospin,
arguing that while the failure to address adequately the question of the appropriateness of neo-
liberal reform in the earlier period was not an impediment to change, it became so later, in the
l990s with the need to reform the welfare state, and was only remedied with a new legitimating
discourse under Jospin. For Britain, the article focuses on the late l970s and early l980s under
Prime Minister Thatcher and then the mid to late l990s under Prime Minister Blair, arguing that
the ultimate success of the neo-liberal discourse in the earlier period was the key to the
continuation of the Thatcherite policy program in the later period, and that the renewal of that
discourse in this later period has also provided a new élan for welfare reform.

WHY DISCOURSE MATTERS:

Since the late l970s or early l980s, all European countries have undergone tremendous
economic change, with countries having moved in a liberalizing direction, although some much
farther and faster than others. Most often, scholars have treated such changes as the inevitable
responses to the external pressures of globalization and Europeanization by national policy elites
following the dictates of economic interest, while they have presented differences in countries’
responses as the result of institutional path dependencies or, less frequently, of national identity
and culture. The problem with such accounts is that they explain little of the political dynamics
of adjustment, that is, how governments managed to gain agreement for change from relevant
policy actors and the general public and, thereby, to overcome entrenched interests, institutional
obstacles, or cultural blinders to change. After all, we are talking about reforms that went
against the narrow self-interests of large parts of the population, that in many cases radically
altered long-established institutional structures and processes, and that often challenged
commonly held national values and conceptions of national identity. Even if governments had
the institutional capacity to impose change, e.g., in systems with power concentrated in the
executive, they still had to win elections and weather protests. And where governments did not
 3

have that capacity, e.g., in systems with power dispersed among different governmental
institutions and collective societal actors, winning elections was only the half of it.
In other words, little in the approaches from any one of the three types of
“institutionalisms” (Hall and Taylor l996), whether rational choice, historical, or sociological
institutionalism, does much to account for the often radical changes affecting European
countries. These approaches tend to be largely static, focusing more on continuity than change.
Rational choice institutionalism elucidates the interests and incentives for or against change, but
has difficulty accounting for how political actors overcome entrenched interests or alter their
perceptions of interests. Historical institutionalists describe the historically dependent paths of
development that represent institutional constraints to or opportunities for change, but encounter
difficulty explaining how political actors overcome institutional blockages or establish new
institutional patterns. Sociological institutionalists illuminate the cultural rules and norms which
frame political actors’ understandings of their interests and set imaginable avenues for change,
but do little to shed light on how political actors overcome cultural blinders to change or create
new cultural rules. For the dynamics of change, we must be able to explain how political actors
create an interactive consensus for change, which necessarily can only come about through
communication.
This is why, in what follows, I briefly elaborate an empirical theory of discourse that
seeks to go beyond the traditional three institutionalisms. It builds on the already substantial
literature in comparative politics and international relations by scholars grounded in the three
different institutionalisms who take ideas and discourse seriously as an impetus to change (e.g.,
Hall l989, l993; Sikkink l991; Goldstein and Keohane l993; Campbell l998; Risse-Kappen l994;
Katzenstein l996; Wendt l997; Diez l999). But rather than siding with one or another of these
scholars’ approaches, I seek to provide a broad definition of discourse that gains from the
empirical insights of a wide range of such scholars’ approaches without, however, necessarily
taking on board their philosophical presuppositions.
The literature tends to fall into three main categories: studies of the ideas used in policy
change; of the groups who generate the ideas used in the policymaking process; and of the use of
ideas in the process of public persuasion. Most of the approaches in the literature tend to fall
within only one or at best two of these categories, whereas in my view, a complete account of the
role of discourse requires all three.
 4

Among the many scholars whose focus is primarily on the use of ideas in policy change,
for some, ideas represent the necessary conditions for collective action which facilitate radical
policy change by serving to redefine economic interest and to reconfigure interest-based political
coalitions (see Hall l989; Blyth l999; Parsons 2000). For others, ideas as “policy narratives”
(Larat l999; Roe l994; Gottweis l999; Radaelli n/a), as “discourses” (Campbell l993; Ashley and
Walker 1990; Doty 1996; Milliken l999), or as “frames of reference” (the “référentiel”—see
Jobert l992; Faure, Pollet and Warin l995; Muller and Surel l998) serve to (re)construct actors’
understandings of interests and thereby to redirect their actions within institutions. And for yet
others, ideas as national identities (e.g., Risse et al., l999), “norms” (Finnemore and Sikkink
l998), national values (Schmidt 2000b), and collective memory (Rothstein 2000) serve to shape
the incentive-based push of interests or the path-dependent pull of institutions.
But ideas alone are not enough to explain policy change. How they are used in the
policymaking process is equally important. And this, too, has been the subject of a growing
literature that takes as its focal point the groups at the center of policy construction who tend to
come up with the ideas and meanings that form the bases for collective action and identity. For
these scholars, the dynamics of change must be understood by way of ideas-based coalitions that
seek to overcome entrenched interests and institutional obstacles to change, whether through
“epistemic communities” (Haas l992; Mazey and Richardson l996; Kohler-Koch l997, pp. 99-
101), “advocacy coalitions” (Sabatier and Jenkins-Smith l993; Sabatier l998), “discourse
coalitions” (Wittrock, Wagner, and Wollmann 1991; Lehmbruch l999), the “médiateur” of the
“référentiel” (Muller l995), or the “norm entrepreneur” at the “norm emergence” stage
(Finnemore and Sikkink l998).
This focus on the groups responsible for the generation of policy ideas, however, is still
not sufficient to explain policy change. For it is also necessary to consider how such ideas find
their way from generation to implementation, that is, how a set of ideas devised by policy elites
speaking amongst themselves is translated into a publicly accessible language and discourse
capable of gaining sufficient public attention and acceptance for government to feel a mandate to
put such ideas into practice. And here, too, there is an extensive literature that concentrates on
politicians’ electoral promises and policy pronouncements and the ensuing debates and
discussions in the more general public sphere. In addition to the studies of political persuasion
in the context of electoral politics and mass opinion (e.g., Zaller l992; Mutz, Sniderman, and
Brody l996), there are approaches which recommend a focus on “policy forums” (Rein and
 5

Schön l991), on the discourse of democratic governance (March and Olsen l995), on “national
political discourses” (Hall l989, p. 383f), on the “norm cascade” of the “norm life cycle”
(Finnemore and Sikkink l998), on “communicative action” (Habermas l996) in the “bourgeois
public sphere” (Habermas 1989), or on discursive democracy (Dryzek 1999).
To gain a full understanding of the political dynamics of change, then, I suggest that one
needs to go beyond “politics as usual,” that is, beyond an understanding of the interplay of
interests, institutions, and cultures that represent the background conditions to change, to
examine what ideas and values are contained in a policy program, how policy elites construct
their policy program, and how they convey it to the general public. All of this I consider under
the rubric of policy discourse.
Discourse, as defined herein, broadly consists of whatever policy actors say to one
another and to the public more generally in their efforts to construct and legitimate their policy
programs. As such, it constitutes both a set of policy ideas and values and an interactive process
of policy construction and communication. In its first ideational dimension, more specifically,
discourse performs a cognitive function, by elaborating on the logic and necessity of a policy
program, and a normative function, by demonstrating the program’s appropriateness through
appeal to national values and identity. In the second, interactive dimension, discourse also
performs two functions: coordinative, by providing a common language and framework through
which key policy groups can come to agreement in the construction of a policy program, and
communicative, by serving as the means for persuading the public (through discussion and
deliberation) that the policies developed at the coordinative phase are necessary (cognitive
function) and appropriate (normative function) (for more detail, see Schmidt 2000a).
Discourse, in brief, matters in policy change both because of its ideational content and its
interactive process. But even if we know how policy discourse matters, can we know when it
matters, that is, when it exerts a causal influence over and above the push or pull of interests,
institutions, or culture? Can we determine when it is little more than a reflection of interests,
path dependence, or cultural norms, and when it goes beyond these to transform interests, chart
new paths, or create new norms?
Showing that discourse exerts causal influence is not simple, since the ideas articulated
by a discourse cannot easily be separated from the interests which find expression through them,
from the institutional interactions which shape their expression, or from the cultural norms that
frame them. And because of this discourse cannot in any case be seen as the cause, or the
 6

independent variable, given that it rests, as it were, on top of the other variables. But it could be
seen as one of a number of multiple causes or influences—and it may even be the very variable
or added influence that makes the difference, by serving to overcome entrenched interests,
institutional blockages, or cultural blinders to change. This it is likely to do through the
reconceptualization of long-standing notions of self-interest, the reframing of institutional rules
and cultural norms, and through the appeal to general interests over narrow self-interest.
However, discourse may just as easily be a mere accompaniment to policies that result
from strategic bargaining among interests, as a mere epiphenomenon of the strategic interactions
of policy elites intent on promoting their own self-interest and that of their constituencies. It may
do little more than to serve as a reinforcement of policies that follow long-established
institutional paths, or as a reiteration of long-accepted cultural rules and norms. After all, policy
elites are always talking. The question is: When is policy discourse more than just “cheap
talk”? When does it do more than simply express the negotiating positions of different parties to
policy construction or the debating positions of different publics in policy forums? When is it, in
the terms of the international relations negotiation literature, more “arguing” than “bargaining”
(where arguing is seen as a distinct mode of interaction to be differentiated from either the
strategic bargaining of rational choice or the rule-guided behavior of sociological
institutionalism--see Risse 1998). When could one call policy discourse transformative rather
than merely instrumental? In short, what makes policy discourse something important to look at,
as more than the simple expression of interests by rational actors, of the path-dependent
institutional interactions among collective actors, or of the cultural norms and values embedded
in actors’ everyday actions and identity?
In what follows, I try to explore when policy discourse matters by exerting a causal
influence over and above the interplay of interests, institutions, or culture. Thus, rather than
considering how policy discourse matters, which would involve exploring its development over
time in different countries, for example, in the legitimation of economic and social policy change
(Schmidt n/a) or in welfare state adjustment (Schmidt 2000b), here I focus on critical shifts in
policy programs when legitimating policy discourses may matter more than other factors. To do
this, it is useful to try to control for as many variables as possible, and to compare reasonably
matched sets of cases, whether two countries with similar background conditions, that is,
affected by similar events with similar interest, institutional, and/or cultural configurations, or
one country at different times, where little other than the policy discourse changes.
 7

Britain and France over the past two decades provide just such an opportunity, since not
only can one point to moments in each country when change in policy discourse was the main
variable—in particular the case of France between the Juppé and Jospin governments in the
l990s—but one can also consider the two countries as a matched pair on the basis of similarities
in many of the background conditions. Although there were only superficial similarities in ideas,
given differences in national understandings of what neo-liberalism was and what it entailed in
terms of reform, there were significant similarities in events—both countries suffered from
severe economic crisis in the late l970s and early l980s; in interests—both countries were
politically polarized between right and left and economically divided between capitalist interests
focused on neo-liberal reform and labor interests pulling for more socialist and collectivist
values; and in institutions—both countries are what one can term “single-actor” systems, with
concentration of power in the executive, a unitary state, a majoritarian electoral systems, and
“statist” policymaking processes in which governments tend to formulate policy largely absent
outside input (see Schmidt l996).
In Britain and France, moreover, the institutional context frames a similar discursive
process. In both countries, the coordinative discourse tends to be rather limited, with a highly
restricted elite involved in policy construction, whereas the communicative discourse tends to be
much more elaborate, as it is government-initiated and focused on winning over the general
public which, if not convinced of the necessity and appropriateness of the policies, could impose
sanctions through periodic elections (as in both countries) and protest (much more so in France,
given Britain’s less contestational political practice).
Most importantly, whatever the (still substantial) differences between the two countries,
they nonetheless stand together in contrast with most other European countries such as Germany,
Austria, Sweden, and the Netherlands. In these “multi-actor” systems, power is more dispersed,
given the federal or consociational nature of the state, corporatist policymaking processes, and/or
proportional representation systems. Here, the coordinative discourse tends to be the purview of
a much wider cross-section of policy-related elites encompassing not only governmental political
and technocratic elites but also opposition parties and interest group leaders, and almost
necessarily leads to a much thinner communicative discourse. This is because actors’ energies
are focused on agreeing amongst themselves and on then persuading their own constituencies
that the agreement is acceptable rather than on explaining their compromises to the more general
public. In such multi-actor systems, the sanctions come before the fact, as the immobility
 8

resulting from lack of agreement, rather than afterwards, as the election losses or protests of
single-actor systems.
In single-actor France and Britain, on the contrary, because the government always has
the power to impose, the discourse has greatest potential influence in the context of policy
implementation rather than policy formulation. Its causal influence therefore can be gauged only
after the fact, primarily by the public responses to government policy, and in particular by
changes in public perceptions of what is necessary and appropriate. Elections often consecrate a
discourse or bury it, although this alone is not sufficient to demonstrate its causal influence (or
lack thereof), given the many possible reasons for electoral success or failure. Protest is
generally a clearer gauge of the failure of discourse and lack of protest an indicator of causal
influence, although public quiescence could always simply suggest public indifference while
protest may only indicate the powers of entrenched interests. Public opinion about the
government’s policy program is another way of gaining insight into the influence of a
government’s communicative discourse, but this too may be contingent on a variety of other
factors (e.g., public attitudes toward the government’s performance generally), and the influence
may not be apparent yet at that time. In fact, the causal influence of discourse may sometimes
appear much later, as opposition parties find themselves able to win elections only by taking on
key elements of the previous government’s discourse and/or policy program.
Assessing the causal influence of discourse, in short, is difficult, given the great variety
of factors that could be at play. And therefore the best way to show its influence is through a
preponderance of evidence, that is, by considering election results, opinion polls and surveys,
protest, changing party platforms and opposition discourses, and so on. Moreover, these have to
be set into context, that is, against a background that takes into account the precipitating
economic or political events that create enough uncertainty to leave an opening to ideas and
values that challenge the predominant ones; the eroding interest coalitions in response to crisis
that increase receptivity to the discursive reconceptualization and reconfiguration of interests;
the loosening institutional constraints to change in the face of crisis and interest realignments
that allow new institutional paths to be considered; and the questioning of cultural norms in the
midst of crisis, interest realignment, and institutional redefinition that lead to new rules of action.
In what follows, I can do no more than briefly sketch out these background conditions to
change, since my focus is necessarily on the discourse itself, and on whether it can be shown to
have exerted a transformative influence. Because the countries considered are Britain and
 9

France, the communicative discourse will be my major focus, while I look for the evidence of its
causal influence in public opinion polls, values surveys, election results, protests, party politics,
coalition-shifts, as well as, of course, in the discourse itself, in the pronouncements of
politicians, the reports of the press, the critiques of opinion leaders and academics, and so on.
Although the coordinative discourse and the shifting interest coalitions that help explain the
generation of policy ideas and the construction of government policy are also of significance,
their restricted nature makes them less significant for our purposes (but for this, see Schmidt
n/a).

THE POLITICS OF ADJUSTMENT IN FRANCE:

When the Socialists under President Mitterrand instituted a moderate neo-liberal policy
program in l983 in response to major economic crisis which was partially of their own making,
they abandoned all semblance of their socialist discourse of l981-l983, legitimating their policies
with a discourse that focused on the necessity of change due to economic crisis and globalization
pressures but said comparatively little about its appropriateness. And what little they did say was
intended to persuade the general public not that neo-liberal reform came with a different set of
values, as in Thatcherite Britain, but rather that the traditional values of social solidarity would
be honored—even as unemployment continued to mount and the problems of “exclusion” grew.
The expansion of the welfare state through the l980s, moreover, can be seen as much as
providing the interest-based incentives to ensure acquiescence from the most affected interests as
the fulfillment of the socialists’ normative commitment to social solidarity. The discourse, in
other words, was little more than an accompaniment to the new set of interests at play in France,
and certainly not transformative.
Between the early to mid l980s and the mid to late l990s, successive governments of the
right and the left never did find a convincing discourse that managed to reconcile neo-liberal
policies with traditional social values. The main legitimation provided was cognitive, with
governments increasingly justifying neo-liberal policy change by reference to the challenges of
Europeanization and globalization, by presenting European integration as necessary to protect
the country against the incursions of globalization while enhancing France’s economic power in
Europe and the world. The normative found little place other than in appeals to sacrifice in the
face of crisis, or in reiterations of the long-standing values of social solidarity. Over the course
of the l990s in particular, however, the lack of a normatively legitimating discourse became
 10

more and more problematic, as the economic adjustments related to the neo-liberal policy
program and European monetary integration were seen increasingly to conflict with social
solidarity, whether because of proposed cuts in social programs or in the “service public” (public
interest services). As of the early l990s, in fact, as recession and the Maastricht criteria reduced
governments’ capacity to use interest-based incentives to ensure social peace, a legitimating
discourse that served to reconcile neo-liberal policies with traditional values, or invoked new
values, became more and more important. But it was still sorely lacking, as was dramatically
brought home with the l995 strikes in response to reforms the Juppé government sought to
impose. It was only with the Jospin government that such a legitimating discourse seems to have
been found.

The l980s in France

In 1981, when the Socialists came to power, “la crise” had already been going on for
some time, with the second oil shock following upon the first having brought growing
unemployment, rising inflation, and decreasing industrial competitiveness. The postwar dirigiste
policy program of state-led economic development through neo-Keynesian macroeconomics and
industrial policies focused on national champions and the ‘grands projets,’ which had been
legitimated by a Gaullist discourse that promised to restore French economic prowess, growth,
and grandeur, was no longer doing what the discourse had proclaimed. The industrial policies
did little for competitiveness, since they were mainly focused on rescuing failing enterprises in
order to preserve employment, while the macroeconomic policies of the Barre government,
which had substituted a mild monetarist program of budgetary austerity for the neo-
Keynesianism of the past, pegged the franc to the Deutschmark in the European Monetary
System, and introduced some market liberalization and deregulation, did little to revive the
economy (see Hall l986; Schmidt l996).
The Socialists won on the basis of a platform that promised a renewal of the Gaullist
policy program through increased state dirigisme by way of a return to neo-Keynesianism, large-
scale nationalizations and industrial restructuring, and more generous social policies. They
legitimated this with a postwar Marxian discourse that insisted on the necessity of increased state
interventionism to solve the economic crisis through “socialism in one nation” and on the
appropriateness of such reform through appeal to socialist values. Thus, in addition to the
invocation of national pride with regard to restoring French economic prowess, the discourse
 11

was replete with talk of the capitalist "wall of money," of CEOs of major firms as exploiters, of
the “break with capitalism” through the nationalization of the means of production, and of the
need to break the class bias of French society and to promote equality.
Much of this talk quickly moderated, however, as the Socialists in power increasingly
justified nationalization in nationalistic as opposed to Marxian terms, as the means to save firms
from foreign takeover, and soon rehabilitated business by calling CEOs no longer "exploiters"
but "creators of riches" and by treating profit no longer as a dirty word (see Schmidt l996,
Chapter 4). With the Socialists’ appointees themselves in control of the means of production
(and therefore by definition not ‘exploiters’), instead of a “break with capitalism” the Socialists
were now intent on demonstrating that theirs was “a break with the failures of capitalism”
(Zinsou l985, p. 61). Economic interest, of course, had everything to do with this, given the
Socialists’ growing concern with deepening economic crisis and double-digit inflation. The
Socialists’ own political interests, however, also played a large role, since the Socialists
increasingly recognized that if they did not do something to turn the economy around, they
would lose the next election. As one insider explained it, the Socialists were already faced with
a major dilemma after one year in power: if they accepted reality, they had to renounce their
socialist doctrine, and thus be plunged into ideological crisis; if they rejected reality and stayed
with their ideology, they would lose politically (interview with author, Paris, March 13, l991—
cited in Schmidt 1996, Chapter 4).
But it was not until l983, in the face of runaway inflation, capital flight, continually
rising unemployment, and plummeting industrial competitiveness, that the socialists accepted
that their policy program was unsustainable economically, and jettisoned the discourse along
with the policy program. The problem for the discourse was that it could neither cognitively
account for the failure of the policies to promote growth nor normatively justify the subsequent
turn to budgetary austerity in terms of the Socialists’ original political and social commitments.
The change in communicative discourse was as abrupt as the change in policy program.
Behind the scenes, however, the coordinative discussions within the upper echelons of the
Socialist political party had been going on for some time, and growing increasingly polarized
and contentious, to culminate in a two week period in March l983. This is when President
Mitterrand conferred with a small group of Socialist party leaders on the choice of policy:
whether to institute budgetary austerity and stay in the EMS or to pull out, put up protective
economic barriers, and seek to maintain French “exceptionalism.” The coordinative discourse
 12

here was extremely restricted: neither Communist coalition partners nor the larger party was
consulted (Bauchard l986); and Mitterrand himself was alone to decide.
Ultimately, Mitterrand’s decision was based on the belief that there was no alternative to
a great U-turn in economic policy, with monetarist macroeconomic policies to be followed by
more supply-side microeconomic policies, and with the retreat of the state. But how to formulate
a communicative discourse that would justify such a neo-liberal policy program without a neo-
liberal discourse? The neo-liberal discourse was not an option not only because it had already
been taken up by the right since the l981 elections but also because it so clearly contradicted the
Socialists’ own 1981 to 1983 discourse (even though the Rocardians had a similar discourse
prior to l981). Unlike Thatcher, whose neo-liberalism was a matter of ideology, and normatively
as well as cognitively presented as the only thing to do, for which there was no alternative, for
Mitterrand and the Socialists, it was a matter of necessity, cognitively right but normatively
difficult (and for many disillusioned Socialists impossible) to legitimate. And certainly, they
could not demonstrate its appropriateness in terms of post-war socialist values.
The communicative discourse which followed was all about economic necessity and the
need to relaunch growth and fight unemployment. The Socialists talked about the “contrainte
extérieure” or the external constraints imposed by globalization and the need to remain in the
European Monetary System, which would act as a shield against globalization. Modernization
and competitiveness became the new imperatives, with “competitive disinflation” and the fight
against inflation the new catchwords in the macroeconomic sphere, industrial dynamism, profits,
and the disengagement of the state the catchwords in the microeconomic sphere as Laurent
Fabius, first as Minister of Industry and then Prime Minister, exhorted French firms to "get out
of the red" or else "heads would roll" and promised that “lame ducks” would no longer be
rescued from bankruptcy (Le Monde March 31, l985).
This discourse on the need to restructure the economy was effective, judging from the
opinion polls. These showed public confidence in CEOs go from 44% in l981 to 56% in l985
(Sofres 1988, p. 31); found the public's view of business as exploiter on the decline and the
entrepreneurial spirit on the rise by l984 (COFREMCA l989); and saw a new realism in the
population already by l983, with 90% of those polled agreeing that economic improvement
required French enterprises to become competitive and 67% agreeing that deregulation would
facilitate business’s development and success (COFREMCA l983). Moreover, by l986, private
entrepreneurs even credited the Socialists with "renewing the capitalist spirit in France"
 13

(Financial Times, June 26, l986). And although there is no doubt that the economic
improvement which followed from the neo-liberal policy program had a lot to do with changing
attitudes, there can also be no doubt that the discourse which legitimated that program also had
an important influence on changing those attitudes, especially since the attitudinal changes for
the most part came prior to the economic improvement, by l983 and l984, whereas the clear
signs of improvement only began in l985.
But while the Socialists’ discourse was clearly quite successful in persuading the public
as to the cognitive merits of its policy program, it did little with regard to the normative merits of
the program. When the Socialists did refer to values in their efforts to legitimate the policy
program, they mainly appealed to French national pride, and spoke of the economic combat for
national survival and of national revival. And although the Socialists did speak some of social
justice (Mitterrand especially), the definition had changed from a discourse focused on equality
and the effort to equalize income disparities to one of solidarity, which represented the tacit
acceptance of the inequalities of income necessitated by a more neo-liberal approach to
economic management (Jobert and Théret l994, pp. 72-78).
This is when Mitterrand himself began to differentiate his presidential discourse from
that of the government, by insisting that his role was not to talk of ‘rigueur,’ or austerity, but
rather to identify the ‘grands objectifs,’ the ‘projet de civilisation,’ (Labbé l990, pp. 155-156).
His task, as he reiterated time and again, was as the “guarantor of national unity and social
justice” (Labbé l990, pp. 157-158). Thus, while Mitterrand left to the government the cognitive
task of explaining the necessity of change, he himself was focused on the normative. But instead
of arguing for the appropriateness of the neo-liberal policy program, he seemingly implied that it
was inappropriate by proclaiming to defend the long-standing values of social solidarity.
Moreover, the problem with the discourse is that even as Mitterrand pledged to defend
social solidarity, the reality of increasing unemployment and “exclusion” as a by-product of
industrial rationalizations and restructurings resulting from the neo-liberal policies seemed to
belie this. The discussion of social solidarity itself was more focused on providing interest-based
incentives for those most affected by the neo-liberal restructuring of the economy than on
redefining interests, individual obligations, and state responsibility with regard to social policy,
as it had with Thatcher in Britain. Thus, the generous unemployment compensation programs,
extensive use of early retirement, and increases in social spending throughout the l980s can be
seen as much as a way of buying off the most affected interests as the defense of traditional
 14

values. And in the interim, the Socialists did not in any way address the seemingly logical
contradiction between an emphasis on belt-tightening neo-liberal economic policies and
expansive social policies. Moreover, although one might have expected the right-wing
government that came to power in l986 on the basis of a radical neo-liberal program to have been
better able to reconcile this contradiction, they did not. For although they adopted something of
a Thatcherite, ideological discourse on the reasons for restructuring the economy—e.g., to
increase individual responsibility, innovativeness, and independence while engineering a retreat
of the state—their discourse when it came to social policy issues remained very much the same
as that of the Socialists, with social solidarity still the watchword (see Schmidt l996, chapter 5),
as Prime Minister Chirac himself repeatedly made clear that his policies would not challenge the
“republican consensus.” Subsequent governments, moreover, whether of the left or the right,
continued the moderate neo-liberal policy program without providing any better reconciliation of
the cognitive and normative aspects of the discourse, even if under Prime Minister Rocard in
particular there was greater emphasis on not abandoning the victims, with further measures to
address problems of ‘exclusion’ such as through the Revenu Minimum d’Insertion, which
provided a minimum income for those who did not qualify for unemployment compensation or
other forms of social assistance.

The l990s in France

But whereas the failures of the discourse were not terribly problematic in the mid to late
l980s, as the economy picked up and social spending continued to rise, they became increasingly
so by the early l990s, as the country slid into recession and pressures built to lower budget
deficits and public debt in the run-up to EMU. This was reflected in the increasing sense of
dissatisfaction among the general population in the early l990s, with opinion polls showing a
growing sense that “people like them” lived less well than before (in l966, only 28% responded
“less well” to a question asking whether they lived better or worse, compared to 50% in l981,
51% in l985, 60% in l993, and 62% in l994—Sofres l996) and that there needed to be a complete
change in society (which went from 35% in l989 to 53% in l994—Sofres l996). It is equally
interesting to note that the acceptance of neo-liberal economic values, indicated by positive
attitudes to profits, business, or capitalism, after rising appreciably in the l980s diminished in the
early l990s. Profit, for example, which was seen as a more negative than positive thing in l980
(39% con vs. 37% pro), attained a majority of positives in l988 (54% pro vs. 32% con), only to
 15

lose ground by l993 (44% pro vs. 42% con) and to be viewed negatively again in l994 (49% con
vs. 43% pro) (Sofres l996).
In place of a fully legitimating discourse, the leadership of both right and left talked
increasingly of the importance of European integration as a shield against globalization. But
although this worked for a while, with a permissive consensus assured by the growing economic
prosperity, by the mid l990s, the lack of a fully legitimating discourse began to take its toll in the
face of the early l990s economic recession, the l992 run on the franc, continued high
unemployment, and the increasing incursions on the welfare state. The problems did not really
come to a head with the debates surrounding the l992 Maastricht referendum, however, since
these were primarily focused on sovereignty issues, but rather as successive governments began
to institute cuts in welfare and social security in the mid l990s and to deregulate and privatize in
the service public arena, as European pressures for deregulation increased in such sectors as
telecommunications and energy.
The problems related to the discourse on Europe had to do with the fact that in the l990s
up until the l997 elections, there was very little public deliberation about the economic
consequences of EMU. In fact, the mainstream parties maintained something of a taboo on
criticism of it, with "la pensée unique," literally, single-minded thought, as critics dubbed it,
having stymied any thorough-going, open discussion of the potential problems involved, and
especially any linkages between the restrictive budgetary policies related to meeting the
Maastricht criteria and cuts in the social policy arena. The taboo, or dominant conviction, itself
stemmed in large measure from the fact that perseverance with monetary integration had become
not only a point of honor for most mainstream politicians of the left and the right, given the
sacrifices since the mid l980s that included suffering high unemployment and too-high interest
rates, but also a source of national pride, given France's economic leadership role in the EU that
accompanied its perseverance (Schmidt l997b). Equally importantly, a majority of policy elites,
not just politicians but also central bankers, business and labor leaders, saw EMU almost entirely
in a positive light, although their reasons for support differed (Verdun l996). But what this
meant is that the public, left with little more from mainstream politicians than exhortations to
continued sacrifice and incantations on the future benefits of EMU, were therefore more
vulnerable to demagoguery from the extreme right, where issues of loss of sovereignty were
joined with anti-immigration sentiments (Schmidt l997a).
 16

For mainstream parties of both the left and the right, the problem has been less one of
legitimating European monetary integration per se than how to legitimate a neo-liberal political-
economic program which was increasingly impinging on the socioeconomic sphere. This
represented both a cognitive problem, because of the seeming logical contradiction between
economic belt-tightening and generous social services, and a normative one, given continued
underlying French conceptions of the obligations of "l'état républicain," of the Republican state,
to guarantee citizens’ social justice through the provision not just of traditional social services
but also public infrastructural services. On the list of things in l996 that worried people the
most for the next few years to come, attacks on their social rights (les aquis sociaux) was second,
with 43% worried (after racism, at 56%), by contrast with the disappearance of the French nation
in the European Union, in fifth place with 25% worried (Sofres l996).1 Moreover, the French
continued to be very attached not only to their public system of social security (in l993, 85% had
confidence in the ability of the social security system to solve the problems they confronted, by
contrast with 39% with confidence in the administration, while 69% were unwilling to take out
private insurance, 74% were unwilling to pay more social security tax, and 75% unwilling to pay
more income tax—l993 Espace Social Européen survey, cited in Jobert and Théret l994). They
also remained fully in favor of a continued state role in the provision of public interest services.
Not only were they against privatization—with 49% against any at all in l989 (Sofres, Jan. 20-
24, l989)—but large majorities of the public also retained great confidence in the public services,
considering that they worked well or had even improved over time (Sofres, Sept. 8-9, l995).
For the French public, therefore, cuts in social services and rationalization and
privatization in public services were bound to be problematic. And it was even more
problematic for the highly unionized public sector workers who would be most affected by the
reforms, who also had great capacity for mobilization and protest. In this context, a discourse
that sought to coordinate policy construction with the unions through “concertation” or, failing
this, to legitimate the reforms to the more general public through discussion not only of the
necessity of reform, given the growing deficits of the social security system, but also of its
appropriateness, through an appeal, for example, to intergenerational solidarity, could only help.
But neither was forthcoming under either Prime Ministers Edouard Balladur (l993-l995) or Alain
Juppé (l995-l997). Balladur floated policies like trial balloons, with little coordinative or
communicative discourse, waiting to see the reaction and withdrawing the policies in the event
of significant protest (see Levy 2000). This meant that many initiatives focused on the
 17

rationalization or privatization of public infrastructural services were withdrawn in response to

strikes by public sector unions, but that private sector pension reform held, given that the near
absence of unionization in the private sector together with employee fears for their jobs in an
environment of high unemployment made it almost impossible to organize protest. But when
Juppé tried a similar reform for public sector pensions at the same time as rationalization plans
for the national railway, public sector strikes paralyzed the country. The strikes themselves,
moreover, gained widespread sympathy from the public not so much because it was opposed to
the content of reform (a majority of French at the time had accepted that the government had to
put into place drastic social security reforms—at 51% to 40%--Sofres l996), as to the method.
This was mainly because Prime Minister Juppé not only ignored the social partners in a reform
which he proudly declared was of his construction alone, with perhaps a handful of advisers, but
also failed to communicate about the reform to the public at large (Schmidt l997b).
The Jospin government since June l997 has been much more successful in instituting
welfare reforms—and it has had a much more effective coordinative and communicative
discourse, as judged by the high popularity of the government through most of its first three
years in office (between 50 and the lower 60s in percentage points most of the time). Its
coordinative discourse has been much more accommodating. The government has opened up
policy construction to a less restricted group of policy elites, including not only government
coalition members but also the social partners in the case of reforms in social security or
industrial relations (e.g., the 35 hour work week); and it has convened experts in advisory
commissions in the case of controversial issues. Moreover, its communicative discourse has
directly focused on the problems of the fit between neo-liberal policy program and social values,
by seeking to persuade the public that it is possible to have reforms that can be economically
efficient and at the same time promote social equity as well as, in the oft-repeated phrases of
governments of right and left, to combat social exclusion and heal the “social fracture.” Thus,
Jospin argued that the government would pursue moderate change, with “neither pause nor
acceleration” in the pace of reform, neither slashing benefits to the poor nor doing nothing while
the social security system goes into deficit; neither declaring class warfare on the rich nor
allowing the privileged not to pay their share; and neither dismantling the welfare state nor
failing to address its dysfunctions (Levy 2000).
The government has been more successful in social security reforms not only because of
its communicative discourse but also because of the coordinative, through more “corporatist”
 18

negotiation of reform, including the creation of private pensions funds administered by the social
partners (rather than private companies as the right had sought to do). With respect to
privatization, moreover, they argued that their approach (as opposed to that of the right)
respected rules of efficiency and equity—by seeking to secure investment as well as to guarantee
jobs while involving the unions in the negotiations, in contrast to the right’s focus on state
disinvestment, regardless of its impact on jobs or on industrial strategy, and lack of worker
consultation (Levy n/a). Moreover, even on Europe, the Socialists have managed to be more
consistent, in words and action, by seeking to balance the commitment to the EMU with the
defense of the “European social model” against the excesses of “Anglo-Saxon liberalism” and
U.S.-led globalization.
In France, in short, the problem between the early l980s and mid l990s until the Jospin
government was the inability of French governmental elites to fashion a coherent discourse to
justify the conversion to a more liberal, open, and market-oriented economy and to a more
restricted socio-economy. Without such a legitimating discourse, the loss of socioeconomic
capacity in the face of European and global forces led to public malaise and protest, stymied
necessary welfare reform efforts, and contributed to the success of the extreme right. These are
problems from which Great Britain suffered less, given a more successful legitimating discourse
over time.

BRITAIN: INVENTING A DISCOURSE

When the Conservatives under Prime Minister Thatcher instituted a radical neo-liberal
program beginning in l979 in response to major economic crisis, they claimed to be making a
radical break with the policies of both Labor and Conservative predecessors. They legitimated
their program with a discourse focused not only on the necessity of change due to the failures of
past policies but also on its appropriateness. Thatcher engaged in an ideological discourse which
sought to persuade the public that a different set of policies from Labor’s “socialism” and
“corporatism” as well as from the Tories’ “paternalism” was appropriate based on a new set of
neo-liberal values which harkened back to traditional British liberal values of individualism and
a limited state. As unemployment mounted and poverty increased, moreover, Thatcher, by
contrast with the French who claimed not to abandon the victim, blamed the victim, sought to cut
social expenditures, and to crush the unions. Rather than buy off the workers through generous
social policies, as in France, she sought to get the “middle classes” to buy into neo-liberal ideas
 19

and values not just through a discourse that appealed to the general interest and focused on
economic revival but also through policies that catered to their more narrow self-interests such as
lower taxes and privatization.2
Thatcher’s success in constructing a transformative discourse was evident in the growing
public acceptance of neo-liberal values with regard to the changing structure of the economy and
work, although this did not extend to the structure of welfare. It was also clear from the
continuation of the discourse and policy program not just by the Conservatives under Thatcher’s
successor, John Major, but by “New Labor” under Tony Blair. Blair, however, renewed the
discourse, with the “third way” presenting neo-liberalism with a more human face, while
seemingly completing the Thatcherite policy program with regard to welfare. Moreover, whereas
for Blair, globalization represents the driving force behind his neo-liberal program, and
European integration an accompaniment to it, for Thatcher globalization was an accompaniment
to her ideologically-driven neo-liberal policy program and European integration as often as not a
threat—in great contrast with the pro-European, anti-global discourse of the French.

The l980s in Britain

In l979, when the Conservatives under Thatcher came to power, the country was in deep
economic crisis, the first oil shock having added major inflationary pressures to long-standing
economic problems related to monetary instability and industrial decline, which in turn only
exacerbated spiraling labor unrest that, after a brief hiatus from l975 to 1977,3 culminated in the
massive strikes and work stoppages of the “Winter of Discontent.” To all and sundry, the
postwar consensus in which Labor and the Tories may have differed in their discourses but
ended up implementing the same quasi-liberal political-economic program—where the
liberalism apparent in economic openness, hands-off policies toward business, and voluntarism
in management-labor relations was offset by intermittent state interventionism through neo-
Keynesian macroeconomic policies and experiments in industrial policy and incomes policies—
appeared bankrupt. And Thatcher, with her neo-liberal discourse propounding greater laissez-
faire capitalism, monetarist macroeconomic policies, and the rollback of the state in place of
neo-Keynesianism and state interventionism, seemed to provide the alternative.
In Britain, radical policy change came about through the construction of a discourse and
policy program by a small political party elite around Thatcher which managed first to capture
the party leadership in l975 and then the election in l979. But although Thatcher had the
 20

institutional capacity simply to impose her pro-market, anti-state program via the strong state
apparatus, and little to fear from elections, given the divided opposition (once the Social
Democrats seceded from the Labor party), she nevertheless engaged in an elaborate
communicative discourse with which she sought to persuade the general public that her neo-
liberal program was not only necessary to put the economy back on its feet but also appropriate
because it resonated with long-standing national values.
Thatcher’s cognitive arguments were focused on convincing the public that “there was no
alternative” to her economic policies, as she talked in her first electoral mandate in particular of
the ‘Revival of Britain’ and the need to reverse the decline which had been the focus of much of
the economic discourse of the l960s and l970s. Thus, she promised macroeconomic policies that
put strict controls on the money supply and reduced public spending to combat inflation and
limit monetary volatility; industrial policies that deregulated business and privatized nationalized
enterprises (especially beginning in her second term) to spur to industrial competitiveness;
industrial relations policies that imposed new restrictive rules governing union action and
returned to a hands’ off policy in pay settlements to decrease the unions’ powers; and welfare
policies that reduced social expenditures while altering the manner of welfare provision.
Thatcher’s normative arguments concentrated on persuading the public that these
economic policies were appropriate because based on deep-seated values favoring a limited state
and liberal economic principles (Marquand l988). Moreover, she insisted that their success also
demanded a return to traditional “Victorian” values, which for Thatcher included the importance
of hard work, self-reliance, living within your income, helping one’s neighbor, and pride in
country (Interview with the BBC, l983—cited in Hedetoft and Niss l991). In addition, Thatcher
was intent on defending the people’s right “to be unequal” (Evans and Taylor, l996; Leydier
l998) and on convincing the public that inequalities were necessary to encourage the “spirit of
entrepreneurship” and raise British economic performance, while government attempts to reduce
inequalities were not only costly and ineffective but also dangerous because they created a
dependency culture (Wilding l994; Leydier l998). She was particularly intent on “rolling back
the frontiers of the Welfare State,” and promoting an “enterprise culture,” in order “to change
Britain from a dependent to a self-reliant society. From a give-it-to-me to a do-it-yourself
nation; to a get-up-and-go instead of a sit-back-and-wait-for-it Britain” (London Times, Feb. 9,
l984—cited in Hedetoft and Niss 1991). In keeping with this emphasis on self-reliance, instead
of government being responsible for solving Britain’s problems, she sought to shift the onus to
 21

the people (Riddell l989, p. 1). And with regard to welfare recipients in particular, she insisted
on distinguishing between the “deserving” and the “undeserving” poor when providing
assistance (Thatcher l993).
During her first mandate, when the main focus was on monetarist policy, Thatcher’s
discourse did not prove tremendously convincing in cognitive terms, mainly because the
economy did not turn around nearly as quickly as she had forecast, while initially at least it
proved a disaster for the manufacturing sector. Fortunately for Thatcher, continued poor
economic performance was overshadowed by her great popularity in the aftermath of the
Falklands War, with her militaristic incantations of past British military glory and memories of
Empire helping usher the Tories back into office (although the main electoral factor was the
divided opposition). Thatcher’s discourse proved more convincing during her second mandate,
not only because the macroeconomic program finally appeared to be bearing fruit but also
because the privatization of major public enterprises along with the sale of council housing
proved popular. With regard to industrial relations, moreover, Thatcher’s hard-nosed approach
to the unions turned out to be generally welcome to citizens weary of constant crisis and work
stoppages and no longer sympathetic since the Winter of Discontent of l978-79.
Social welfare reform, however, was another matter. Continued electoral opposition in
this domain ensured that Thatcher actually did surprisingly little to cut overall social welfare
expenditures or the National Health Service even if the cumulative effect of incremental welfare
reforms nonetheless moved British pension arrangements toward a more marginal model of
welfare and prepared the ground for an expansion of private pension provision, while the
National Health Service did change somewhat with the introduction of market experimentation
(Fawcett l995; Rhodes 2000).
Why the difference in responses to the policies? Opinion polls of the mid to late l980s
suggest that while the discourse could be seen as transformative with regard to public attitudes to
the structure of the economy and of work, it was not with regard to the structure of the welfare
state (see Schmidt 2000b). Whereas surveys suggest that Thatcher did manage to move the
British toward more “capitalist” values, by accepting greater inequalities, individual
responsibility, materialism, and entrepreneurialism, all of which followed from her reforms of
the structure of the economy and work, they show that she did not by any means eradicate
“socialist” values, especially with regard to health and welfare (see Crewe l991). In a 1988
MORI poll, at the same time that questions about work produced majorities in favor of a
 22

capitalist society that emphasized increasing efficiency rather than keeping people in work (50%
vs. 42%) and allowing people to make and keep as much money as they can (53%, vs. 43% for
emphasizing similar incomes and rewards for everyone), questions focused on welfare produced
majorities in favor of a socialist society (49%, vs. 43% for a capitalist society) which
emphasized social and collective provision of welfare (55%, vs. 40% for encouraging the
individual to look after himself) and rewarded caring for others (79%, vs. 16% for wealth
creation), (Hetzner l999, p. 124). Other polls confirm that while the electorate showed little
change in its strong support for government responsibility with regard to the National Health
Service and social security, they seemed to accept other Thatcherite values about individual
responsibility, to wit, that the government not be responsible for maintaining full employment or
for equalizing incomes.4
Thatcher’s policies and discourse on Europe were yet another matter. Whereas her neo-
liberal paradigm was by its very nature pro-global, given the commitment to open markets and
open borders, it was not necessarily pro- or anti-European. (By contrast with the politico-
economic issues, the political institutional issues related to sovereignty, which were the main
complication in the British relationship with the European Community throughout the postwar
period, were much more clearly anti-European—see Larsen 1997). For Thatcher, Europe
represented as much an opportunity—to extend laissez-faire capitalism to the continent—as a
threat—with the extension of continental-style state interventionism to Britain. And whereas the
opportunity presented itself with the Single Market Act of l986, with Thatcher using
accommodating, ‘communautaire’ language as she sought to lead Europe toward a greater
market liberalism, the threat appeared with the proposed Maastricht Treaty beginning in l988.
But whereas Thatcher was in perfect agreement with her closest advisors and ministers that the
proposed Social Chapter constituted an unacceptable violation of neo-liberalism which would
“make Europe’s labor market less flexible and less competitive” and “introduce collectivism and
corporatism at the European level” (Bruges speech, September 20, l988), there was no such
agreement with regard to monetary union. Where Thatcher perceived threat, mainly on grounds
of loss of national sovereignty and control if the central bank were to become independent and
monetary policy were administered by a central European bank (Busch l994), other allies and
advisers saw the opportunity to institute sound neo-liberal macroeconomic policy throughout
Europe (Larsen l997, pp. 66-68) while there was also strong support for the EMU among the
Tories’ business constituency as well as among British monetary authorities (Verdun l996).
 23

Thatcher’s increasingly confrontational stance toward the EC, which threatened to isolate the
country, together with growing dissension among the party leadership on her position (and not to
forget the highly unpopular poll tax), ultimately led to her forced resignation as head of the party
and Prime Minister.
The problem for Thatcher, then, was ultimately in the coordinative discourse rather than
in the communicative. The construction of the policy program, which had always been a highly
confidential affair, with the ideas coming from close allies in the Cabinet and hand-picked
advisors in the “Policy Unit” in the Prime Minister’s office, became even more so, as Thatcher
increasingly appeared unwilling to listen to the growing number of dissenting voices among her
own closest allies, let alone in the rest of the party leadership.

The l990s in Britain

For John Major, Thatcher’s successor as Prime Minister, the course was clear: pay
attention to the party leadership, negotiate on Europe in a more accommodating manner, but
don’t give in on the Social Chapter, and be cautious on EMU. The opt-outs on both Social
Chapter and EMU accomplished these purposes. After the negotiation of the Maastricht Treaty
and the controversy over its ratification, moreover, the government shifted from discussing the
big issues to criticizing details of environmental and social legislation and of poor financial
control and overzealous bureaucracy (Wallace l996, p. 69). The discourse for a long time,
therefore, was something of a low pitched, anti-European rhetoric, conveying the image of an
ever watchful British government, quick to protest anti-liberal incursions. By the mid l990s,
however, the discourse began to get more strident, as it had during Thatcher’s last couple of
years in office, in this case because the Euroskeptics were growing ever stronger and Major’s
majority ever thinner. By contrast with France, in fact, where criticism of the EMU and even the
EU had been largely taboo until l997, in Britain such criticism had become almost a sine qua non
of British political life, whether by the government, Parliament, or the newspapers. The danger
for Britain was that as the anti-European rhetoric escalated, while the elite remained largely in
favor of European integration, with the business elite in particular well aware of the benefits of
continued integration for the country's global competitiveness, the population was increasingly
more open to demagogic manipulation from the Anti-Europe forces. And all of this represented
a major challenge for the newly elected Blair government.
 24

On other policy issues, by contrast, there were fewer problems, mainly because Major did
little to depart from Thatcher’s legacy—nor has Blair. In effect, on policy issues other than
those regarding Europe, although Major took a more consensual, less confrontational approach
than Thatcher, he largely proceeded with the further development of her neo-liberal policy
program through continued privatization and deregulation. And Blair has only continued along
this vein. The real proof of the transformative power of Thatcher’s discourse and policy
program comes from the fact that the Labor Party was not to win another election until it had
thoroughly altered its policy program and discourse to come close to the Thatcherite.
Over the course of the l980s, while Thatcher, with the Conservative Party firmly in hand,
had been “selling” her neo-liberal program to the public, the Labor party had been going through
its own transformation. When Thatcher first came into office, the Labor party presented a
radically opposing policy program to Thatcherite neo-liberalism. Much like the Socialists in
France, Labor’s “Alternative Economic Strategy” proposed socialism in one country, with a mix
of protectionism, assistance to nationalized industry, renationalizaton, and reflationary neo-
Keynesian spending programs with the express purpose of insulating the country from global
economic pressures. This went hand-in-hand with Labor’s l983 Manifesto commitment to
withdraw from the EC, given that its policies were in clear opposition to its proposed economic
program. Labor’s position was thus not only in opposition to globalization but also to European
integration, with an anti-global discourse to counter Thatcher’s pro-global one, and an even more
anti-European discourse than that of Thatcher (Daniels l988).
The transformation of Labor was gradual across the l980s, and can be seen as much in the
changing discourse as in the proposed policies. As the discourse on capitalism gradually shifted
from clear hostility to the market, to general skepticism, then to general acceptance and, by l992,
to open embrace, with the l992 election manifesto claiming “not to replace the market but to
ensure the market works properly” (Hay and Watson l998), the policy program went from
domestic economic strategies based on reflationary policies toward a focus on the EC as the
arena for attainment of Labor economic objectives. Thus, the Labor Party came not only to
accept the inevitability of more neo-liberal macroeconomic policy and the benefits of greater
economic co-ordination across countries but also to hope that social policies ruled out at the
national level would find greater support at the EC level, and that this could also be a cause to
use with the electorate against Thatcher (Daniels l998, pp. 87-88). And when Blair took over the
party, he not only supported the macroeconomic orthodoxy of price stability, abandoning once
 25

and for all Keynesian demand management policies; he also got rid of one of the last vestiges of
‘socialism’ in l995, by eliminating Clause IV from the Labor Party Constitution, which justified
nationalization. Most telling is that once elected, he immediately gave the Bank of England de
facto independence and “opted in” on the Social Chapter of the Maastricht Treaty which had so
appalled Thatcher and out of which Major had opted. On the euro, however, Blair had to
exercise caution, in part because the lack of preparation prior to his arrival in power necessitated
a delay in order to bring the economy and institutions in line, in part because of the legacy of
John Major’s increasingly anti-European discourse, and the Euroskeptic press which has had a
great influence on the public.
Blair’s communicative discourse, moreover, rather than using Europeanization as its
cognitive justification for the neo-liberal turn (as had the Socialists in France), instead used
globalization. This is understandable, not only given the charged political atmosphere with
regard to Europe, in particular since Major’s increasingly anti-European rhetoric and the popular
press’s polemics, but also because of the traditional pro-global discourse. Unlike Thatcher’s
pro-global discourse, though, where opening up to global forces followed from her ideologically-
grounded, neo-liberal justification for change, Blair’s pro-global discourse has presented
globalization as the primary rationale for neo-liberal reform. Necessity, rather than ideology,
was the key. Thus, globalization, as the “necessity” of satisfying the inflation demands of the
global foreign exchange markets was cited as the reason for government policies to attack the
real wage (by keeping public sector wages down and urging the private sector to exercise
restraint) and the social wage (by down-grading benefit entitlements and redefining welfare as
workfare) (Chancellor’s budget speeches, July and November l997-- cited in Hay and Watson
1998), while globalization as the challenge to the competitiveness of business was the rationale
for promoting greater flexibility in the labor markets.
In the context of the globalization discourse, moreover, the cognitive justification was
not, as one might have expected, focused on rejecting the Thatcherite paradigm but, rather, on
differentiating the policy program of New Labor from that of Old Labor. In fact, the promoters
of “New Labor” seemed mostly intent on suggesting continuity with the Thatcherite paradigm
and distancing themselves from the “failed world of Old Labor,” by making clear that “good
government” was “minimal government,” and that it was important to recognize that “choices
are constrained; there are no panaceas, and the solutions adopted by left and right may often
overlap” (Tony Blair, speech to the BDI, Bonn, Germany, June 18, l996—cited in Hay and
 26

Watson l998). With his discussion of the “third way,” moreover, Blair sought to convince the
electorate that his was an approach which was somewhere between the neo-liberal right and the
old socialist left, which embraces the ‘risk society’ resulting from globalization, and provides a
new politics of the radical center, with an active, inclusive civil society, in which one must
reconstruct the state, rather than shrink or expand it (Featherstone l999).
But what then of the normative aspects of the discourse? The “third way” has been
Blair’s attempt to differentiate himself from both Thatcher’s ideological appeal to the values of
individualism and laissez-faire capitalism and old Labor’s appeal to values of equality,
community, and socialism. Thus, he has argued that it sets a new course “between conservatism
and progressivism,” takes a progressive course which distinguishes itself “from all
conservatisms, whether of the left or the right,” and ensures that “after a century of antagonism,
economic efficiency and social justice finally work together” (Speech to the Labor Party
Congress, Bournemouth, Sept. 28, l999). Moreover, while Blair has continued to espouse neo-
liberal values with regard to the structure of the economy and work, he has not parroted Thatcher
with regard to welfare values, even as he has altered the structure of welfare in a neo-liberal
direction by introducing workfare for social assistance recipients and tuition fees for students in
tertiary education and by continuing means-testing in social assistance and going further with the
introduction of the market into pension systems (see Schmidt 2000b). But for Blair, this was to
reverse “social exclusion”and foster social mobility, and therefore constituted taking positive
action to “promote opportunity instead of dependence” through education and workfare as
opposed to the Conservatives’ mainly negative action with regard to the “dependency culture”
focused on limiting benefits and services. Blair’s extension of neo-liberal notions of
individualism and responsibility to the welfare state represents something of a return to the
original Beveridgean vision, and a reversal of Old Labor’s desire to move to a more social-
democratic vision. As such, he provided a theory of why the welfare state should not be
developed further, since it was not to be socially supportive but only enabling, as a “trampoline”
rather than a “hammock.”
Equally interesting is the fact that where Blair has been more “socialist” or redistributive
in his policies, by raising the level of social assistance and by instituting a minimum wage for the
first time ever, he has instituted these seemingly “by stealth,” since they have had must less
attention in the discourse (see Rhodes 2000). Nonetheless, this suggests that at the same time
that Blair reinforced neo-liberal values of individual responsibility and the virtues of the market
 27

by promising to put the poor to work, he has also tapped into the public’s “socialist” values (as
reported in the public opinion polls) and its discomfort with the Conservative government’s
moralizing about “the feckless and the idle” and seeming lack of concern about rising poverty,
by being a little more compassionate about the lot of those who cannot for whatever reason
become part of the “active society.”
In Britain, in short, one policy paradigm, the neo-liberal, and one discourse, the
Thatcherite, has predominated since l979. Although it may have taken Thatcher some time to
win the public and the politicians over to her view, she largely succeeded, as evidenced by the
fact that her Tory successor Major continued her neo-liberal program with a somewhat kinder
and gentler Thatcherite discourse, and that “New Labor” under Blair has picked up the neo-
liberal baton, renewing the Thatcherite discourse while giving the policy program new élan
rather than rejecting it. Blair’s approach may be Thatcherism with a human face, given the
greater (at least verbal) attention to the poor and dispossessed, but it is still Thatcherite in its
support of a more liberal, open, and market-oriented economy and its acceptance of a more
restricted socio-economy. And with this Thatcherite legitimating discourse, successive
governments have for better or for worse managed to convert the country without the kind of
disruption faced by France in the l990s and, arguably, with less public dissatisfaction.

CONCLUSION
France and Britain, in conclusion, had different experiences with regard to neo-liberal
reform despite being a matched pair of cases in terms of precipitating events, given profound
economic crisis in the late l970s and early l980s; in interest configurations, given splits between
left and right and capital and labor; in institutional context given single-actor systems; and in
discursive process, given the elaborateness of their communicative discourses. Much of this is
due to differences in the legitimating discourse. In Britain, the Thatcherite neo-liberal discourse
exerted a causal influence in policy change, by altering perceptions of interests and transforming
values to such an extent that the Tories were able to remain in power for eighteen years; and the
only way the Labor party could win power was to adopt major elements of the neo-liberal
discourse along with the policy program. In France, by contrast, the discourse exerted no such
causal influence, as governments of the right and left until Jospin constantly traded power, and
resorted to giving lipservice to the defense of traditional values while seeking to buy off
interests—something which worked in the l980s but not the l990s.
 28

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FOOTNOTES

1
It is also important to note here that the public protests related to cutbacks in the welfare state
have generally not been focused on EMU, which people seemed to have largely accepted.
Opinion polls have found that 58% (vs. 34%) of the French accept that monetary integration
justifies sacrifices such as the reduction of public spending and public debt. (Schwok l999, p.
63).
2
Blaming the victim and appealing to narrow middle class self-interest was admittedly easier in
Britain than in France, given that the French welfare system provided more coverage for more
citizens at a higher level with a wider range of services than the more modest British welfare
system, which tended to encourage a split between the “haves” and the “have-nots” (see Levy
2000; Rhodes 2000; Schmidt 2000b). This was not the case for health and education, however,
which were as much middle-class entitlements in Britain as in France.
3
This was actually another case of a successful discourse, when the Labor government managed
to persuade the unions—if ever so briefly—to “give a year to Britain”and to rally to the spirit of
Dunkirk, in agreeing to moderate their wage demands through “incomes policy” in the interests
of the country (see Schmidt 2000b).
4
In a survey of British social attitudes, whereas those polled continued to agree that the
government should provide for health care for the sick (98% in l985 and l990) and for a decent
standard of living for the elderly (97% in both years), they showed an erosion in support of
 34

government responsibility to reduce inequalities in income between rich and poor (81% in l985
down to 77% in l990) or to ensure employment to all those who wanted one (68% down to 60%).
(Taylor-Gooby 1991).