UK Politics

Looking back on Thatcher

Guest post by Andrew Murphy

Monday May 4th was the 30th anniversary of Margaret Thatcher becoming Prime Minister of the UK.

David Cameron, leader of the UK Conservative Party wrote a gushing letter to Lady Thatcher:

“I wanted to write and send my best wishes on this, the 30th anniversary of the great day when you first walked into Downing Street as our prime minister.

“I still find it awe-inspiring to think of the state of the nation you inherited and the immense achievements of your governments. Getting the country to live within its means, bringing the trade unions within the law, rolling back the tide of state ownership, standing steadfast with our allies in the cold war … but above all giving the British people back their pride and self-belief. The whole country owes you a huge debt.

“It is with huge trepidation that I attempt, 30 years on, to get rid of an exhausted Labour government and start the process of mending the national finances and tackling some deep and entrenched problems that we face. If we are elected as the next government, I know that it will be extremely difficult work – but in your life and your work you have given all of us an example of real courage to follow.”

In retrospect, is the Iron Lady worthy of such praise?

Some of the reforms she helped put into place were inevitable. The British government had no business running industries like the telephone and steel companies. Likewise the Labour Party could have avoided ‘New Labour’ if they had spent time rereading their Tony Crosland rather then listening to the Tony Benn wing of the party. Management of companies are far more important then who ‘owns’ it. Nationalization is a micro, not a macro issue. However, Thatcher’s legacy is actually rather sordid. (Full disclosure: this writer was an American Thatcherite for many years.) On nearly issue, Thatcher failed.

She proved beyond a shadow of doubt that monetarism is a failed concept. Nobody tried Milton Friedman’s theories more vigorously than Thatcher. She tried so hard to make monetarism work that it almost became financial sadomasochism. By 1984, Thatcher abandoned her money supply targets as double-digit unemployment rose, output shrank 7.5 percent in two years, manufacturing collapsed like origami in a thunderstorm and inflation actually doubled. As early as 1981, Sir Alan Walters was begging her to abandon the hardcore monetarist experiment. The Lady was for turning after all when it came to finances, thankfully for the UK. By 2003, Milton Friedman himself was admitting to the Financial Times that, “The use of quantity of money as a target has not been a success…… I’m not sure I would as of today push it as hard as I once did.”

Contrary to the claims of many of her leftwing critics, though, Thatcher did not take a buzz saw to the British welfare state. By 1988, even after adjusting for inflation, overall public spending in the UK increased by 14 percent. Only trade, industry and housing actually saw any real cuts in the White Paper budgets. However, where Thatcher put in reforms, they were pernicious. She abolished nutrition guidelines for schools and fixed the price at 30p, thus insuring only junk food would be the norm. Thatcher forget what a former Tory PM once said, “There is no finer investment for any community than putting milk into babies.” (Churchill). Her “internal market” reforms in the National Health Service (NHS) left the NHS less democratic, more bureaucratic, more fragmented and adversarial.

While it would be unfair to blame all of Britain’s rising inequality on Thatcher, still under her watch, the gap between rich and poor grew and continues to grow. In 2007, UNICEF reported Britain was the worst of 21 “rich” countries for children to grow up in. A fifth of children still live in poverty. No such thing a society, indeed.

Thatcher does get high marks for doing what needed to be done, as earlier noted: taking out of state hands some of the industries the UK government was running badly, i.e., telephone, steel, airline. But what Thatcherites fail to mention is that privatization was not a major issue for the Conservative Party coming into power. The 1979 Manifesto hardly mentions the selling off of state assets as a key election issue. So, one of her key successes came by way of being Johnny-come-lately on the issue.

Breaking the miner’s union, which is considered the crown jewel of the Thatcher era, came at a terrible social cost. True, as of today, what little is left of the coal industry in the UK is more productive (pdf) per worker than in the USA, Germany and France. However, Grimethrope in South Yorkshire, a former miner’s town, is considered one of the poorest villages in all of the European Community. All of South Yorkshire is considered an Objective 1 development zone by the EU. Unemployment reached 50 percent in some areas after the strike was over.

Declassified MI5 reports show that Arthur Scargill, leader of the miners’ strike, was targeted long before Thatcher by the British government. The previous Labour government under Jim Callaghan had Scargill spied on and wanted him “warned off” after the Grunwick dispute of 1976. In fact Callaghan said his government was “not dealing with respectable unionism but rent a mob.”

In reality, the miner’s strike was a hopeless, no-sides-win situation that neither Labour nor the Tories should take delight in. Scargill’s position that no mine should ever close for any reason except for exhaustion made no economic sense. Thatcher had every right to uphold the rule of law. As Oliver Kamm has pointed out, concerning this issue, “The only place for the democratic Left in those circumstances is alongside that elected government and in support of the rule of the law. Every other question in democratic politics is subordinate to ensuring that a constitutional state has the means to defend itself.”

But where Thatcher failed was not doing more to help ease the pain of the closing of the mines. Relocation grants, retraining and financial aid should have been a priority to help the miners. As Scandinavian countries have learned, you protect the worker, not the job.

Elsewhere, Thatcher looked the other way as many of the police in Northern Ireland used organized crime elements to kill Catholics. Her government had the most claims of human rights violations filed against it before the European Court of Human Rights. Simon Jenkins noted in his book on the subject that Thatcher’s local government reforms led to the Tory nationalization of Britain by stripping local accountability away and to Whitehall. And her perverse logic of calling Nelson Mandela a “terrorist” but defending Augusto Pinochet up to the bitter end as a “great man” has to raise eyebrows even among her strongest supporters.

So how does one judge Margaret Thatcher’s legacy? On the steps of 10 Downing Street on that May of 1979, she quoted something attributed to Saint Francis Assisi:

“Where there is discord, may we bring harmony. Where there is error, may we bring truth. Where there is doubt, may we bring faith. And where there is despair, may we bring hope.”

It would be difficult by those standards to say then Thatcher was a success. Clearly after 11 years in power, there was more discord, more doubt and more division. There is no question however that she was a woman of courage and confidence, and re-established the UK’s influence in world affairs.