Business: Manufacturing sector

Why are Labour and the Tories now both praising industry over finance? A book published 30 years ago offers some answers

There's one thing that the two main parties in this country seem to agree on. It is expressed in different ways, and with different degrees of sincerity. For Ed Miliband, it's a question of rewarding the "producers" in industry rather than the "predators" of finance capitalism; for George Osborne, "we need to start making things again". Yet there's no doubt that both the Conservative party and the Labour party presided over a massive decline in industry and "production"; both of them favoured finance and services over industry and technology. Now here is an apparent change of heart. What does it mean, this apparent divide between producer and predator, industrialist and speculator, this apparent desire to turn the long-defunct workshop of the world back into a workshop of some sort?

Answers might lie in a book published 30 years ago, which was once a fixture of British political debate – the historian Martin J Wiener's 1981 polemic English Culture and the Decline of the Industrial Spirit. This book was distributed by Keith Joseph to every member of Margaret Thatcher's cabinet. Joseph and Thatcher had a notorious "reading list" in the early 80s. Most of that list consisted of the classics of neoliberalism – defences of raw, naked capitalism from the likes of Friedrich von Hayek or Milton Friedman, the books that are often associated with an economic policy that decimated British industry.

Wiener's book was different. Not an economic tract as such, it was more a cultural history, and its apparent influences were largely from the left. A short analysis of English political and literary culture, the centrality it gave to literature evoked Raymond Williams; its insistence on the sheer scale of English industrial primacy showed a close reading of Eric Hobsbawm; and by ascribing industrial decline to England's lack of a full bourgeois revolution, it had much in common with Tom Nairn and Perry Anderson's 1960s "thesis" on English backwardness. In fact, Wiener seldom cited rightwing sources at all.

Wiener claimed that British industrial capitalism reached its zenith in 1851, the year of the Crystal Palace, its protomodernist architecture filled with displays exhibiting British industrial prowess. After that, it came under attack from both left and right – in fact, Weiner argues that the left and right positions were essentially indistinguishable. Whether ostensibly conservative, like the Gothic architect Augustus Welsby Pugin, or Marxist, like William Morris, opinion formers in the second half of the 19th century agreed that industry had deformed the UK, that its cities and its architecture were horrifying, that its factories were infernal, and that it should be replaced with a return to older, preferably medieval, certainties.

This horrified reaction to industry, and most of all to the industrial city, affected middle-class taste (and Wiener has it that working-class taste invariably followed suit) – the ideal was now the country cottage, and if it couldn't be in the country itself, then the rural could be simulated on the city's outskirts, as in the garden suburbs of Bedford Park or Hampstead, followed by the "bypass Tudor" of the early 20th century. The real England, insisted commentators of left, right and centre, was the country – despite the fact that, since the middle of the 19th century, a majority lived in cities.

What could the Conservative party possibly find to its taste in Wiener's line of argument? That becomes clear in the third of his points. British capitalism, he argues, had become fatally ashamed of capitalism itself. It was embarrassed by the muck, mess and noise of industry, negligent of the great northern cities where that was largely based, and embarrassed at being seen to be "money-grubbing".

Wiener, like many a leftwinger, argued that this came from the English middle class's love affair with its betters, the usually fulfilled desire of every factory owner to become a country gent, a rentier rather than producer. But he also suggested it came from a misplaced philanthropy, and a pussyfooting discomfort with making a profit from making stuff. In the form of the City of London's finance capitalism it had even found a way to make money out of money itself.

Now the book starts to sound like the Tory party we know today. British capitalism, it argues, needs to rediscover the free market, the profit motive and the "gospel of getting-on" that it had once disdained. Wiener's adversaries here become now-familiar Thatcherite punchbags – the BBC, for instance, an institution of paternalist arrogance which haughtily refused to give the public the money-generating entertainment it really wanted; or the universities, devoted to the lefty talking shop of the "social sciences" rather than robustly useful applied science. Enter David Willetts.

English Culture and the Decline of the Industrial Spirit divided the Tory party between those who welcomed this new swaggering capitalism – heirs to 19th-century Manchester liberalism – and those who really were Conservatives, who were horrified by this scorn for the country, old England, conservation and preservation. The Tory party still tries to balance these two impulses, rather ineptly – Grant Shapps praises garden cities and Philip Hammond raises the speed limit; David Cameron advocates concreting over the green belt and Michael Gove slates modernist architecture.

Yet there's a reason why nobody reads this book any more – because Wiener's central thesis was so resoundingly disproved. He predicts that in bringing back "market discipline", Thatcher would rejuvenate British industry and the "northern" values it inculcated – instead, the industrial centres of Tyneside, Clydeside and Teesside, south Wales and the West Midlands, Greater Manchester and the West Riding all faced a cataclysm on such a scale that most have still not recovered. Wiener might have praised cities and industry, but the former usually voted Labour, and the latter entailed strong trade unions. Neither point was to endear them to the new, swaggering capitalism.

The book faced a common fate for those who try to separate out finance and industrial capitalism, as if they could be prised apart. Britain is more obsessed than ever with an imaginary rural arcadia that bears less and less resemblance to the places where we actually live, but the profit motive has been strengthened in the process, not limited. It seems amazing at this distance to imagine anyone could have thought otherwise – a counterfactual Thatcherism that revived industrial Britain, with Heseltine's garden festivals as the new Crystal Palaces.

But what is especially bizarre about the current orthodoxy – from which none of the main parties are exempt – is that Wiener's attack on all but "useful" moneymaking activities is continued, without the concrete industrial products or technological advances that there was once to show for it.

There is a counter-theory, which has it that neither speculators nor small businesses are the real "wealth creators", but rather the masses who have nothing to sell but their labour. Their voice wasn't heard in Wiener's book, and it isn't heard in the current political debate.