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The Economist Gets it Wrong, Again

Margaret Thatcher a Freedom Fighter?

by ALAN MACLEOD

Margaret Thatcher’s face stares out at me from the front page of the April 13th edition of the Economist magazine, just below the words, “freedom fighter”. Not the words that typically sprung to mind when thinking of her, I read on. “The essence of Thatcherism”, it writes, “was to oppose the status quo and bet on freedom”. Her battles with the left, particularly the miners, led to great advancements for the country. It backs up its assertion with some statistics:“The inflation rate fell from a high of 27% in 1975 to 2.4% in 1986. The number of working days lost to strikes fell from 29m in 1979 to 2m in 1986,” and “the top rate of tax fell from 83% to 40%.” Are these really freedoms? They sound rather more like achievements that benefit what the Occupy movement would call the 1%. So, for whose freedom did she fight for?

Certainly not Nelson Mandela’s African National Congress Movement, whom she labelled “a typical terrorist organization” as late as 1987. Nor for Northern Irish Catholics, either. Thatcher proposed a “Cromwell Solution” to the Northern Irish question, that involved the forced expulsion of the Catholic population from the country. Nor for the people of Chile; Thatcher defended dictator and torturer Augusto Pinochet during his extradition battle, thanking him for “bringing democracy to the country.” This was a democracy where parliament was shut down and tens of thousands were killed, imprisoned and tortured. Economically, the result was soaring unemployment and poverty and falling industrial production. Purchasing power dropping to just 40% of what it had been in 1970, coupled with a rise in wealth and power for a small section at the top of society.1 Friedrich Hayek, one of the chief architects of what happened in Chile, recommended the country as a model for Thatcher to follow. She agreed Chile to be an “economic miracle”, but lamented that Britain’s “democratic institutions and the need for a high degree of consent” made “some of the measures” taken “quite unacceptable”.2

The Economist states that the ideas of Hayek, an Austrian economist, had a profound influence on her ideology. Hayek argued for the removal of the government from nearly all affairs of daily life, leaving individuals to compete in a free-market sea. Central planning was inferior to the free-market, as it impinged on the absolute freedoms of the individual. Deregulation and privatization were the panaceas to the country’s problems. Thatcher famously carried around copies of Hayek’s work, pulling them out and stating “this is what we believe”.

This free-market sea conjured up visions of the hypothetical world of Adam Smith, where individual shopkeepers and artisans competed freely against one another, pursuing their comparative advantage. “Britain”, Smith is alleged to have said, “is a nation of shopkeepers.” Thatcher’s father was no different. Growing up in the depths of the depression, the young Margaret saw her father’s grocery business prosper. By all accounts, he was a remarkable man who worked incredibly hard. He was simultaneously a personification of the industrious merchant and a great influence on his impressionable daughter. Unfortunately, his success may have been the worst possible message to send to her, as she grew up believing that, if he could, anybody could make it. She appeared not to have grasped, however, that, while anybody could make it through the depression, not everybody could.

Neoliberalism, the economic movement Thatcher became closely associated with, traces its philosophical roots to the work of objectivist philosopher, Ayn Rand. In a 1959 interview Rand gave a summary of her position. “Man’s highest moral purpose is the achievement of his own happiness…I challenge the moral code of altruism, the precept that man’s moral duty is to live for others.” Going further, she stated that, “I consider helping others evil” and that “love should be treated as a business deal.” Her ambitious goal was to revolutionize human relations and turn morality on its head. Shunned by academia, she found an audience in the business community, where her central messages of self-interest struck a chord. Thatcher echoed Rand’s vision when she insisted that “there is no such thing as society, only individuals”. This part of Thatcher’s vision for Britain was what most outraged Glenda Jackson, M.P. Amid a chorus of jeers from her opponents, she gave a speech during the debate on Thatcher’s tributes:

“The basis to Thatcherism, and this is where I come to the spiritual part of what I regard as a desperately wrong track that Thatcherism took this country into is that we were told that everything I had been taught to regard as a vice, and I still regard them as vices, under Thatcherism was in fact a virtue: greed, selfishness, no care for the weaker, sharp elbows, sharp knees, [was] the way forward.”

Boris Johnson, Conservative Mayor of London, leapt to Thatcher’s defence, stating that she was a “liberator”. Like the Economist, he went on to explain how she liberated the people: by freeing millions of people to buy their own homes and buy shares in British companies like British Telecom and British Gas. Also like the Economist, one can’t help feeling that these are primarily freedoms for the 1%. Johnson’s comments come off as rather crass, considering the housing and heating crisis the country is going through.

There are 120 million bedrooms in the UK, and only 60 million people. Yet we face a huge shortage of social housing and some of the highest house prices in the world. The UK builds the smallest new homes in Europe. In fact, the average luxury flat today is smaller than the minimum requirements for council housing in the 1960′s. Furthermore, more than 5 million households had to make the agonizing choice between food and heating this winter, as they could not afford both.

The pressing problems the country faces today trace back to Thatcher’s privatization of social services and the deregulation laws of the 1980′s. Like Pinochet, she presided over a period of great growth in inequality and poverty. Her legacy is the financialization of the economy, where traditional British industries like shipbuilding and metalworking, and the cities that grew up around them, were cast aside. The increased economic power of British banks brought increased political power, as the financial sector began to sponsor all three major parties. The entire political discourse moved to the right. The socialist values of Labour were forgotten, replaced by the “third way” of Tony Blair and New Labour. Thatcher was once asked what her greatest achievement was. She replied “Tony Blair and New Labour”. From her perspective, she was probably right.

Thatcher’s neoliberalism swept the globe. “Reaganomics” won in the United States, and the West forcefully pushed their idea of the “free-market” on the globe, through institutions like the World Bank, IMF and the World Trade Organization. Deregulation meant big businesses have used their power to buy out competition and achieve monopolies. In the UK, just four corporations, Tesco, Asda-Walmart, Sainsbury’s and Morrisons, control most of our food supply. The irony is that Thatcher’s policies have made industrious entrepreneurs like her father she so admired, a dying breed.

Her legacy began to unravel in 2008, when the financial crisis showed that unregulated markets lead to catastrophe. Likewise, Britain’s mountainous debt can be traced back to her huge tax cuts for the wealthy. The Economist insists that “now especially, the world needs to hold fast to Margaret Thatcher’s principles”. But just this week, a new study has found that the justification for austerity was based on “bogus maths.” One can’t help noticing that the Eurozone countries who most eagerly bought into the promise of a financialized economy, the UK, Ireland, Spain, Iceland, were hit hardest when the house of cards collapsed, whereas those countries who maintained their less glamorous manufacturing industries, like Germany, Scandinavia and Switzerland, have suffered the least. Meanwhile, in Latin America, movements challenging the consensus have swept to power.

Johnson concluded his remarks by stating that “this country is very much in her debt”. No, this country is very much in debt, thanks to her. She destroyed the productive manufacturing base of the country and unleashed the forces of finance. She was not the first to espouse this ideology, and certainly was not the last, but her strident zeal and contempt for large sections of the society made her a “figure of hate” to many.

Ding dong indeed.

Alan Macleod can be reached at: alan_macleod11@hotmail.com.

Notes

1Grandin, G. Empire’s Workshop, p.170

2Grandin, p. 172