The recent annual conference of the British Conservative party has been widely described as a break from the Cameron years. This is hardly surprising; David Cameron’s six-year tenure as prime minister of the United Kingdom ended in spectacular failure, and Theresa May, his successor, would naturally want to portray herself as betokening significant change. But her premiership may represent more than just an abandonment of David Cameron’s legacy. May and her new brand of “centre ground” Toryism may represent a significant departure from the legacy of Margaret Thatcher herself. Perhaps more importantly, May’s embrace of nationalism, statism and nativism may signal that her party is willing to abandon – or at least qualify – a forty-year commitment to hard-line neoliberalism in response to the right-wing populist surge. If that is the case, then May’s arrival could signal not just a major change for the Conservatives themselves, but the first major defection from the free-market consensus that has defined the contemporary centre-right. The Tories may become the first mainstream party in Western Europe to adopt the nationalism and protectionism of that consensus’ most vocal opponents.

Firstly, what do I mean by the “neoliberal consensus”? Neoliberalism has many definitions. Some relate to what neoliberals do – Naomi Klein associates them with her “shock doctrine” and specific policies, namely “deregulation, privatization and austerity”. David Harvey describes neoliberalism in terms of whom it benefits, as a “as a political project carried out by the corporate capitalist class as they felt intensely threatened both politically and economically towards the end of the 1960s into the 1970s.” Philip Mirowski suggests that neoliberalism involves having a sort of quasi-religious faith in the market’s ability to allocate resources and produce optimal outcomes. At the same time, capital reserves the right to suspend the markets and invoke state aid in times of crisis, a concept he identified with Carl Schmitt (“sovereign is he who decides on the state of exception”).

From this, I offer two closely interlinked definitions of neoliberalism. The first is that it is an ideology which deems the markets the most efficient and most ethical means of allocating resources, and assigns the state the role of enforcing and extending their rule. The other, pace Mirowski, is that capitalists, in the sense of people who own capital, possess the right to allocate resources and to structure the state, usually (but not always) through markets. The first definition locates sovereignty in the market; the second in capital owners. I think both these models coexist in practice; on the one hand, capital owners can and do suspend markets to save themselves, as they did in the 2008 bailouts. On the other hand, the neoliberal globalization model has created a world-spanning market that may be beyond anyone’s ability to suppress.

Thatcherism itself contained a tension between Thatcher’s commitment to the sovereignty of markets and her commitment to the sovereignty of the nation. Mark Vail argues that the party tried to reconcile these tensions by casting the European Union as a national enemy, in part because they saw it as social democratic and collectivist. (Vail also notes that this became increasingly incorrect, but that Cameron continued the Eurosceptic tradition as a way of binding together the winners and losers of his austerity policy.) Perhaps the Thatcherites saw the EU as a “government,” and the nation-state as a sort of “individual,” a rational economic actor in a world of other “individual” nation-states that looked like the domestic market. In any case, the Conservatives remained mostly loyal to neoliberalism domestically; the Cameron-Osborne era was defined by austerity, another word for Klein’s cuts, as well as privatizations. The Conservative-led governments of the Cameron era also reduced workers’ access to protective regulations; for example, they imposed costs for bringing cases to employment tribunals.

So how much of a departure is May, and why is it important? Perhaps the most consequential statement May has made was her statement that she would sacrifice full access to the single market in favour of reintroducing border controls and escaping the jurisdiction of the European Court of Justice. This signalled that she was placing a specifically national interest above that of either markets or large parts of the capitalist class. Much of the latter would prefer to retain access to the single market.

Admittedly, many hard-core Conservative Thatcherites want to be completely shut of the single market to avoid bothersome EU regulation and create some sort of export-warrior, buccaneering into Chinese markets. But that would not include much of the financial services sector, which is a key – perhaps the key – component of the neoliberal economic and political order.

Furthermore, May and her government have made a number of signals that they want to abandon other neoliberal shibboleths. Free-marketeers have a variety of views on migration, but are generally quite open to that of students and skilled immigrants, who after all are showing adaptability to market demands. May’s home secretary, Amber Rudd, nevertheless proposed restricting student numbers and considered compelling businesses to reveal how many foreign workers they employ (though this was later abandoned). The new chancellor of the Exchequer, Philip Hammond, eased – but did not end – the austerity policies he inherited from George Osborne. Both he and May discussed increased infrastructure spending, especially in the regions; Hammond went so far as to admit that “fiscal policy may also have a role to play,” implying at least a mild break with orthodox Treasury economics.

Among May’s weightiest departures from the neoliberal consensus have been her attacks on the primacy of domestic business elites. May has proposed binding shareholder votes on executive pay. More radically, she has proposed worker and consumer representation on corporate boards. To give you an idea of the scope of that departure, the last time anyone suggested this, Jim Callaghan was prime minister. Her government may prevent mergers designed to allow the newborn corporation to avoid taxation.

So it is clear that May is interpreting the Brexit vote as a rejection not just of the European Union, or of immigration, but also, to some degree, of neoliberalism and even liberalism full stop. The late 20th-century saw the emergence of a global liberal consensus, especially in economics, though also in terms of some social liberal values, such as an acceptance of the intrinsic legal and moral equality of persons and the primacy of individual rights over collective orders, traditions and hierarchies.

Hans-Georg Betz pointed out, this created economic winners and losers. The “modernization losers” – the people who lose out from globalization. Usually, these are the less educated; males; working-class or lower-middle class; authoritarian; and in some countries, found in peripheral areas. Often, they are involved in occupations which are highly routinized. The “modernization winners,” very broadly, are the middle classes, divided on occupational, socioeconomic, and values grounds, alongside some parts of the working classes that have jobs that allow them to compete in the globalized economy.

Typically, the modernization winners support the mainstream centre-right or various parties of the mainstream centre-left, while modernization losers grow increasingly loyal to populist, anti-system parties, mostly on the radical right. Those parties that favour the neoliberal mainstream have become increasingly distinguishable from those that do not. Recent German elections have shown such a pattern – the right-populist Alternative fur Deutschland notches up 10-25 percent of the vote in Land elections, while mainstream voters flit between the Christian Democrats, Social Democrats and Greens, selecting whichever seems most electable. In the UK, of course, these working and lower-middle class voters form the core of UKIP voters. They may be former social democratic or communist voters, or former conservatives, or non-voters expressing protest votes.

Populists embrace a variety of economic models, and some right-populists favour neoliberalism if they perceive welfare as mainly benefiting immigrants or the lazy. Geert Wilders’ Party for Freedom (PVV) is pro-austerity, at least at the moment. Increasingly, however, right-wing populists (and all left-wing ones) defend the welfare state. Instead, they focus on a protectionist, statist model which would see greater state investment and state preference for native workers; trade and capital barriers; and the securing on welfare services for the non-immigrant population as a matter of (ethnic) citizenship.

We can start to see the outlines of a political division based on the conflict between two models. The first, the neoliberal model, assigns the market primacy. It embraces globalization; resists collective identities; opposes redistribution except in very targeted, limited forms; and is comfortable with a certain degree of social liberalism and individualism. Many social democratic and green parties offer, or end up administering, neoliberal policy models: the “Third Way” accepted market primacy, even if it placed more emphasis on certain forms of public investment and anti-poverty programmes.

The other model is what we might call the national or nativist protectionist model. It gives primacy to the nation, and is strongly populist (in that it doesn’t refer to classes or interest groups – think of the constant refrain about the “ordinary working people”). It defines the nation in nativist, ethnic or cultural terms, and is hostile to immigration; opposes globalization, or at least seeks stronger defences from its consequences; and often favours some sort of reconstitution or preservation of the welfare state. Given the working-class base of many populist parties, it is unsurprising that the national protectionist model bears some resemblance to social democracy; with the decline of actual social democracy, the old inclusive welfarist model is being reformulated in national terms.

What is unusual about Britain is that, here, the mainstream conservative party was historically split over the question of European Union membership. Elsewhere in Europe, neoliberalism and EU membership go together neatly; in Britain, the Conservatives either saw the EU as not sufficiently committed to the idols of Hayek and Friedman, or too consensual in their politics, or simply as foreign. That division created a common ground between a mainstream centre-right party and the modernization losers that doesn’t exist elsewhere. The first-past-the-post system also militates towards the reconciliation of these two camps.

What was unexpected was that May would break with neoliberalism – admittedly, so far gingerly – to do exactly that. In contrast with the Republicans in the United States, who were overwhelmed by a protectionist surge from below, May is attempting a top-down synthesis of Conservative mainstream thought and right-wing populism, perhaps drawing on the “one-nation Tory” tradition. Vail cites the continued relevance of this heritage in his work, noting that Cameron felt bound to draw on it rhetorically even as he constructed an iron cage of austerity around the public sector. Anthony Barnett describes her premiership as a shift from the neoliberalism of the Murdoch press to a sort of class-less populist nationalism in line with The Daily Mail. We have seen mainstream parties appeal to anti-immigrant sentiment before, for many decades – Thatcher did so in the late 1970s. But May’s departure from neoliberal orthodoxy assails some of that orthodoxy’s chief interests: She is attacking some of the elites and interests that are central to the Thatcherite project, or at the very least rendering their demands (especially those of the City) secondary to those of the “ordinary working people.” This is perhaps a first for a centre-right party in Western Europe.

This means that May is in fact very different from the other female leader to which she is compared. Angela Merkel has made very few moves to accommodate anti-immigrant and right-wing sentiment. Rather, the appropriate comparison, albeit from the opposite side of the mirror, is with Marine Le Pen. Her policy of “de-diabolisation” can be read as an attempt at reconciliation between modernization losers and the liberal mainstream from the camp of the excluded, one which adopts elements of liberal philosophy and rhetoric.

Will this work? It is worth remembering that both Labour and the Conservatives have made repeated attempts at overtures to the socially conservative and the working classes. Contrary to popular belief, Labour pursued plenty of restrictive immigration legislation while in power, and Ed Miliband promised to control immigration. In both cases, these overtures had limited success. And the Cameron-era Conservatives could occasionally make gestures towards social solidarity, such as the “national living wage” legislation last year. The idea of the Conservatives being “the party of working people” predates the Brexit referendum; Robert Halfon has been a big advocate of this branding.

The key question is whether the Conservatives can make a credible play for the Brexit voters and, especially, UKIP voters. Cameron, Osborne and Miliband could never connect with UKIP voters and much of the working- and lower-middle classes because they were forever seen as part of the elite. This may be partly because their attempts at reconnection mainly focused on restricting immigration; it was too easy to see them as insincere, and too easy for UKIP to “own” anti-immigration policies, as radical-right populists tend to do. By making a wider assault on neoliberalism, and by proving her credentials with some variety of “hard Brexit,” May could convince globalization’s victims that she feels their pain. She shares an advantage also held by Blair and Thatcher before her, a weak and divided opposition. UKIP’s recent application to join the Ultimate Fighting Championships can only help.

Whether it does or not will come down to a battle between two groups within the Conservative coalition – the neoliberals/Thatcherites who once cheered Osborne, and the working-class and lower middle-class Brexit voters who suffered at his hands. Should the latter win, the neoliberals will be effectively homeless, given the decline of the Liberal Democrats and the leftward shift by Labour. Their American counterparts might shelter under Hillary Clinton’s wing; the Thatcherites will simply become marginalized in their own party.

If May can pull off a hard Brexit, and if she and Hammond can give themselves enough flexibility in fiscal policy to avoid a recession, she might manage to bridge the gap between the mainstream centre-right and the modernization losers. This could cement their hold over a large working- and lower-middle class constituency, perhaps the largest they have ever managed to mobilize. More consequentially, it will mean that a key Western European party, and a major Western European economy, has rejected the neoliberal model of open borders and globalization. The nationalist alternative will have won its first major adherent, both in the universe of mainstream right-wing parties and in the set of major European economies.

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