27 SEPTEMBER 1997, Page 14


Peter Bauer denies the truth of the

great cliché perpetrated both about the British — and by them

The author is professor emeritus of eco- nomics, London School of Economics. This article is extracted from his pamphlet Class on the Brain: The Cost of a British Obses- sion, published this week by the Centre for Policy Studies, 57 Tufton Street, London SW1P 3QL. In a foreword, Lord Lawson, former chancellor of the exchequer, writes of Lord Bauer: 'The immigrant son of a Hun- garian bookie, a former professor of eco- nomics of international repute and now a British peer, few could be better placed to examine, with the objectivity of an outsider and the insight of one who has made his home here for more than half a century, the popular thesis that our suffocating class sys- tem is an impediment to Britain's economic progress and social harmony.'

IN December 1975, the then West Ger- man chancellor, Herr Schmidt, remarked of Britain, 'As long as you maintain that damned class-ridden society of yours you will never get out of your mess.' For many years now, politicians, journalists and aca- demics have blamed on the class system just about every form of economic adversi- ty or social malaise in Britain. Even the last Conservative prime minister sub- scribed to this prejudice; when John Major accepted the leadership of his party, he famously declared: We aim for a classless society: not in the grey sense of drab uniformity, but in the sense that we remove the artificial barriers to choice and achievement.

The allegations misconceive the charac- ter of British society and the nature of eco- nomic activity. They also ignore simple and undisputed facts of British history and of British social, economic and political life. And the repetition of such false claims encourages a sense of passivity and disaf- fection among the nation's youth. If the poor are told that they will never be able to reach the top of the mountain, why should they ever start climbing?

According to the stereotype, Britain is governed by a rich ruling caste. Yet Dis- raeli was prime minister from 1866 to 1868 and 1874 to 1880; Lloyd George, a very poor orphan brought up by an uncle who was a shoemaker, was chancellor of the exchequer by 1908, and prime minister from 1916 to 1922; and Ramsay MacDon- ald, the illegitimate son of a fisherwoman, was prime minister in 1923-24, and from 1929 to 1935. More recently, of the con- tenders for the leadership of the Conser- vative party in 1997, Mr Clarke, Mr Hague, Mr Howard and Mr Redwood all went to state schools and were, respective- ly, the sons of a watchmaker, a small busi- nessman, a Romanian refugee and a cost accountant.

British industry is managed, and has been managed for decades or even cen- turies, by new men, people who have made their own way, often from humble begin- nings. In the interwar period, the leading figure of the British motor industry was Lord Nuffield, who began as a bicycle repairer and had had very little education. Today, the richest man in Britain is, according to the Sunday Times's 'Rich List' of 1997, Mr Joseph Lewis. He was born in the Roman Arms, a pub in the East End of London, where his father was landlord.

At least 20 of the top 100 richest people in the Sunday Times list are self-made. They include Jack Walker, the steel mag- nate; the Barclay twins, who started their professional life as decorators; Ann Gloag, a former nurse, who founded the bus corn- `Will you marry me, so that I can afford to be in the Labour Cabinet?' pany Stagecoach with her brother Brian Souter; the musician Paul McCartney; the former Smithfield meat trader, David Thompson, who founded the Hillsdown food and furniture group, and Trevor Hemmings, a former apprentice bricklayer who now owns the largest stake in Center Pares and Pontins. Indeed, it is striking that there are six sons of coalminers in the list of the richest 500 people in Britain. All in all, only 3.1 per cent of the richest 500 peo- ple in Britain inherited their wealth.

The higher civil service is often thought of as the exclusive preserve of the upper and upper-middle classes, at any rate before the second world war. But the first Lord Stamp of Shortlands (1880-1940) began as a clerk in the Inland Revenue in 1896. He reached a high position before he retired young, moved into industry and became a director of the Bank of England and chairman of the largest British railway company. A more recent example of how humble birth is no barrier to advancement is the career of Sir Terence Burns. He is Permanent Secretary at HM Treasury, yet he was born in a council house in the pit village of Hetton-le-Hole in Tyne and Wear.

The world of the arts and entertainment has also been open to men of talent: Sir Roy Strong was the son of a struggling commercial traveller and was appointed director of the National Portrait Gallery at the age of 32, then director of the Victoria and Albert Museum when he was only 39. Similarly, John Birt was born in Bootle into an extended family of Liverpool dockers, yet became director-general of the BBC by the age of 48. And Melvyn Bragg, the tele- vision presenter and director of London Weekend Television, was born and brought up in the family pub in Wigton, Cumber- land.

Class domination of the British army before the second world war is often thought to be so self-evident as not to be worth discussing. But for most of the first world war the chief of the Imperial Gener- al Staff was Sir William Robertson (1860-1933). Robertson was the son of a landlady and enlisted as a private in the 1880s. He published his memoirs under the title From Private to Field Mdishal. For most of his life he dropped his aitches. Similarly, the Church of England has often been criticised as being dominated by the middle classes, yet George Carey, the pre- sent Archbishop of Canterbury, is the son of a hospital porter. He was born in the East End of London and left school at the age of 15.

These are not isolated examples. Promi- nent writers and scholars have recognised for well over a century the extensive social mobility in Britain, and especially in British economic life. Tocqueville commented on the ease of entry into the British aristocra- cy in the 19th century, and the rise of new men in society and in business has often been noted at length by academics and oth- ers. Work by Dr John Goldthorpe of Nuffield College, Oxford, has revealed that more than a quarter of those in the man- agerial and professional classes today had fathers drawn from a manual and working- class background.

There have been few class barriers to access to wealth and management in Britain. But after the second world war British economic society did become less open and less flexible than it had been in the past. It needed the reforms of Mrs Thatcher's governments to reopen the road of opportunity.

In Britain the establishment and devel- opment of many businesses from small beginnings had become much more diffi- cult by the 1970s. This was the result of the nationalisation of many activities, widespread licensing, far-reaching bureau- cratisation and heavy taxation, both of per- sons and of small businesses. In addition, housing policy (primarily rent controls), trade union restrictions, minimum wages, so-called employment protection and closed shops all reduced mobility both directly and, by making it more difficult to start new businesses, indirectly.

These policies and measures made it dif- ficult for people to rise from poverty to prosperity by means of legitimate business activity. Many gifted working-class children (as well as many other people) had the capacity to establish and run small busi- nesses, but not the aptitudes or qualifica- tions of a successful bureaucrat, nor the skills required to succeed in a bureaucratic society.

The reforms of the last 18 years removed many of these barriers: privatisation, the restraints imposed on the trade unions, deregulation, the sale of council houses and the great reduction in income tax have all helped to create an environment in which talented people have been able to succeed.

British society has for centuries displayed acute awareness of fine distinctions. The difference between a CB and a CBE is recognised to this day throughout the civil service, and often beyond it. In matters such as education, speech and dress, many freely and widely accepted distinctions are related to social standing and class. In this sense Britain has indeed always been a class society. But for about eight centuries Britain has not been a closed society, much less a caste society.

Britain has not had a closed aristocracy or nobility since the early Middle Ages. Marriage, money, services or official favour enabled many aspiring members of the working and middle classes to enter the aristocracy, including the highest ranks. Wolsey was the son of a Yorkshire butcher. Queen Elizabeth I was descended from a serf.

Until well into the 19th century, Catholics, Jews and Nonconformists could not enter politics or, for that matter, Oxford and Cambridge universities. The restrictions may, therefore, have contribut- ed to the conspicuous role of the Noncon- formists in the development of British industry and commerce, notably in such activities as banking, brewing, engineering and textiles. In the 19th and 20th cen- turies, the Nonconformists were joined by the Jews. Their economic success shows how misleading it is to think that exclusion from political activity necessarily inhibits the economic prospects of a person or a group.

The presence and the unenforced accep- tance of social distinctions and differences, including small differences and fine dis- tinctions, were the outcome of centuries of relatively peaceful history. And, in an open and mobile society, such differences and distinctions do not restrict talent or inhibit economic progress. In fact, they rather promote ambition and achievement because they offer inducement, something to go for, at all levels of society.

The British upper classes usually absorb new men very easily. Indeed, the new recruits soon become indistinguishable from the class into which they have been recruited. After only a single generation, persons of working-class origin can merge completely into the aristocracy. When Granada recently announced its plans for a hostile takeover of the Forte group, much was made of the fact that the chairman of Granada, Mr Gerry Robinson, was one of nine children of an Irish carpenter. Yet Rocco Forte's father had arrived in Eng- land a poor man and started the Forte empire with one milk-bar in Regent Street.

But the prolonged and largely unques- tioned acceptance of differences and dis- tinctions also made for vulnerability, in that the upper and upper-middle classes were not forced to examine or rationalise their position. They were thus ill-placed to face the upsurge of egalitarianism in the Western world. Their spokesmen or repre- sentatives knew and, perhaps, could even articulate the distinction in rank between a baron, a baronet and a knight, or even between a CB and a CBE, but not that between a differentiated yet open and mobile society on the one hand and a restrictive, closed or caste society on the other.

The resulting loss of poise and nerve was accentuated by the emergence of a guilt feeling over the presence of differences, in the face of growing belief that all such dif- ferences are abnormal and reprehensible.

But whatever the reasons behind the misleading stereotype of the class system, its widespread acceptance has sustained policies which are restrictive, which obstruct economic achievement and advance, and which cause resentment and even bitterness. The large-scale, politically enforced reduction of social economic dif- ferences serves only to exacerbate another difference, namely that between rulers and subjects. Tony Blair would do well to bear this in mind.