Thatcher's Therapeutic State?

I had an interesting conversation with a British journalist once about whether it was better to describe Margaret Thatcher's economic views as anti-state or anti-union. That old chat came back to mind when I read the maverick Marxist Brendan O'Neill's argument that welfare payments were a weapon of sorts in the battle against labor militants:

The welfare state, still so beloved of many left-wing radicals, has cynically redefined huge swathes of the British population as sick rather than unemployed. As one striking study points out, in the last 20 years of the twentieth century, from 1981 to 1999, the number of individuals of working age in Britain—mostly men aged 16 to 64—who were claiming Incapacity Benefit (IB) rose exponentially. IB is the social security benefit paid to individuals who are 'unable to work because of ill-health, injury or disability'. In April 1981, 463,000 men of working age were receiving IB; by April 1999, that had risen to 1,276,000. It rose every single year between 1981 and 1999, apart from 1997. In addition, 710,000 women were receiving IB, meaning that at the start of the new millennium, more than two million people of working-age in Britain were defined as 'unable to work.'

As the authors of the study point out, this increase in 'incapable' people was not linked to real health problems; 'the general standard of health in the population is known to be improving.' Rather, the rise and rise of the incapacity category from the 1980s to today has occurred in tandem with the routing of trade union militancy by the Thatcher government, the demise of working-class politics, and the subsequent treatment of the unemployed as objects of pity rather than potential fury….

Many claim that successive governments cynically ratcheted up the IB numbers in order to make the overall unemployment figures look better (IB claimants are not officially counted as unemployed). No doubt there's some truth in that, but more fundamentally the redefinition of much unemployment as incapacity spoke to a shift in the balance of power between organisations that represented workers and the state, and to the demise of class politics and its replacement by new therapeutic relations between the state and the individual. Increasingly, individuals, especially in collapsed industrial towns or areas of poverty, are actively invited by the welfare state to define themselves as pathetic and useless and unable to exist without financial and emotional handouts.

The study he's citing is "Incapacity Benefit and unemployment," by Christina Beatty and Stephen Fothergill, published in Work to Welfare: How Men Become Detached from the Labour Market (Cambridge University Press, 2000).