The Limits of Economic Liberalism under Thatcher: The Cases of Aerospace and Defence Procurement

It has already been established that there was no simple relationship between ‘neoliberal’ ideas and Thatcher’s polices in government. This paper shows how ‘neoliberal’ arguments expressed outside of the state directly contradicted Thatcher’s choices in government when it came to aerospace and defence procurement. The Thatcher governments are broadly cast as dismantling the national economy that was crucial to the politics of the post-war period. This paper shows how aerospace and defence procurement were cordoned off from this free-market revolution. It demonstrates how the Thatcher governments backed UK and European projects rather than alternatives from the United States, despite a growing internal desire to rationalise the United Kingdom’s defence sector. In these areas of policy, the UK Treasury, the key finance and economic ministry inside the British state, was far more consistently liberal than Thatcherite ministers. The paper also charts how there was little public criticism of these decisions, especially with the Labour Party advocating an autarkic defence policy in the context of a decline in manufacturing employment. The conclusion emphasises that in order to understand the shift towards free markets and away from the national economy in the post-war United Kingdom, we must look at debates inside the state, where crucial debates took place, often hidden from view.