ANEURIN BEVAN And the Mirage of British Socialism By John Campbell Norton. 430 pp. $25.95

MARGARET THATCHER went into her country's general election in June saying that her long-term goal was "to see a Britain free of socialism." Thirty years ago, when Aneurin Bevan was at the height of his powers and the darling of the Labor Party, such a prospect would have seemed ludicrous or at best unattainable. The movement for state socialism, launched in the 1880s by a coalition of Fabian collectivists, trade union activists and miscellaneous utopians, gradually took over such a slice of industry and built such a large public-service sector of the economy that Conservatives up to Harold Macmillan saw no hope of reversing the process. Not so Margaret Thatcher, who has been selling off such great public assets as British Gas, Telecom and Airways, and has plans to go on to the railways, the mines and anything else that the born-again class of small investors can be persuaded to buy.

The way the Iron Lady has championed private enterprise, brought back harsh market laws in place of wasteful planning and inefficient public ownership, is one reason for the decline of the Labor Party. Another has been the skill with which she has exploited public distaste for the reactionary selfishness of the trade-union leadership. Yet another is the rise of the Alliance formed by the Liberal and Social Democratic parties, which siphoned off many Labor votes and forced Labor's Neil Kinnock to scramble for votes by an opportunist stance of moderation.

British politics, in short, have gone through a painful process of realignment, slow enough to keep Mrs. Thatcher in office though more than half of the electorate voted against her with ballots more or less evenly split between her opponents. The old confrontation model, still favored by what Kinnock himself calls the "loony left," was based upon the bitter class struggles of the 19th century and no longer seems relevant to the social structure of Britain today, to an industry that is no longer relies upon the labor-intensive work that spawned trade unionism, or to the opinions of an emerging educated class that dislikes the uncaring face of Toryism as much as it rejects the dated shibboleths of the Labor fundamentalists. No wonder Labor received little support outside the decaying industrial towns and mining districts that have always been its strongholds.

That was the world into which Aneurin Bevan was born in 1897 -- one could almost say born with a red flag in his mouth, because he came from the Welsh mining village of Tredegar, in the golden age when a million miners were leading the march from a laissez-faire Liberalism towards the New Jerusalem of which their famous male voice choirs sang so movingly. Nye Bevan was down the coal pit at 13, a trade union official in his twenties and at 31 the youngest miner ever to enter the House of Commons. He went through the General Strike in 1926, the unemployed struggles that followed the slump in 1931, the campaigns for Spain and the Popular Front -- though he was never a communist fellow-traveler, being a man who truly believed in democracy. For that reason he took it on himself to act as Churchill's goad throughout the war, to be described by the prime minister as "a squalid nuisance" for his pains, though he was the only politician of his time to be as loved and hated as Churchill, and to match him as an orator. Bevan was confident of a great Labor victory in 1945, used it to create Labor's famous National Health Service, and spent his last years in the party squabbles brought on by the advent of the Cold War. He died in 1960, just as he was beginning to face the paradox that dogged his own career as it had always hamstrung his party -- that the voters don't want the extremist policies that arouse the party faithful, and that in consequence the party leaders have to abandon in office the commitments they have made as they rise through the ranks.

ALL THIS is the context of John Campbell's thoughtful and significant book, for it is the first "revisionist" biography of a Labor leader to be written by a supporter of the new and moderate Social Democratic Party. For all that, it is fair and scholarly, and it sadly evokes an impulsive, gifted and attractive politician whose public life was "essentially a failure" because the great vision which sustained him was in fact a mirage.

It sounds like the career of a born and frustrated rebel, and Nye Bevan was certainly that. That fact that the English have the term "Bevanism" tells us that he was the only leader of Labor's left to reach national, indeed international, rank, capable of hobnobbing with Tito, Nehru and Khrushchev, and epitomizing a whole package of postures and policies.

It also tells us that Bevan was a man who was passionately serious about politics, that (unlike habitual left-wingers) he did not believe that righteous opposition had its own rewards, because he knew the world could only be changed by those who could win power in it. That belief made him a splendid cabinet minister; and towards the end of his life he came to see that Labor could never return to office while the rank-and-file kept the party committed to unilateral nuclear disarmament and the like.

That political ambivalence reflects a conflict between Nye's heart and head which went deep in his personality. Campbell rightly brings out the disparity between his simplistic Marxist faith in the working class and a bohemian life-style which made him prefer the company of Cafe Royal artists and writers to the worthy dullness of his trade-union colleagues -- in the '30s he was called "The Bollinger Bolshevik" (after the champagne) and the "The Playboy of the Westend World," and he never lost the zest for good living. Yet, at the same time, he never succumbed to the artistocratic embrace that suffocated other Labor leaders. From first to last he was his own man, enjoying the friendship of such a puckish but reactionary tempter as Lord Beaverbrook, and then carefully writing to say he could not accept the offer of a free country cottage, because he hated the corruptions of wealth, the increasing trivialization of human values in the huckster society.

Nye had great warmth, for all his public ferocity, great humor despite his outbursts of sulky temper. I well remember spending a Sunday at his farm outside London, when he neglected a lunch party of journalists and politicians to romp among the chickens in the hayloft with my small daughters. When we were getting into the car to leave one of the children said, unprompted, "I do like Nyse Bevans." He grinned, threw back his head and laughed. "That's the hell of being a demagogue," he said in the lilting Welsh voice that triumphed over his stammer. "You have to work at it all the time, even on Sundays, even with the kids."

I agree with Campbell. Bevan's strong feelings about human and social justice, his courage, his refusal to be bound by the conventional wisdom, his incorruptibility, even his patriotism and his large if rather blinkered sense of history, were all parts of that intangible presence we call greatness.

The tragedy of Bevan's life is that the socialist cause, in which he believed with the simple and generous enthusiasm of its founders, was never to command a majority of the working class let alone a majority of the British people. They would vote Labor, yes, but they did not want a Britain ruled by ideologues and bureaucrats, and since Bevan's death Labor has been afflicted by a chronic wasting disease, if not yet by terminal decline. The Alliance, despite a disappointing showing in the June election, may yet offer a relevant radical alternative, both to a mean-minded and increasingly authoritarian Thatcherism, and to a hard left that would turn Britain into the Poland of the West. In the end, I feel sure, Nye would have preferred democracy to that kind of socialism, and if he had lived, his party might never have split.

Norman MacKenzie, editor of "The Diary of Beatrice Webb," was recently Bernhard Professor of Political Science at Williams College.