David Dimbleby: I thought the free market was with us forever - then Trump came along

I remember 1974 well. With inflation on the rise, the government had been locked in battle with trade unions over worker pay. The government appeared paralysed: stand up to the miners and strikes could shut down the power system, but give in and pay them more money and inflation would rocket.

And then the global oil crisis came out of nowhere. It threw economies, including Britain's, into chaos. The government introduced a three-day week. Power cuts were common - we would be plunged into darkness without warning. And seemingly, the government just expected us to deal with it.

This was also the year I began presenting the BBC's current affairs programme Panorama. We spent a lot of time debating these issues. People came on with all kinds of different ideas of what to do.

There were even suggestions that what the country really needed to take back control from the unions was a military takeover - a coup.

There was another idea out there too. It was proposed by the Conservative politician Keith Joseph and was entirely radical - so removed from the mainstream, in fact, that during filming of Panorama, Joseph turned to the production team and asked exasperatedly if they understood what he meant.

That idea was the free market.

This meant Britain departing from the post World War Two consensus that government should control the economy and that instead if you left the markets alone, they would deliver the country greater prosperity and security.

If, in 2025, the idea sounds anything but radical, that's exactly the point.

What we saw in the UK in the 1980s under Margaret Thatcher's government was just how quickly the free market transitioned from a radical idea into the new reality. Then before long it became what many assumed was the system that would last forever.

US President Donald Trump is a billionaire businessman who has clearly done well financially out of capitalism. But suddenly, thanks in part to him, the free market system finds itself under assault like never before.

It might yet weather the storm. However others are asking, is the free market system fatally flawed and doomed to failure?

So much of what Thatcher did in the wake of her 1983 general election victory seems so obvious now. We take it for granted that private companies play a pivotal role in providing our water, electricity, gas, railways, ports and freight.

But at the time few believed it possible to do what she had done - it seemed like a fantasy world, completely detached from how things had been done post war.

I was six when the war ended. There was rationing – coupons that allowed you to buy meat or clothes, or of course, sweets. But out of these hard times and on the heels of victory, a new vision of society was emerging in Britain.

With Clement Attlee's landslide election victory in July 1945, for the first time in Britain's political history a majority cast their votes for a party ostensibly dedicated to socialism.

But more than that, a new consensus on how the country should run emerged, with those leading the Labour and Conservative parties singing from a broadly similar sheet.

"We have built our defences against want and sickness, and we're proud of it," was uttered not by a Labour prime minister but by Harold Macmillan, Conservative prime minister from 1957 to 1963. This had been how things were done.

However not everyone bought into the consensus. Antony Fisher, who was a chicken farmer, was exasperated by what he saw as the meddling of the Egg Marketing Board. He set up the Institute of Economic Affairs think tank, inspired Keith Joseph and he in turn got Thatcher's ear.

That the current assault on the free market is coming, in part, from a Republican US president seems all the more ironic given how popular Thatcher's reforms were with the American right.

Thatcher and President Ronald Reagan shared a similar world view, and Trump has spoken of his admiration for the two, albeit with the caveat that he didn't agree with some of Reagan's trade policies.

Thatcher was convinced that the country would be much better off if gas and water and electricity were taken out of the hands of the state. And sold on the open market. The free market. Just like buying a loaf of bread.

The Thatcher government's big idea was that they weren't just going to sell the shares in state-owned utilities to big businesses or investors. They were going to offer them to the British people.

In December 1984 shares in British Telecom (BT) went on sale. The next morning, the numbers were staggering: more than two million Britons were now BT shareholders.

And Thatcher began to realise that selling off these companies wasn't just about breaking the shackles of government control. It could be something bigger - turning every person in Britain into a capitalist and in doing so making capitalism popular.

In Britain, by the end of the 1980s, the scale of transformation was staggering. The sum of £60bn was raised by selling off state run companies. Up to 15 million Britons were now shareholders.

Britain was embracing the free market. This wasn't just an economic shift. It was a cultural revolution. A redefinition of Britain's relationship with money, with government, and with itself.

And if Thatcher's privatisation had given ordinary people the chance to buy shares, her reforms to Britain's financial services sector in 1986, known as the Big Bang, gave ordinary people the chance to sell them too, to get a job in the previously closed world of the City.

There were many on the left for whom the principle alone of these reforms was something to object to. The assault on the free market from some on the right is not about the principles of the reforms, but the consequences.

At the core of Thatcher's thinking was a belief that free market capitalism could work only if many people had a direct stake in it. And with share ownership of previously state run utilities, many people did. But before long, alarm bells were starting to be rung. And their chime has only gotten louder.

James Goldsmith was a businessman who had made a fortune by buying struggling companies cheaply, reshaping them to maximise efficiency and then selling them at a profit. The 1980s reforms were like manna from heaven for him.

But then he seemed to change his mind about things. In 1994 he told a committee of US senators that its premise contained a fatal flaw - that the system demanded maximum profit but to achieve maximum profit that meant severing the umbilical link with many of your own electorate.

"You get to a system whereby, to get the best corporate profits, you have to leave your own country. You have to say to your own sales force 'Goodbye, we can't use you anymore - you're too expensive'.

"You've got unions. You want holidays. You want protection. So we're going offshore."

Goldsmith was predicting that companies would take their business wherever they would make the most money. If you are a CEO answerable to shareholders that's literally your job description. And the result, he said, would be job losses in the West, with communities collapsing.

And to make things worse, he argued that Britain had ceded sovereignty to the likes of the European Union and the World Trade Organization, with Britain binding itself to an economic system run by unelected bureaucrats in Brussels, only adding to the sense of alienation felt in collapsing communities. And with global markets dictating policy. If an industry wasn't profitable, it was left to die.

Today, the UK may be a global leader in science and financial services but is that of much consolation to communities where we once made things that are now made offshore?

Based on what I often heard in my many years touring the country presenting Question Time, I'm not sure it is.

Goldsmith would end up trying to go into politics. His Referendum Party was trounced in the 1997 general election but he had planted a seed. He had argued that the global free market path that Britain and the rest of the world was going down was dangerous. That it would spread division around the world.

Fast-forward nearly 20 years to 2016 and his warning came to pass. Britain voted to leave the European Union and the verdict could not be clearer: the Leave vote was highest in those left-behind communities, seemingly fuelled by those who felt globalisation was not working for them.

The dream of a nation of shareholders has soured too.

In 1989 Thames Water was privatised. We were promised lower bills, better infrastructure, less red tape and investment in a system fraying at the edges. It was investment that the global capitalist system was supposedly best placed to provide.

What followed was something else entirely. Debt ballooned and dividends flowed to shareholders. The company extracted profit while pipes leaked and sewage poured into rivers. And our bills now pay for interest on that debt - it feels like we've come a long way from Thatcher's nation of shareholders.

Back in 1994, James Goldsmith had posited that the problem with the free market dream was that it didn't protect the home base.

Now, there is someone else much more powerful who takes that view.

President Trump's methods are so erratic that with him it's hard to tell what is going on. His readiness to slap hugely consequential tariffs on countries that are both traditional foes and supposed friends at times defies easy explanation.

But what we can say is that he is trying to return to ideas that preceded the free market. He is trying to make America strong through protectionism, making it harder for anyone to simply sell anywhere.

There is an argument that if you take the long view then perhaps the free market period is the outlier. Britain itself had a long, long period of protectionism before it embraced free trade.

Tariffs are nothing new in world economic history and in a sense Trump is just trying to return the US to how things were, albeit in quite a chaotic way.

The reign of the free market is facing its biggest ever challenge. But that challenge is coming not from supporters of socialism who ideologically back a big role for the state. Instead, the challenge is coming from Trump, a man who is broadly speaking of the right and has no qualms with capitalism allowing people to become very rich.

That the challenge is coming from within is what makes it so potent.

Top image credit: Getty Images

BBC InDepth is the home on the website and app for the best analysis, with fresh perspectives that challenge assumptions and deep reporting on the biggest issues of the day. And we showcase thought-provoking content from across BBC Sounds and iPlayer too. You can send us your feedback on the InDepth section by clicking on the button below.