"Friends, Romans, countrymen, lend me your ears.
I come to bury Caesar, not to praise him.
The evil that men do lives after them;
The good is oft interrèd with their bones..."
Julius Caesar Act 3, Scene 2
So begins Mark Anthony's funeral oration for Julius Caesar.
Tony Benn tells the story that he met Mrs Thatcher at the funeral
of Eric Heffer, the veteran left wing MP. Heffer was a socialist and collectivist and one whose viewpoint Mrs Thatcher
strongly opposed. But, nevertheless, she had come to pay her respects to
a political opponent and fellow parliamentarian.
It is right that political colleagues should gather with family
and friends for her funeral. She was a Prime Minister of our nation and
the first woman to hold this office. Along with The Edwardian Liberals of
1906 and the post war Labour government of 1945, she led one of the three most
important administrations in the 20th century. She was a servant of Britain and
it is right to honour her in death. This does not mean I agreed with her.
I fought against her. Opposition to her politicised me in many
ways. I do not believe I was wrong then and I do not support what she did
now. But it is right to honour her in death.
An economics lecture I attended in the summer of 1984 pretty much
nailed an accurate and fair assessment of her administration in my opinion. It remains
remarkably sound in its analysis, even today. Given by a
lecturer whose sympathies were left of centre it was nonetheless a non partisan
academic giving a reasoned, objective and evidence based assessment. He
was speaking a year into her second term. The miner's strike was underway, the
worst of the recession was behind her, council house sales had been a success
and she was just beginning the privatisation sell offs.
He painted a picture of an administration that did a number of
things that probably had to be done and that had an idealistic agenda to change
the post war consensus to make Britain more fit for economic realities. He
showed how, on both counts, Mrs Thatcher was a qualified success.
She came to power in 1979 at the end of a decade where the
trades unions seemed incredibly undemocratic and a number of union Barons
wielded an inappropriately large amount of power. This power seemed
to be more about applying restrictions that held the economy back or about
wielding political power, rather than fighting for workers' rights. It was
also the end of a decade that was extremely hard economically. We had
faced two recessions, rampant inflation and high taxes.
Mrs Thatcher changed this. High inflation became a thing of
the past, taxes were lowered and the unions were tamed. The number of
days lost to strike action reduced dramatically and politically motivated
disputes seemed a thing of the past.
However, the great question is how much of this would have
happened anyway?
Economic growth during the 1980s was only a little better than its post
war average. Thatcher in fact ditched monetarism (trying
to control inflation by controlling the money supply) after a few years as they
kept over shooting their targets. However, there is no doubt that inflation
was tamed. I suggest strongly that we did not need Thatcherism to tame
both high inflation and taxation - they would have happened anyway, one way or
another.
I think what Mrs Thatcher delivered was an end to the
'Bustkellite' post war political consensus and the idea that there is no such
thing as a free lunch - governments may be full of good intentions but services
have to be paid for and you cannot pay for anything unless the country is
making money from goods and services.
As Stephanie Flanders put it on the BBC, Thatcher made us all
powerful as consumers which is actually quite liberating. Before the
powerful were the CBI and Unions. The coverage of elections in 1979 and
1983 - especially the 79 one are full of interviews with some extremely boring,
self important and breathtakingly un-self aware union leaders. The CBI types were no less of a self-parody. The
framing of politics as unions v bosses was sterile and neither side represented
the British people particularly well.
Mrs Thatcher also wanted to turn us into a property owning, share
owning democracy.
She succeeded in making us property owners with most of us owning
our own homes after Thatcher. The Conservative policy of selling off
council houses at a discount was enormously popular and empowering for people.
On the negative side the social housing stock was not replenished and we
do not have enough of this right up to the present time.
I am not so sure she succeeded in turning us into a share owning
democracy. Many of us owned shares by the end of the 1980s, whereas before
this was a preserve of the elite. However, few people owned anything
other than privatisation sell-off shares.
However, in subsequent years more have come to own shares
indirectly through personal pension plans, PEPs and then ISA plans, but this has
been a qualified success.
She also lowered tax - especially on the wealthy and companies -
and replaced some of this with higher VAT. Now some of this needed to
happen to balance the tax rates and stop them being unnecessarily punitive.
Paradoxically this probably led to an increased tax take and helped
business develop. However, she was a believer in supply side economics
and guilty of seeing low tax as an incentive (to the wealthy) and benefits (for the poor) as a
disincentive. Hmmmmmm - no doubt there is a valid point in there but it
always felt to me that the wealthy and powerful wrote that one!
The casino economy
The lecture I heard in 1984 pointed out we were creating more of a
casino economy than a strong sustainable one. Subsequent writers have
pointed out the same. I have to say I believe this is a key weakness of Mrs Thatcher's legacy.
"Speculators may do no harm as bubbles on a steady stream of
enterprise. But the position is serious when enterprise becomes the bubble on a
whirlpool of speculation. When the capital development of a country becomes a
by-product of the activities of a casino, the job is likely to be
ill-done."
John Maynard Keynes, "The General Theory of Employment,
Interest and Money
Herein lies the criticism. Monetarism - although it played a
part in reducing very high inflation - ultimately failed as it accelerated the
decline of manufactured industry and the increase in unemployment. She
created unemployment blackspots which remain blackspots to this day. She
created a drift of jobs to the south and an economy based on service jobs.
The collapse of rust belt industries meant a loss of engineering skills
which we could have done with more of in order to create sustainable jobs.
That's not to say she was wrong to liberalise the economy in order
to let it adapt. These policies had many successes. And, as my
lecturer pointed out in the summer of 1984 - still early in the miners’ strike
- there would be only one working coal mine left in Scotland by the end of the
1980s. He was right!
Similarly, she deregulated financial services. Big Bang, the
Financial Services Act 1986, and liberalising the functions and capabilities of
Banks, Building Societies, Insurers and Friendly Societies produced a boom in
financial services. This helped to inject more capital to oil the wheels of the
economy. This contributed to the huge success of Edinburgh and places
like Leeds as financial centres - not just London.
Now, the global financial crisis of 2008 cannot be her fault, nor the
subsequent prolonged period of chronic low growth we now find ourselves in.
But she sowed the seeds.
Her economic approach produced no German economic miracle of mostly
sustainable, high production, high technology jobs with longevity for the 21st
century. At times she seemed a little
callous running a laissez faire approach to liberalisation and economic natural
selection letting rotting fruits wither on the vine. None of this is easy of course. They say that if you have a tomato plant spilling
all over the place, rather than try to water and feed all of it with finite
resources, you are best watering the strong bits thoroughly at the expense of
the less viable parts. That way the whole plant will thrive and the largest
and best quality crop will be produced.
Nevertheless, in letting heavy industry die and in accelerating the
decline of manufacturing through the mistakes her governments made in the early
1980s, we lost a lot of engineering skills.
There was not enough mix in the economy. By and large the economic blackspots of the
1980s are still economic blackspots. We rely
too heavily on the service sector, too heavily on financial services and too
heavily on the South-East.
Keynes wrote about economic bubbles and too much speculation. The housing booms created too much economic
activity based on remortgage debt. The
approach to shares was rather more about investment returns from a killing on the
market, rather than capital investment in productivity. It was too much about consumption and not
enough about investment and reconstruction of our rust belts.
The global financial crisis and subsequent lost decade have been caused by bursting
bubbles – first a property one and then a credit one. Throw in reckless banking policies and a
shadow banking system based on speculation - that our ratings agencies and
regulators were not equal to - and bang, the economy has faltered on an epoch
creating scale!
It is of course complicated to get right. I am probably still a Keynesian at heart but you cannot simply spend your way out of a
recession – Callaghan recognised this at the end of the 70s. Mrs Thatcher’s policies of stimulating growth, and of freeing markets and consumerism were important and needed. But, I think she was altogether too dogmatic –
a warrior on a mission.
Thatcherism
So what of Thatcherism itself?
Thatcher’s greatness we are told comes in part because she had her very
own ism. What other Prime Minister can
boast that?
Nigel Lawson described Thatcherism as “Free
markets, financial discipline, firm control over public expenditure, tax-cuts,
nationalism, Victorian self-help, privatisation and a dash of populism.”
In truth I don’t think Thatcherism was so great -
in fact, if you break it down, it was rather quirky and odd . It was a curious mixture of the radical and
the conservative; of the authoritarian and the liberal.
In many ways I think it was actually the death
throes of a generation forged by the second world war.
I well remember her ostentatiously putting a tissue over the
rather funky one world design, which had replaced the Union Jack on the tail of
a model British Airways jet. She was a
character of contrasts, a politician who delivered for the country and one who also did great harm.
She stood up to excessive and undemocratic union power and to
other vested interests. And let it not
be forgotten she stood up to fascist neo-colonialism from an ugly Argentinian
regime in the South Atlantic. But she was also enormously divisive. At home at times she went to war with her own
people – the enemy within. This was not
the greatness of a British Lincoln say, who defeated the divisions that needed defeated then held a hand out to rebuild.
Yes, I see Thatcher as a qualified success. She is now owned by the Historians, as someone
said today, and they will see the good and the bad in her legacy.
I think by 1979 the writing was already on the wall - for excessive and
undemocratic union power - for politically
motivated strikes - for high inflation. However, Thatcher must take credit for her
determination, bravery and leadership. Her
single minded nature and clarity of thought made sure things that were often
challenging were in fact achieved
But, I think she also brought unnecessary division - the enemy within
and a seeming lack of empathy for those not with her - a warrior who seemed to
see things in black and white.
And let us not forget that much of her power came because Labour
imploded and was unelectable in this period and the opposition was split between the
centre-left Alliance and a confused Labour party.
Personally, I would rather have seen the Alliance break through in 1983
or Thatcher fall during the Westland crisis in 1986. I think Thatcher had made her contribution by
then and we would have been better served to consolidate and build in an
altogether more constructive way by the toughness and tenderness of the Liberal
and SDP alliance.
