Tag Archives: Margaret Thatcher

Learning from the rise of Mrs Thatcher

Mrs ThatcherI have recently finished reading Charles Moore’s excellent first volume of the authorized biography of Margaret Thatcher.  I wanted to read this as I inhabit a bit of a left wing bubble, politically anyway. We project cardboard fantasies onto Tories, as selfish, rich cynics. But we need to understand their true humanity and complexity – and Mrs Thatcher is such an important figure,that she is a good place to start. It is proving timely since some supporters of Labour leadership contender Jeremy Corbyn are suggesting that she offers an interesting precedent. Somebody who achieved power and dominance in spite of despising the political middle ground.

It is, of course, easy to dismiss the comparison of an ambitious and conventional careerist like Mrs Thatcher with the maverick Mr Corbyn, who has discovered serious political ambition late in life.  She had at least had been a cabinet minister, and had some kind of relationship with most of the important people in her party before her bid for power in 1974. Still, she succeeded in spite of rejecting consensus, and in the face of massive scepticism, while having solid grassroots support.

The book covers Mrs Thatcher’s early life up to the conclusion of the Falklands War in 1982, at which point she truly started to dominate politics. It is a fascinating story. Let me offer a few observations.

The first is not relevant to Mr Corbyn’s situation. It is that there was something quite liberal, and indeed Liberal about Mrs Thatcher’s political outlook. Her father had been a Liberal, and a senior local politician. If you had to pick one word that summarised her outlook it was Freedom. She did not believe in a ruling class that was born to rule. She wanted everybody to be able to access what society had to offer – though she assumed that they would have to work for it, rather than let things be handed to them on a plate. She hated trade unions because they underwrote a system that stifled freedom: but she admired the way that they stood up for the weak and voiceless. You just have to remember how stultifying the political consensus of the 1950s, 60s and 70s had become, not to mention the ever present Cold War mentality, to understand how liberal beliefs might drive you to the right rather than the left in those days.

In only two serious ways can I think that Mrs Thatcher’s beliefs conflict which core liberalism as I understand it. One was that she was fiercely nationalistic – although that may be more of a failure of imagination than principle. She swallowed whole a traditional view of English history – which she saw no need to question. Secondly she believed profoundly that people should strive to better the lot of their children – to the point that inheritance of your parents’ assets was a fundamental right. Modern liberals want people to strive for their children, of course, but think of legacies of property and money as a barrier to freedom of opportunity.

It need hardly be said that Mrs Thatcher had no time for the Liberal Party itself – who were often here main opponents in her local seat in Finchley. To her (and her father) Liberals had betrayed Liberalism.

A second point is that her advance from Leader of the Opposition to Prime Minister was precarious. She nearly lost the election in 1979. Her most reliable ally was a deep public distrust of Labour, following years of economic failure – high unemployment, inflation, and awful government finances. Trade union power, showing contempt for elected politicians and the rule of law, was a further cause of public disgust. But she did not have any convincing economic narrative with which to to oppose Labour, and that undermined her public appeal as the election drew close. The previous Conservative government, in which she had served, was widely regarded as a disaster. Her own economic policies were unclear, and to the extent they were formed, were doubted by most of her party.

This, of course, may be one thing giving Corbynistas hope: that Mrs Thatcher won in spite of lacking a clear economic narrative. It runs counter to the Labour centrist narrative that the party will only be electable if it follows the conventional economic wisdom, and much of the Tory economic narrative. But Mrs Thatcher’s lack of economic narrative nearly undid her. And for it to work the Tories will have to look a lot more financially incompetent than they do now. As I have written before, the British economy could certainly go off the rails in the next four years. Growth could fail; another banking crisis could strike. But the problem for the left is that any such new crisis might make the anti-austerity narrative look less credible rather than more so. Indeed, the best argument that can be made for the government’s excessive plans to reduce government expenditure is that they will be a better place to start if the economy at large disappoints.

And the third observation is how long it took for Thatcherism to emerge after she became Prime Minister in 1979. In her initial Cabinet she was outnumbered by sceptics (“the Wets”). The government had to deal with a raging economic crisis – and that absorbed its full attention. Her strategy was what today would be called austerity – cuts in government spending, and some tax rises, to try and bring government finances under control. It was all she could do to keep her Cabinet more or less behind her. This has echoes of the first Coalition years after 2010 – with an important difference: interest rates were sky high in the early 1980s in order to deal with rampant inflation. (And, I would add, the Coalition  Cabinet was considerably more united). At the time this was not a particularly ideological struggle; much of the impetus came from her Chancellor, Sir Geoffrey Howe, who was of the political centre, and with whom she did not see eye to eye. It was more a matter of asserting political control, based on age-old Treasury orthodoxy. And it is striking just how much of the problem of economic management derived from nationalised industries – which included steel, cars and coal – as well as energy and the railways. State control had allowed awful management to take hold, abetted by trade unions who had no conception that economic efficiency should be a political priority.

There is a tendency in the left to look back on the Keynesian consensus years from the 1950s to the 1970s as a bit of a golden age (though I would suspect that Maynard Keynes would turn in his grave to have his name attached to those policies!). The consensus favoured a highly active government, that tended to nationalise large industrial concerns when they got into trouble. But the country stumbled from one economic crisis to another from the 1960s onwards, and after the oil crisis of 1974 economic collapse (hyperinflation as the government was unable to pay its debts) beckoned. If Mrs Thatcher had failed, and been replaced by a government that was less determined to tackle government finances, in the name of Keynesian demand management, then economic collapse of some sort was surely the most likely outcome.

The emerging economic problems of the 2010s and 2020s take an entirely different form. Its symptoms are slow economic growth, an uncontrollable business elite accruing much of the wealth to itself, and the disappearance of stable, middle order jobs. These are trends brought about by changes in technology, the world economy, and demographics. The political right does not have the answers. But neither does the left… though they are both right about some things.

Mrs Thatcher is a hate figure on the left, but it is not an exaggeration to say that she saved Britain from economic collapse, with a lot of the hard work being done in those first, precarious years of power. What emerged was a less equal and less secure society, but one that was overall much more prosperous. And it functioned in a way that the previous one had become unable to – consumption and production were reconciled. This achievement required a combination of steely determination, the support of an inner coterie of determined supporters, and political skill in bringing along people who did not really believe in what she was doing.

And Jeremy Corbyn? There are similarities, but it’s more than hard to see Mr Corbyn and being a Mrs Thatcher of the Left.

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Mrs Thatcher: the lightning conductor

Oh dear! The death of Margaret Thatcher yesterday has unleashed a flood of comment about how she transformed this or that. Mainly it is praise from the right (it’s everywhere and I can barely bear too read them, so I’ll only link to this one from the FT’s Janan Ganesh which manages to be reasonably objective). But the left do not want to be deprived of an opportunity to vent their precious hatred – like this absurd article from the Independent‘s Owen Jones. What she symbolises seems to be more important that her actual achievements.

When I first studied history (I did History Part 2 at Cambridge, graduating in 1979 just as Mrs Thatcher took office) the Marxist view of history was quite prevalent. This saw history as a sort of clash of tectonic plates (I also studied Geology at Cambridge…) formed by social classes or interests (“the forces of history”), which downplayed the contribution of individuals. If one person had not led such a change, it was held, then somebody else would. This was closely linked to the idea of historical inevitability, used by left wingers to predict their inevitable victory, and so contributing to their tactical ineptitude. The Marxists greatly overplayed their hand, but the fashion seems to have gone too much the other way. We associate the process of historical change too much with individual achievements. And none more so than with Mrs Thatcher (as she is no longer alive, I do not feel the need to use her title: she was always Mrs Thatcher to me).

The period when Mrs Thatcher was Prime Minister of the UK, 1979 to 1990, was one of quite dramatic transformation in both this country and the world. I remember the 1970s all too well. The British corporate settlement was in a state of collapse. In common with many democracies the country had been governed through a sort consensus of trade union bosses, managerial types and civil servants. Unfortunately the management leg of this arrangement was very weak: business leaders were more interested in undercutting each other than showing solidarity in the face of common challenges. In this the system contrasted with Germany and Japan who have used the corporate model much more successfully; and unlike in France, the state element had an anti leadership culture. With management and the state weak, trade unions ran rampant. Edward Heath’s government of 1970-1974 at first tried to work with the consensus, but the unions were too greedy – and he lost power in 1974. Though the public mainly agreed with him on the unions, they saw his government as incompetent, leading to an indecisive election result that Labour’s Harold Wilson skilfully exploited. The world economy was reeling from a massive rise in oil prices, which the government tried to treat as if it was a cyclical rather than structural problem with loose fiscal and monetary policy (following principles espoused in our current environment by Paul Krugman et al). Labour wrestled with the impossibility of trade union economics. The turning point came in 1976, when Britain had to go to the IMF for a bailout. Wilson had bowed out, and the messy job of fighting back fell to Jim Callaghan and his Chancellor, Dennis Healey. But the unions fought back, and the notion arose that the country was ungovernable. Enter Mrs Thatcher.

I voted for Mrs Thatcher in 1979, or rather I voted for Sir George Young in Ealing Acton, in support of the Conservatives. I was growing out of my cold war inspired distrust of Labour, but hated the messy process of fudge and compromise that was Mr Callaghan’s way (symbolised by such outrages as the Dock Labour Bill, which thankfully never got into law). Mrs Thatcher’s economic policies were a real shock: sky high interest rates, causing industrial collapse across swathes of the country. But who else had an answer to the simultaneous inflation and unemployment in which the economy had been stuck? But the style, if not the substance, grated and when the SDP was formed out of the wreckage of the Labour Party, I joined it.

Mrs Thatcher’s government swept away much nonsense: trade union power, nationalised energy and telecoms businesses, City restrictive practices, and so on. These acts of destruction were necessary for the British economy to thrive. On the left the Thatcher government takes the blame for the destruction of swathes of British industry, and the communities they supported. The emotion gets very high in the case of coal mines. And yet there is no modern economy that has not seen destruction of such jobs on a similar scale. Walk into a German factory and you will see lots of production, but few workers. Industrial technology has wiped out a whole category of seemingly safe industrial skilled and semi-skilled jobs that were the bedrock of the working class. After Mrs Thatcher, globalisation has continued the same process, but the main destruction comes from technology, not the export of jobs. And, for all the destruction of these jobs, the extra wealth generated by productivity improvements has spread across the whole of society, even if it has favoured the rich proportionately more. This is one reason why our current recession is inflicting less genuine hardship that previous ones.

The process of modernising the British economy was necessary and beneficial. And also, surely, inevitable. Without Mrs Thatcher the changes would have happened more slowly, perhaps. But they would still have been painful, and yes, “divisive”, to use the common word attributed a lot to Mrs Thatcher. But she did take the process of confrontation to extremes. Did this create more social harm that was necessary? We can’t know, though the admittedly smaller and more cohesive country of Sweden managed a very similar transition rather more successfully, I feel. But Mrs Thatcher was a hero to many Swedes.

A more serious criticism of the Thatcher government is that it did little to create sustainable jobs to replace the ones destroyed. The country launched forward on a twenty-odd year credit binge fuelled by North Sea oil. Just how hollow this was is now becoming clear, as the flow of oil slows. A severe devaluation of the pound has not done much to correct a severe imbalance of trade. But it is a little unfair to entirely lay this at the door of Mrs Thatcher, though. The imprints of Labour’s Tony Blair and Gordon Brown are just as firmly on this failure. And it is no so easy to see what should have been done about it.

And on the world stage? Mrs Thatcher’s most conspicuous triumph was taking on Argentina in the Falklands war. This one was about heroes I think, rather than the forces of history. It helped bring down a nasty dictatorship, and secured Britain a stronger international standing – though I am less clear about what good that led to. To suggest that she and Ronald Reagan’s confrontational attitude to the Soviet Union had much to do with its eventual collapse is nonsense: it needed no outside help to do that. And when it fell Mrs Thatcher was flat footed, failing to understand the implications of what was happening. Her contemporaries Helmut Köhl and George Bush (senior) were much more on the ball. Her reservations about a united Germany may have been well founded, but she had no solution.

Still she deserves credit for one important international development, beyond toppling the Argentine generals. She was instrumental in the launch of the single European market in the EU. This project was making little headway as Eurocrats pushed forward a hopeless programme of bureaucratic harmonisation. Mrs Thatcher, with the Commissioner she appointed, Lord Cockfield, turned this around giving a presumption to free trade. It was a classic synthesis British freewheeling pragmatism and the more bureaucratic and formal French approach. She may have felt with hindsight that the Single European Act that enshrined it in UK law went too far, but her vision of Europe as an open market was genuine enough, and she deserves credit for persuading her European colleagues of the idea’s merits.

Mrs Thatcher was a hugely conspicuous character on the British and world stage, both through her sex and her personal style. It is only natural that we project so many positive and negative feelings onto such a person, as a sort of lightning conductor. But many of the changes she wrought were the inevitable march of modernisation; and many of her achievements were undermined by tactical and strategic errors. She did more good than harm. Faint praise. She would not have liked that, but then she would not have like me.

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