RIP M. Thatcher - The Iron Lady

MARGARET THATCHER: A GOOD & FAITHFUL SERVANT

By Chriss Street

It is appropriate that on the day of the passing of Baroness Margaret Thatcher the Public and Commercial Services Union was calling for the first U.K. “generalized” strike since 1926 in order to send a message to the Tory Conservative government that workers would fight back against cuts to pay, jobs and pensions in the public sector. 

Facing inflation, Europe’s worst unemployment and violent union thugs, Prime Minister Thatcher defeated a 1985 coal miner’s strike that threatened shut down utilities and let people freeze to death in their homes for lack of heat.  Staring down union ultimatums to concede to their power, the Prime Minister implemented tax cuts and paid for them with privatization of state owned corporation and across-the-board budget cuts to revive the British economy. No country lost more in World War II than the United Kingdom.  The war left the nation mired in huge debt, without its colonies and the high government spending during the war opened up the economy for a socialist takeover.

  After the war, the trade union dominated Labour government nationalized most large U.K. industries, including coal, steel, auto, electricity, rail and etc. under the banner of “putting people before profit.”  The theory was that under state ownership the profits would be ploughed back into the nationalized industries to always keep production “in a modern state.”  Over the next four decades, the U.K. economy was the worst performer in Europe.

As a Parliament “back-bencher” in the 1970s, Margaret Thatcher was unique among her political peers as an honors graduate of Oxford and an industrial research chemist.  She knew how business worked and understood that British labor relations guaranteed that new technology coming out of the U.K.’s extraordinary university system tended to move off-shore for development and production.

Thatcher was especially disdainful of the militancy of the million member British auto workers union’s that regularly shut down industry.  As the dominant European manufacturer of cars and trucks from the 1940s to the 1960s, the auto industry accounted for 41% of U.K. exports.  As the nation’s largest assembly operation, the Cowley plant manufactured Morris vehicles, including the iconic Mini Cooper.  During the 1960s, the plant averaged over 300 strikes a year and in 1969 hit a record of 600.

Thatcher was influenced at Oxford by Friedrich von Hayek‘s The Road to Serfdom, which condemned economic intervention by government as a precursor to an authoritarian state.  During the 1960s, Thatcher became the leading advocate in Parliament for tenants in public housing to be allowed to buy their apartments.  She also opposed Labour’s mandatory price and income controls, arguing that government intervention produces effects contrary to those intended and distort the economy.  At the Conservative Party Conference of 1966 she criticized the high-tax policies of the Labour Government as steps “not only towards Socialism, but towards Communism”.

Thatcher powerfully argued that lower taxes served as an incentive to hard work.  She also supported decriminalizing homosexuality, legalization of abortion, supported capital punishment and voted against the relaxation of divorce laws.  When the Conservatives gained power for four years beginning in 1970, Thatcher was appointed to the Cabinet Secretary for Education and Science.  She increased school spending on classroom education by cutting public expenditure on the state education bureaucracy.

In 1979, Thatcher led her party back to power as Prime Minister and held it for the next 12 years.  Arriving at 10 Downing Street, she stated:

 “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.”

Thatcher sold off public monopolies, used the proceeds to cut taxes, and put the privatized firms on a profit-making basis. Their stock prices rose sharply, making capital gains for investors whose ranks included millions of Britons who had been employees and/or customers of these enterprises.

The most enduring success of Margaret Thatcher was that she taught the British public that companies are run much more efficiently in private hands than was the case under public ownership, even when the same managers remained in charge.  When she left office in 1991, only 35% of Britain’s voters supported the Labour Party – half the proportion registered in 1945.  The Labour Party did not come back into power until Tony Blair in 1996 abandoned “Clause Four” of his Party’s 1904 constitution, advocating state control over the means of production, distribution and exchange.

The United Kingdom that Margaret Thatcher left behind is very different because of her influence.  For the last three decades, the more capitalist U.K. has been the fastest growing economy in Europe.  The communist Soviet Union she opposed collapsed and has been remade into a semi-capitalist society.  The euro communalism she fought against is now on the verge of collapse.  After all the flowery speeches about the Iron Lady, the British people should honor her: “Well done, my good and faithful servant.”

 CHRISS STREET & PAUL PRESTON
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