The Thatcher Myths And Her Real Legacy

The announcement of Mrs. Thatcher's death was marked by an eruption of celebrations and partying across Britain.

Britons see it as taboo to speak ill of the recently deceased but apparently that did not apply in this case.

So in cyberspace downloads of Judy Garland's version of "Ding, Dong! the Witch is dead " from the Wizard of Oz soared in the charts because of an online campaign. Some graffiti on the streets of Belfast read "Iron Lady? Rust in Peace" and "Rot in Hell, Maggie Thatcher" says another. In my opinion the celebrations were way over the line.

On the other hand a lot of positive things have been said about Mrs. Thatcher's legacy and this article will try to expose them for what they are i.e. myths and will also explain what her true legacy really was.

MYTHS

A. ECONOMY

1. Economic miracle - The Thatcher years (1979 - 1990) were said to have produced an economic miracle.

Not true. Her regime saw two of the three worst recessions in the last hundred years 1980 - 1981 and in the late 1980's the economy picked up because of a credit bubble which soon burst and the economy was back in recession 1990-1991.

2. Rolled back the state.

Not true. Under Mrs. Thatcher government spending rose by more than 1%. Neither did she shrink the state in the sense of cutting taxes so in 1978-79 taxes were 40.2% of GDP and in 1989-90 it was about the same at 39.9% (National Archives 2005- Public Finances Chart 24). She did cut taxes for the rich from 83% to 40% and increased Value Added Tax (which affects the poor the most) from 7% to 15% (Thatcherism, by Kim, Changhyun, October 2005).

Furthermore, the welfare state such as the National Health Service and education were untouched and remained as state monopolies in 1990 as they were in 1979.

3. Restructured economy and made British capitalism competitive.

The idea that privatization was a carefully thought-out strategy to sweep away socialism and replace it with share-owning is false.

Privatization was not in the tory manifesto in 1979 as was not even a conservative invention as the Callaghan government had in 1977 (2 years before Mrs. Thatcher came to power) sold 17% of shares in BP to raise quick money. Furthermore it was not until her second term that the restructuring started.

According to Larry Elliott, economics editor of the London Guardian Mrs.Thatcher stumbled upon privatization (the Big Idea) by accident. Three factors he says caused her to turn to it:
(1) Higher unemployment had increased the deficit to 4% of GDP in the 1980's which created a need for quick money.
(2) Mrs. Thatcher wanted to change the political culture and inculcate in people a sense of share ownership (popular capitalism).
(3) Privatization of services in the public sector provided better value for money as had been proven in some cases at local government level.

Mrs. Thatcher saw privatization as the answer to raising quick cash to pay off the ballooning debt. So she handed over the public companies to the City (London banking center) to be sold. The first big privatization, British Telecom, came in 1984 and public enthusiasm for the selloff far exceeded expectations.

Then, in 1987 came the "Big Idea" i.e. privatization was not only a way of making money but a way of ridding Britain of socialism forever (How Thatcher stumbled on her Big Idea by Larry Elliott, Guardian March 19, 2009). So 1987 was the year of privatization including British Airways, Rolls Royce and British Airports Authority. Steel, water and electricity were also denationalized.

Most of the companies were intentionally sold to previous employees and managers or foreigners as this made it more difficult for any future government to renationalize them.

The money derived from the selloff was not invested in industry to create jobs but only benefitted the rich as it was used to pay for tax cuts for the top income bracket.

By the time John Major came to power in 1990 most of the remnants of the old public sector had been sold. All the family silver had been sold off.

Privatization hurt the economy as prices did not decline proportionately to costs cuts and productivity gains; many services were cut back, especially on the least utilized transport routes because they were not profitable although they served a need; inequality increased as the industrial labor force shrank by 2 million, while wages stagnated in the face of soaring profits for privileged companies. (Failed Privatizations - The Thatcher Legacy & Mrs. Thatcher's mean legacy by Michael Hudson).

The Thatcher government also deregulated banks and trading (Big Bang) in 1986 which led to massive bonuses as "greed is good" became the mantra. Weak banking regulations led to irresponsible lending which gave us today's financial crisis.

British capitalism under Mrs. Thatcher certainly was not more competitive. In 1979 in order to control the double digit inflation she raised interest rates which increased the value of the pound and made exports more expensive and unable to compete with superior quality and less expensive goods coming out of Japan.

4. Made people richer.

Not true. During her regime the income of the richest tenth rose by 61 % whereas the poorest fell by 18%. In 1979 the richest tenth share of national income was 20.6 % and the poorest tenth was 4.3% but by 1991 the share of the richest tenth went up to 26.1 % and the poorest tenth fell to 2.9% (Thatcherism by Kim etc.). So the rich got richer and the poor got poorer.

5. Conviction politician who stuck to her beliefs through tough times.

Not true. In 1979 when Mrs. Thatcher came to power her main objective was to reduce inflation so as to improve the environment for the business sector. She tried to do this by cutting the money supply by raising interest rates and cutting government spending (monetarism). Inflation fell but the economy fell into a recession in 1980. Nevertheless the deflationary policies continued.

Unemployment rose to over 3 million (Office of National Statistics); the government fiddled the figures including switching unemployed to disabled benefits so the figure was nearer 4 million. 365 economists wrote a letter to the Times asking Mrs. Thatcher to end the recession. Mrs. Thatcher's response was her famous words to the Tory faithful "You turn if you want to but the lady's not for turning".

Money growth proved harder to control in practice than in theory and consistently remained high.

Mrs. Thatcher did not stick to her guns. The lady was indeed for turning and in the early 1980's she abandoned her original monetarist policy and reversed the rise in interest rates. It was one of the biggest economic policy uturns post 1945 (Hywel Williams, The lady was for turning, Guardian, June 13, 2007).

Inflation fell after 1982 from 8.6% to 4.5% (D. Smith, 1992-From Boom to Bust, Trial & Error in British Economic Policy) not because of lower monetary growth but because of the recession.

Hidden in the unemployment figures were thousands and thousands of young people who came of age at this time and did not know what it was to have a job. Some of them became depressed, developed mental illnesses or committed suicide. They were called "Mrs. Thatcher's children".

6. Greatest free market legacy is privatization.

False. When Mrs. Thatcher sold the public assets she did not sell them as separate units to foster competition. Instead they were sold as monopolistic lumps because that fetched higher prices. That left various cartels, for example, the energy sector and not free market competition.

7. Working days lost to strikes reduced.

Yes but only half the story. In 1979, 29 million working days were lost to strikes and by 1990 it was reduced to 2 million. But how many days were lost due to unemployment? In 1981 alone, for example, unemployment was 3 million; multiply that by the number of working days, 335 days lost = 1 billion (Charles Moore, BBC Question time, April 11, 2013).

B. INTERNATIONAL

1. Thatcher and Reagan ended the cold war.

False. The cold war ended due to the collapse of the USSR which had a new leader, Gorbachev who weakened Russia's military by diverting resources from the production of industrial goods to consumer goods so as to raise the standard of living of the Soviet people and stave off the possibility of another revolution. Earlier Gorbachev had sought and got Thatcher's and Reagan's assurance that they would not attack if the USSR weakened its military. Gorbachev then introduced economic reforms (Perestroika) and more liberty (glasnost) which started a chain reaction that he could not control and the empire collapsed.

2. Stood up for freedom and democracy in the world.

Not true. Mrs. Thatcher supported the apartheid regime in South Africa and called Nelson Mandela a "terrorist". She supported dictators like General Pinochet in Chile and Pol Pot in Cambodia who carried out genocide against their own people. She also had plans to end the sanctions and recognize the racist and rebel regime of Ian Smith in Rhodesia (Zimbabwe). But Ian Smith was losing the civil war and upon taking power, Mrs. Thatcher did a uturn and called for talks between the combatants. The lady was for turning.

C. POLITICS

1. Restored law and order.

False. Crime increased by 79%, for example, there were riots in Brixton, Toxteth at the start of her reign and riots and civil disobedience against the Poll tax at the end of it.

Mrs. Thatcher said that she would not negotiate with "terrorists" yet in late 1980 she negotiated with the IRA during the hunger strikes and a concession led to the strike being called off. (Margaret Thatcher- 6 Things you didn't know, by Andrew Sparrow, Guardian April 22, 2013).

2. Created "Property owning democracy through the sale of Council houses".

Her popular capitalism policy of selling public houses at undervalued prices was politically popular, but reduced the stock of houses available for poor people and caused house prices to rise leading to a fall of home ownership (Dispelling the Thatcher myths, by Alex Nunns, April 2013).

3. Electoral Phenomenon.

Mrs. Thatcher won 3 elections, each with a lower percentage of vote than the previous post war tory victories. She never gained the support of more than one-third of eligible voters. She was also helped by a very weak opposition following the breaking off of a part of the Labor Party to form the SDP (Dispelling the Thatcher myths etc.).

REAL LEGACY

Mrs. Thatcher's real legacy is that in the area of the economy, in trying to solve problems she created a new set. High inflation was replaced by high unemployment; productivity improved but the balance of payments worsened; inefficient manufacturing was replaced by unstable financial services; working days lost gave way to many more lost through striking by capital and power shifted from labor to capital as union membership dropped, rates of profit and share of total income of the top 1% increased and wages as a percentage of GDP dropped (Office of National Statistics).

On the political side Mrs. Thatcher created a North-South rift as the recession hit the north and manufacturing industry the hardest while the south (except for the slums of London) was booming with new service industries. As a result in the 1987 election the Conservatives won 226 of the 260 seats in the south but only 149 in other areas (Thatcherism, by Kim etc.).

Mrs. Thatcher succeeded in defeating the unions and the left, which pulled the Labor Party to the right which then rebranded itself as New Labor; but that left three right leaning parties and people no longer had a choice of political ideology; no wonder the Scots are trying to go their own way through independence. She also changed her own party; when she left office it was no longer a consensus party but one that had substituted pragmatism with the ideology of the right and thus lost touch with people which ultimately led to her own downfall.

In concluding, as was the case in the 1970's Western economies are again in crisis. Interestingly there is hardly a word of a return to Thatcherism as the way out of the current crisis. Fareed Zakaria has argued that Thatcher's policies are not helpful in solving today's problems since they were designed for different problems of the 1970's. (Could Margaret Thatcher's reforms work in 2013, Washington Post, April 10, 2013).

Mrs. Thatcher's main fault was that in seeking to meet spurious monetary targets she increased unemployment to unprecedented levels which was responsible for social problems and riots. The celebrations that marked her death are a measure of the depth of the scars that the victims still bear after all these years.

Whatever benefits might have come from Thatcherism, they were not worth the price that the victims paid. And as always it was the poorest who paid the highest price. I know I was there.

Victor A. Dixon- April 28, 2013
Revised October 14, 2013

Victor A Dixon attorney and social scientist

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A Civil Conversation

In the wake of the massacre in December 2012 of 26 children and adults at Sandy Hook elementary school in Connecticut by a man with an assault rifle, it would seem impossible to have a civil conversation about guns and gun ownership.

Surprisingly, Dan Baum's Gun Guys: A Road Trip, takes the discussion of guns to unexpected amiable territory. He writes about guns from a personal perspective, taking the stance that they are a sporting item and require a certain amount of expertise much like those who like to shoot a bow and arrow.

Mr. Baum begins his tale of gun fascination from when he was elementary school age in 1961 and attended Sunapee summer camp in New Hampshire. He said he was a "pudgy, over mothered cherub amid a tribe of lean savages." Learning how to shoot guns at camp made him special. He was a good shot, and this expertise won him a bronze Pro-Marksman medal from the National Rifle Association. He got a patch his first year at camp and every year after that.

He was hooked.

But he had no mentors among his friends or family members who shared his interest in guns. As someone outside the world of avid, pro-gun-rights gun owners, Mr. Baum decided to take to the back roads of the U.S., visiting many gun stores, rifle ranges and gun shows to find what lies behind the powerful allure of guns for others.

Not fitting the stereotype, Mr. Baum knew he'd butt up against some barriers. He describes himself as a New Jersey Democrat now living Boulder, Colorado, a bastion of liberal pacifists. "I'm a stoop-shouldered, bald-headed, middle-aged Jew in pleated pants and glasses." He used his NRA baseball cap and NRA lapel pin as camouflage to try to fit in more.

He started his research by going out in public wearing an "open carry" gun strapped to his hip for everyone to see. He was looking for reaction from ordinary folks.

His first stop was a Home Depot. He made every effort to be obvious, but he got no reaction -- positive nor negative.

Next stop was the local Apple Store. Surely, he wrote, that would cause a response from the technology folks. Again, no reaction. Finally Mr. Baum steeled himself to enter Whole Foods. Clearly the clientele from such a store would have something to say.

Nope.

Mr. Baum said he felt like a ghost. Or was there some sort of weird psychological tic preventing the Whole Foods customers from seeing the gun because it was too outrageous to be true, e.g. "This is Boulder; that can't be a gun."

His next move was taking the course to get a permit for carrying a concealed, loaded weapon. His instructor stressed the importance of assessing certain "Conditions" for people wearing loaded guns.

Condition White stood for total security: home with the dog at your feet and your home alarm on.

Condition Yellow stood for being aware of one's surroundings, such as walking around town.

Condition Orange was awareness of a possible threat.

Condition Red was responding to a real threat.

Mr. Baum wrote, "I found that I wasn't so much in Condition Yellow as Condition Day-Glo Yellow. Everything around me appeared brilliantly sharp." Mr. Baum's hyper awareness spilled over into his reaction for those walking around him. He described the feeling of pity he felt for passersby who did not know he was capable of wreaking havoc at any moment.

"And there I was, striding among them, uniquely capable of resisting whatever violence might be their portion. It surprised me that it made me feel rather noble."

Dan Baum made a rule not to let himself not get drawn into political discussions, and he kept his promise when he wrote the book months before the events of Sandy Hook and its initial publication. He said his mission was finding out who else besides himself was a self-styled "gun guy," which he did well.

However, he did venture in to the world of politics in a postscript he wrote after the events of Sandy Hook.

In the same reasonable style as in Gun Guys, Mr. Baum points out that things have to change in the way we manage, or mismanage, gun sales in this country. He wants to see more control on how guns make their way into the world of criminals and criminal behavior.

He closes his postscript with "... it's not good enough to say, 'That's just the way we are.'"

The appeal of this book is Mr. Baum's approach to gun ownership. The skeptical reader will be surprised. He does not preach the second amendment nor argue for or against the value of gun ownership. He leaves that up to his audience.

Gun Guys is smart and informative -- an education for anyone the slightest bit curious about why gun owners are so passionate about their guns. Dan Baum's stories are alive, engaging, and earnest.

Reviewer Geri Spieler is the award-winning author of Taking Aim at the President: The Remarkable Story of the Woman Who Shot at Gerald Ford (Palgrave Macmillan, 2009). She is also a member of the National Books Critics Circle.

Geri Spieler is author of "Taking Aim At The President: The Remarkable Story of the woman who shot at Gerald Ford," and a journalist. She teaches Internet Research Classes

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Politics Inc - Fraud and Deceit

In 2008 there will be another round of presidential primaries, but with the primaries over a year away there is an almost unknown candidate John Cox of Illinois. John Cox is a businessman, tax attorney, and author. Who at 50, has had two failed attempts at office in Congress in 2000 and in the 2002 Senate, believes that this is the right time for him to make an attempt to take control of the Executive branch. Cox at this time has been gathering support in political circles in New Hampshire, South Carolina, and Iowa.

In his book Politic$, Inc., Principle, Not Profit, Why We Need Statesmen, and Not Career Politicians, he makes his views clear about career politicians who have taken up residence for life in Congress. In his book In Politic$, Inc. he draws on the point, that politicians are more concerned about their personal wealth and power than the well being of the people, or the state of the Nation. He reflects on his past involvement with tax officials, who don't seem to know that they are public servants.

Cox offers solutions to many of the governments problems such as, the out of control spending, the runaway train syndrome that we have with regards to the Social security administration, medical care, and the crumbling education system. This he blames on politicians who would rather take the path of least resistance instead of the sometimes more difficult solutions, and all this for political gain. Therefore abandoning a chance to correct some of our most pressing problems .

This book may be the driving force for an electorate searching for a real Conservative leader. In his missive Cox states that he believes that term limits should be implemented. This would resolve issues of Legislators who are unable to show political restraint .

Cox, whose mother was abandoned by his father when John Cox was an infant, is opposed to abortion on demand, and he has strong feelings against amnesty for illegal aliens. This businessman is a strong supporter of a high tech missile defense system to deter other nations from pursuing a nuclear weapons program. He is strongly committed to pursuing a plan for improvements to education, health care costs, and environmental improvements that would be acceptable and fair with minimal interference from bureaucrats.

Politic$ Inc. is not fool proof, and will not solve all the nations problems. Most of Mr. Cox's suggestions and proposals will rely on a new breed of public officials, but also a new type of electorate. A much more responsible electorate. The removal of long term politicians from office will be a risky move, to say the least, and could result in democrats making gains on the number of seats being held.

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