Can Britain become what Prime Minister Margaret Thatcher wants it to be: an American-style "free enterprise, entrepreneurial culture" that booms along under the banner of self-reliance, creating new jobs and a strong economy?
Or is this venerable island nation, so civilized and tolerant in so many ways, still too immersed in class-consciousness, socialized services and a more relaxed attitude toward work, education and profit to transform itself? Does it, down deep, even want to change?
Thatcher says Britain can and must change if it is to break the grip of relative economic decline that has dogged this country since World War II. She has staked much of her political reputation on such a transformation.
"We had it," she said of the spirit of enterprise in this country, where the industrial revolution was born a century ago, "and we are trying to regain it."
But Ralf Dahrendorf, who stepped down last fall after 10 years as director of the prestigious London School of Economics, says Britain has not had that spirit since the 1890s.
"It is totally absurd to try to change a society 180 degrees," he said. "The point about Ronald Reagan's success is that he is reviving traditional American values and virtues. Thatcher is trying to do just the opposite: fight all the traditional English values and virtues and, in my view, she is doomed to failure.
"Britain is a society of many solidarities," the German-born economist continued, "totally averse to the spirit of competition between individuals. If you try to set one against the other, you get nowhere in Britain. America is exactly the opposite. There is a great tradition of trying to get somewhere on your own. In Britain you always pretend you are not trying," he said.
Between the views of Thatcher and Dahrendorf lie the views of a many British academics, economists and managers interviewed recently, and the conclusions of some recent international surveys.
Those views suggest that while Thatcher may be pushing Britain toward a more dynamic economy, cultural obstacles and her policies of tight money could overwhelm the effort.
There is also little optimism that any major dent will be made in Britain's record 13 percent unemployment.
A top oil company executive said Thatcher "is more likely to fail than to succeed. But the country will be better off even if she doesn't bring it all off."
Thatcher recently told American correspondents, "Our reputation for research is extremely high." Reeling off numerous British breakthroughs, she added, "What we are not so good at is turning those into industrial profit."
"But the United States is a very, very different country," Thatcher said on television recently. "She has free enterprise built into her constitution. She is the last safe haven, everyone's safe haven for their money. She is never going to have a socialist government which is going to nationalize things left, right and center and impose high taxation. She is the land of free enterprise, of freedom, the country of last resort."
Some respected political commentators here, such as Peter Riddell of The Financial Times, have warned Thatcher that she may be overdoing it.
Her "enthusiasm for all things American in comparison with Britain's continuing faults may not go down well with the public," coinciding as it does, Riddell wrote, "with a growing disillusion with the U.S., and particularly President Reagan, among British voters. Thatcher may be right to argue for the creation of more of an enterprise culture, but there is an ingrained conservatism in British society that dislikes such an appeal."
Britain under Thatcher is now in its fourth year of modest economic growth, holding its own among its Western European allies but lagging behind the United States and Japan.
Inflation has been reduced to a steady 5 percent. Investment, productivity and corporate profits are all up. Huge nationalized industries have been sold off to the private sector. A 3.6 percent growth rate for 1985 was recently forecast by the London Business School and Thatcher's success in facing down Britain's powerful striking coal miners may smooth industrial relations in the future.
John Cassels, director of the National Economic Development Office, also points out that the number of self-employed people has grown by nearly 500,000 in the last five years and the total number of firms by 8 percent, most of them small.
And Britain has a core of top-rated international companies, such as Courtaulds textiles, Imperial Chemical Industries, British Petroleum and the Jaguar auto company, that are led by highly regarded managers.
But there remains a troubling undercurrent that can shatter Thatcher's hopes.
A major report last month on international competitiveness by the independent, Geneva-based EMF foundation places Britain in 14th place in a survey of the 22 western industrialized member nations of the Organization for Economic Cooperation and Development plus six developing countries.
"The halfway mark among 28 nations is a significant climbdown for a country that once led the world in market penetration," the report said.
The survey of 1,100 business leaders and economic specialists in the 28 countries said London's financial center was booming and dynamic and a big plus, along with North Sea oil and expanding service industries.
But "there are grave doubts whether these strengths will be enough to offset very deep-seated structural problems," the EMF report says. The country faces "a major competitive shortcoming" in its failure to train enough skilled workers and "Britain's virtual specialization in low-value products will put it more and more into competition with with low-wage, but increasingly productive, Third World countries."
A mid-1983 report by the U.S.-based Aspen Institute for Humanistic Studies on work habits in several industrialized countries found Britain scored the lowest. "The will to work and to do well in one's work is lowest there," the report said, "and dissatisfaction with working conditions the highest."
Although Thatcher cites gains in worker productivity, the EMF report says Britain's is the lowest of all industrialized nations and that the higher figures reflect either increased unemployment or shorter hours. "A British manufacturing worker adds only one-third of the value to production achieved by his U.S. colleague and little more than half that of his German mate," the report says.
Britain's economy is growing and the country enjoys a surplus in its balance of international trade. But the EMF report, a new OECD report on Britain, and numerous other specialists point out that the income from North Sea oil obscures the fact that, beginning in 1983, Britain's manufacturing trade dipped into deficit for the first time and has remained there.
Britain is now the world's fifth largest oil producer, and while Thatcher points out that the oil contributes only 6 percent of Britain's gross national product, it produces 10 percent of government revenue and 20 percent of exports.
The oil money is "the aspirin that prevents the pain from getting through," said one economist, and obscures real measures of competitiveness and the devastating loss of traditional manufacturing, especially in the north of Britain.
But Cassels, of the development office, says the oil "gives us more time to change and adjust . . . . As we succeed, it will change people's perceptions of where responsibility lies for making things happen."
David Marquand, a professor of politics at Salford University, says he, too, notices some positive changes in the past five or six years but points to inhibiting differences between Britain and America.
"Whereas change is what makes the United States so exciting," he says, "in Britain, change is regarded as suspect, a strange thing to do" when it comes to switching jobs or careers. "Here, you become protective of your slot and fight so that technology doesn't change. You stick with a firm or a profession. A middle-class person graduates from university at 22 and then does what he is going to do for the rest of his life."
"The unwillingness to take risks, both personal and business, is very damaging in this country and very pervasive," Marquand added. Traditionally, "there has been a disdain among the professional elite for industry and commerce."
That, Marquand says, is "changing slightly now" but he sees Thatcher as providing a mixture of "truth and nonsense" with her tight money and spending policies running counter to precisely the kind of competitive society she says she wants.
Conservative ex-prime minister Edward Heath describes Thatcher's tight-fisted monetary policies as "the kitchen sink economics of the housewife" that will never produce enough growth to cut deeply into the country's unemployment problem.
An American management expert here describes it as "penny-pinching budget balancing" rather than an investment strategy and says it "won't stimulate the country or a major resurgence."
While "Thatcher is a step in the right direction," he says, "there is still a tackiness that the British attach to monetary matters and profits and that leads to a lack of aggression in the mentality to create wealth. Growth of only the service industry here means they are only talking about the growth of lousy jobs. Britain has got to decide who it wants to be. It's got to stimulate research and development, not restrict it. They are enormously short of trained people."
Thatcher, he continued, "thinks she can nickel-and-dime and talk her way into a really competitive society. It's Reaganism without the American dynamism or budget deficit. Business is the establishment in the United States, a strong reed to lean on. That's not the case here," he says.
John Stopford, professor of international business at the London Business School, says that "Britain has a long way to go in understanding that education for supporting a wealth-producing society" needs to be encouraged, as well as traditional support for pure scholarship.
It is a widely agreed upon point. "It is fascinating," adds Dahrendorf, "that Britain continues to be very strong at the frontiers because they love the eccentric," the person who goes on to win the Nobel Prize. "But they've never translated that into production."
Cassels criticizes "this emphasis on the needs of a minority of more able pupils and relative indifference to the majority" and says Japan, the United States and West Germany outperform Britain "in the vigor and depth of their commitment to continuing training and education."
The development of advanced business schools here, he adds, has also settled down after a burst of enthusiasm several years ago.
Sir Michael Edwardes, the South African-born chairman of Britain's Dunlop rubber company, told Chief Executive magazine, "There's a lot of management talent in this country," but "there's more cowardice around today than in the 18 years I've been in Britain. The British attitude is that the most terrible thing is to make a mistake. It is by not making a mistake that you hang onto your job." That, he said, reduces the risk-taking environment upon which competitiveness rests.
Stopford says "complacency is enemy number one in this country; that old willingness to make do." Dahrendorf says it is a combination of unwillingness to take risks in combination with a failure to sustain newly started small companies so they can grow to medium size and compete.