RUTHFULLY YOURS

In 1978, with the British economy in crisis and unemployment hovering at 1.5 million, or 5.1% of the working-age population, Margaret Thatcher’s Conservative Party turned to its advertising gurus, Charles and Maurice Saatchi, to ram home the message that the socialist policies of the Labour government had failed. With garbage piling up in the streets due to public-sector trade union strikes, inflation rates of 24.2% in 1976 and 15.8% in 1977, and a sense of permanent, structural malaise settling over the nation, the Saatchis produced an iconic poster of a long dole line tailing off into the distance, under the message: “Labour Isn’t Working.”

The prime minister, James Callaghan, complained about the poster in parliament, and the chancellor of the exchequer, Denis Healy, complained about the Tories “selling politics like soap powder.” That guaranteed the poster further publicity, and the following year Mrs. Thatcher won the general election, a victory that the Conservative Party treasurer, Lord Thorneycroft, put down to the poster.

And now, three decades later, Mitt Romney has adapted the same image (with full attribution) for his campaign. “Obama Isn’t Working,” declares Mr. Romney’s poster.

The former Massachusetts governor is right to try to make unemployment the central campaign issue. No American president since Franklin Roosevelt has been re-elected with an unemployment rate higher than 7.2%, and the current rate is 9.1%. If one then adds the 2.5 million people who have been out of a job for so long that they are no longer looking for work, and the 8.7 million who are making do with part-time work but want full-time jobs, then that rate rises to a lamentable 16.5%. Small wonder, then, that Mr. Romney has turned to the stark visual image championed by the Thatcherites as he seeks to blame the president for the long dole lines.

There is an unintended irony here, in that once Mrs. Thatcher became prime minister and set about completely restructuring Britain’s unproductive and uncompetitive manufacturing industry, unemployment actually doubled to over three million (11.2%) by the time of the subsequent general election in 1983, which she won by a landslide. The British economy and people adapted themselves to the historically high unemployment rates, rightly considering them a necessary price to pay for a return to competitiveness and higher productivity. It took 20 years for the rate to fall back to the 1978 level.

If Mr. Romney wishes to wrap himself in the Thatcherite mantle, he might also, if elected, have to face the kind of rising unemployment that she did. One hopes that he has enough of her steely resolve to state, as she did: “There is no alternative” to deep reform. Because of course there was an alternative—that of Britain slipping into the moribund, almost Third World economic basket case to which Labour’s socialist policies had so nearly brought it.

A combination of ludicrously confiscatory taxation—98% at the top rate in 1979—and the economic dislocation that followed the quadrupling of the oil price in 1973, as well as a huge increase in the power of the (increasingly militant) trade union movement, created a perfect storm for the British economy that required the determination and willpower of a Margaret Thatcher to quell. Has Mitt Romney got the same mixture of guts, foresight and intellect that saw Mrs. Thatcher through, or is he just pinching a neat poster idea while ignoring the political and economic philosophy it represents?

Next year’s presidential election will be the most clearly Keynesian versus Hayekian contest in a generation. President Obama’s whole economic stance—his stimulus package, quantitative easing, bailouts, attempt to abolish the Bush tax cuts, and efforts to raise the debt ceiling—define him as a child of J. M. Keynes, who advocated solving economic woes by “priming the pump,” principally through government spending. The Republicans’ responses—especially Rep. Paul Ryan’s deficit-reduction plan—proclaim them the heirs of F.A. Hayek, who saw government as part of the problem, with private enterprise and the free market as its solution.

The subtitle of Nicholas Wapshott’s fine forthcoming book, “Keynes-Hayek: The Clash That Defines Modern Economics,” is only half the story, since that clash also defines modern politics, and never more so than in the forthcoming presidential election. The “Austrian,” supply-side economics of Hayek is fundamentally opposed to the demand-side, “Cambridge” economics of the Keynesians, and 2012 will decide to which the American people are wedded.

Whoever the Republicans choose as their candidate needs to get across the central message that America’s high unemployment is directly the result of decisions taken by Mr. Obama, rather than merely being a legacy of the previous administration. Time, and the stubbornly high monthly figures themselves, seem to be on their side in this. If they need Thatcher-era posters to achieve it—well, imitation is the sincerest form of flattery.

Mr. Roberts, a historian, is author most recently of “The Storm of War: A New History of the Second World War” (Allen Lane, 2009).