The past may be, as L. P. Hartley wrote, another country, but it's rarely as foreign as Britain in the 1970s. Viewed from the United Kingdom of 2005, the day before yesterday is a banana republic without the weather. Inflation was up over 25 percent, marginal tax rates were up over 90 percent, and the only thing heading in the other direction was the pound, which nosedived so suddenly in 1976 that the chancellor of the exchequer, en route to an International Monetary Fund meeting, was summoned back from the departure lounge at Heathrow to try to talk his currency back up to sub-basement level. Her Majesty's government had itself applied for a $4 billion loan from the IMF. Were the Britain of thirty years ago to re-emerge Brigadoon-like from the mists, it would be one of those basket cases that Bono hectors Bush about debt forgiveness for.
Such great Britons as the era could muster—Roger Moore, Michael Caine—had decamped to Switzerland and Beverly Hills. As if to underline the national decline, every flailing industry flew the moth-eaten flag: British Steel, British Coal, British Leyland. They were all owned by the state—even the last, which was the national automobile manufacturer. The government had taken all the famous British car marques—Austin, Morris, Rover, Jaguar, Triumph—and merged them into one. That's right: the government made your car. Or, rather, a man called Red Robbo did, when he was in the mood, which wasn't terribly often. He was the local union man at the Leyland plant in Birmingham, though he seemed to spend more time outside the gate, picketing. In Britain union leaders were household names, mainly because they were responsible for everything your household lacked. In the seventies if you opened The Times (when the print unions weren't on strike) or watched the BBC news (when the miners weren't on strike and the government hadn't ordered the TV to close down mid-evening to conserve electricity), it was a parade of eminences from strange, unlovely acronyms such as ASLEF and SOGAT and NATSOPA and NACODS being received by the prime minister as if they were heads of state, which in a sense they were. Britain's system of government in the seventies was summed up in the phrase "beer and sandwiches at Number Ten"—which meant the union leaders showing up at Downing Street to discuss what it would take to persuade them not to go on strike, and being plied with the aforementioned refreshments by a prime minister reduced to the proprietor of a seedy pub, with the cabinet as his barmaids. The beer and sandwiches went only so far, and would usually be followed a day or two later by chaotic scenes on the evening news of big, burly blokes striking for their right to continue enjoying the soft, pampering workweek of the more effete Ottoman sultans.
The man who presided over the death throes of this ramshackle realm was James Callaghan, prime minister from 1976 to 1979, and an instructive study for all those obituarists of President Ronald Reagan who were so anxious last June to attribute his success to a genial disposition, sense of humor, charming smile, tilt of the head, etc. If you want to know what Reaganesque affability without political will or philosophy boils down to, look at Callaghan. He was famously avuncular; he was known as Sunny Jim. But by the time he and his Labour government left office, the sunniness had decayed into torpid complacency. His most famous words were "Crisis? What crisis?"—which he never actually said, but were put in his mouth by an enterprising headline writer from Rupert Murdoch's The Sun. And they fit so well that they stuck.
The non-crisis of the regime began in an attempt to control the endless ping-pong of runaway inflation and runaway pay increases to keep up with it. The government proposed a five percent limit on raises, with penalties for companies that flouted the limit. This sounded a bit low to the Labour Party's union allies, and the car workers decided that the very proposal was worth striking over. When Ford's UK subsidiary settled with a 15 percent increase, Callaghan attempted to impose penalties on the company; but Parliament declined to support him, and the unions set out to teach him a lesson. The municipal manual workers demanded a 40 percent wage increase and then struck. The truck drivers went on strike for a more modest 30 percent. The garbage collectors followed, and in parts of the country the gravediggers.
In January of 1979 the prime minister left for a summit in Guadeloupe, and on the news bulletins scenes from the coldest British winter in sixteen years, with the streets full of trash and the dead unburied, alternated with footage from the Caribbean of a relaxed Callaghan in open-necked shirt, working on his tan with the other colossi of the age—Jimmy Carter, Valéry Giscard d'Estaing, and Helmut Schmidt. To his shivering citizenry, Sunny Jim was spending too much time sunning himself. When he landed at Heathrow, he was besieged by the press and grumbled back, "I don't think that other people in the world would share the view that there is mounting chaos"—which The Sun's man so lethally distilled. Callaghan had a point: the "mounting chaos" of the so-called Winter of Discontent was, in truth, only a slightly more extreme version of business as usual.