How Thatcher Embodied The Conservative Lie
April 17, 2013
by Martin Odoni
So, the house from Kansas has finally departed the cyclone and crash-landed, and the victim whose feet protrude from under its foundations is the Wicked Witch of Grantham. Margaret Thatcher is no more.
As I type this, it is in fact nine days since her final demise, and they were nine days of almost stupefying predictability. Every day, we’d hear a sentimental Tory politician of past or present offering words of mourning and nostalgia that would completely misrepresent the realities of the 1980’s, words that as soon as I heard them would provoke me to sneer, “Oh, I just knew he would say something like that.” And every day, a thousand other people would respond with equally predictable expressions of joy and celebration, including street parties in many of the nation’s favourite cities; predictable not least because most of them had been loudly promising for years that a party was precisely what they would throw once the Iron Lady had kicked it.
Now I have said more than once before that I have little time for people who go so far as to organise celebrations for the passing of a political or military opponent – see https://thegreatcritique.wordpress.com/2011/05/02/the-laugh-of-triumph/ – and indeed the more prolonged and triumphant the revelries become, the more ill I start to feel. This is true even for the worst of tyrants, and the reality is that, heartless, anti-democratic, and dictatorial though Thatcher was, she wasn’t quite the free market answer to Pol Pot (her prized ally against Vietnam) that she is sometimes painted as.
I concede I allowed myself the privilege of a smug grin for most of the day when her death was announced, and even a satisfied drink or two when I got home from work, but I was never going to organise a parade through the streets. As much as a matter of seemliness, it would be quite pointless and empty to start partying, as her death has come much too late for it to have any beneficial effect for anyone whose lives she made so miserable while she was Prime Minister. She fell from power only a few months after her favourite false-bogeyman-of-Africa, Nelson Mandela, was freed from prison, and since then, the real world Margaret Thatcher has been increasingly a figure of quaintness. Either clinging with increasing exasperation to obsolete, 1940’s Neo-Toryist ideas of patriotism, obsessing over the phantom ‘menace’ of Trade Unions that were already more or less crushed by about 1987, or just retreating into rather poignant and enfeebled dementia. By the end of her days, she was no longer a figure to be hated so much as a doddering, mad old granny to be treated with reluctant pity.
In her time, she was like the 2005 revival of Dr Who; you hated her, everyone you knew hated her, you were convinced everyone in the country hated her, and you could never find anybody who would admit to not hating her. And yet somehow, every election, she kept getting back into power anyway. Just like the new Dr Who is largely made up of over-loud, sentimentalist rubbish, but when it comes down to it, nobody dares to suggest it should be taken off the air.
Why did Thatcher keep getting back in though?
One argument I’ve been hearing a lot over the last few days is that she was prepared to face realities that her predecessors – both Labour and Conservative – were too blind to accept. The 1970’s, according to these people, were the darkest, gloomiest and shabbiest decade in living memory (er, never heard of the Blitz, anyone?) with the structure of British society wearing thin under the grinding strain of planned economics, nationalisation of industry, and subsidisation of failure – be it failed industries or indolent people. Thatcher was respected, they argue, simply because she formalised reality; she merely did what would have had to be done sooner or later, they say, irrespective of who was in power.
The standard hagiographic clichés to sum this view up have been as follows; –
“She deserves our love and respect, because she put the ‘Great’ back into Great Britain!”
“Even if you didn’t agree with her, you have to admire her convictions!”
“The country was about to go bankrupt. Thatcher knew we couldn’t keep paying for things we couldn’t afford!”
“She really believed in what she stood for!”
But is any of this really true? The trouble is that most of the people who say it are part of the large minority who inevitably benefited from the changes she made, which were designed to concentrate wealth. Many of these people were part of the obnoxious ‘Yuppiedom’ culture of the mid-1980’s. But did Britain really become ‘Great’ again, given that it finally lost, once and for all, its production and resource bases, and so became completely dependent on foreign imports and investment to get by? Britain has mines across its length and breadth, and yet the country hardly extracts any coal, tin or iron from its own soil. Almost all such resources that the British use are now imported, creating trade deficits, and presenting the countries the resources are bought from with considerable potential to ‘strong-arm’ the British Government.
As for the secondary sector, contrary to popular myth, manufacturing is still alive in Britain. However, the great bulk of it is run from other countries these days, which again makes it very easy for multi-national firms to twist the arm of British policymakers, with the threat of closing factories and laying off workers any time the “economic climate in the UK ceases to be as appealing” i.e. any time that running a business in the UK becomes a bit more expensive or becomes subject to rules that already exist in other countries – workers’ rights that are actually worth something, for instance.
I am not disputing that the British primary and secondary sectors were in a poor way at the turn of the 1980’s, but what they needed was reform. That does not mean that they needed butchering, and the price the UK has paid in the decades since Thatcher just dismantled them and sold off the assets has been a very high one, in the sense that, far from being ‘Great’, the country has almost ceased to be able to sustain itself without foreign investment. (Some might well argue, given how much Britain was dependent on lifting unpaid resources from its Empire in past centuries, that this ‘greatness’ was always an illusion.)
And did Thatcher really know we couldn’t keep paying for things we couldn’t afford? And more to the point, did she put a stop to it? On close analysis, the answer appears to suggest a split-personality at best. Roughly speaking, she wanted to cut public spending, but she didn’t know how to do it. At all. Yes, she cut spending on education, health, and support for the unemployed, but in real terms, public spending almost always went up during the period from 1979 to 1990. In only two years while she was in office did public spending decline. In all the others, spending continued to go up, even though she was reducing monies paid to its previous beneficiaries.
The reason for this is as true of her as it has been of almost every prominent Tory in the years since; she just never ‘got’ (perhaps wasn’t willing to ‘get’) the circulatory nature of how an economy operates. She understood enough that low taxation could plausibly increase private spending, and so increase profits for companies, which in turn would lead to greater tax yields. Unfortunately, she couldn’t spot everything else that could and would happen all around it when spending is reduced in a frantic rush to allow taxes to be cut in the first place. She seemed convinced that everything could be solved with a mixture of ruthless impatience and aggression.
The difficulty was that she denationalised or closed down much British public industry. Some people will sniff, “Good, less time and money spent on failing industries” at that, but this is not only a generalisation, it is also short-sighted. For consider, what other knock-on effects would happen when you close down firms, be they private or public, and thus make their staff unemployed? The answer is, of course, those who have lost their jobs will stop spending, because they have no money to spend. And so the shops and businesses who had previously profited from their custom suddenly lose trade. And as the businesses lose trade, revenue would go down, offsetting the benefit of the tax-cuts. The top and bottom of the matter in the early-1980’s was that the tax-cuts were not sufficient to increase tax yields, because they would not result in increased sales all around, nor in companies taking on more staff. Sometimes they would even have to lay off staff to cope with the loss of sales, repeating the cycle. This is a contributory reason why unemployment surged so wildly for much of the decade.*
It was therefore necessary to compensate for the loss of spending power by allowing people to stay on benefits – albeit reduced – even though Thatcher never really believed in them and tried to make them harder to obtain. (This goes to show that, contrary to right wing dogma, benefits are not only good for the disadvantaged, they in fact provide good stimulus for an economy, at least in the short term, as they make sure that those who are out of work can at least carry on spending money.) So public spending was merely diverted, not reduced, from paying for people to work – which at least provided an end-product – to paying for people merely to avoid starvation. Given Thatcher was always so obsessed with her father’s notion that, ‘Anyone can do well so long as they work hard,’ and therefore wanted to end state-support for those out of work, this does rather put a different complexion on matters for those who say that she “believed in what she stood for”. Her own hyper-aggressive approach cornered her into doing the opposite. Whether or not you see that as a good thing (which I do – benefits are not only sound morally, but they are, as I explained above, of far more practical value than they are often given credit for), it is clearly a paradox in her position.
But even more so, when people say Thatcher “believed in what she stood for”, it rather invites a question; what exactly did she believe in? This is where we arrive at the central lie of her entire worldview. She believed in, and embarked on, a campaign of Milton Friedman’s monetarist ideas. The monetarist philosophy argues that the state should not be allowed to interfere in the market at all. The less regulation there is, according to Friedman, the freer the market becomes to take the actions that are needed to keep an economy ticking over and vibrant. The more a state intervenes, he believed, the more reluctant companies would become to make decisions, or to employ staff.
But further, he also theorised about one of the sporadic blights that haunted many a successful economy. That was inflation, the phenomenon of a currency declining in value. Inflation can be caused, not just by economic hardship, but even by economic success. The better an economy is doing, the more people there will be in work, the more money there is moving around, and the more people there will be with money to spend. And in all probability they will spend it. When spending is not merely high but manic, demand will be high. And when demand is high, the tertiary sector will know it can afford to charge the maximum price for its goods and still make its sales more often than not. The higher a price people have to pay for goods means, by definition, that the currency they are using is worth less than it used to be, for they are unable to buy as much for the same amount of money as they could previously. Friedman’s idea to address that was to keep wages for the majority low. If people couldn’t afford to buy much more than the occasional luxury, he opined, then demand could be kept from turning manic.
The best way of keeping wages low, Friedman argued rather insidiously, was to keep demand for labour low. One of the main circumstances that cause wages to rise is when there are fewer workers available than the number that are needed by industry. At such times, those people who receive an offer of work have a powerful bargaining chip with which to negotiate a better wage, for the simple reason that the employer may not have an alternative candidate to turn to. (In England, the aftermath of the Black Death of the Fourteenth and Fifteenth Centuries was a prime example of that. The population had halved in size, and suddenly there was a severe shortage of workers available to farm the land, and so the surviving serfs began to demand much better terms from landowners. Any landowners who refused to do a deal would soon see the serf walking away to offer their services to someone who had a better grip on reality.)
The answer as Friedman saw it was to make sure that demand for work was higher than the demand for labour. This is to say, the number of people looking for work needs to be substantially higher, at least in monetarist eyes, than the number of jobs available. That way, any time a candidate is angling for a job, they won’t be in much of a position to haggle; if the candidate refuses the offer put on the table in front of them, the employer can be sure of finding somebody else who will tolerate low-payment terms soon enough, because the number of unemployed people to choose from is substantial, and most of them will be desperate for an income.
By the cynical logic of Friedmanite thinking, unemployment – usually between five and ten per cent of the working-age population – is a good thing, as it keeps inflation contained. This is to say, monetarism wants there to be unemployment.
And here is the lie in Thatcher’s philosophy, indeed in conservative philosophy as a whole, not just in the UK but around the world. Thatcher hated unemployment, and she despised those people who were unemployed for long periods of time. Conservatives the world over despise the unemployed. They speak of them as ‘scroungers’, or ‘parasites’, or ‘moochers’, and are forever grailing against the ‘burden’ that benefits claimants heap on ‘hard-working’ (by which they really mean upper-Middle Class) society. Thatcher always maintained unflinchingly that anyone who needs help should get up and help themselves, and that if anyone wants to get on in life, they will always be able to do so, as though it is a simple matter of trying a bit harder.
And yet, while loudly and contemptuously berating what she (quite wrongly) called ‘parasitism’, and the largely mythical culture of dependency, she was very actively, very willingly, even proudly, creating more unemployment, and making it more or less impossible for unemployment ever to be really eradicated. It is quite true that, under James Callaghan, the era of full employment had already ended – unemployment had increased to one and a half million by the time he fell from power in 1979 – but Thatcher made no attempt to stop the slide. On the contrary, she butchered public industry, and that soon doubled the sum, probably worse than doubled it. (We may never know the exact real number of Britons out of work around 1983, thanks to the rather obvious figure-fiddling that was going on at the time, but there is a growing suspicion among historians that the number might even have exceeded four million. In a population of under sixty million, as it was at the time, that is truly horrendous.)
And Thatcher revelled in it. She wasn’t sorry for it, she wasn’t hesitant to do it. She wanted to put large numbers out of work, because it was what the monetarist doctrine told her to do; to get Government out of the economy by denationalising, and to reduce demand for workers. And the most vile aspect was that she offloaded the blame for the consequences onto her victims; she condemned people for being unemployed, while condemning them to unemployment. She castigated those who were out-of-work, while taking away their option to be anything else.
So either Thatcher did not believe in what she stood for after all, or she believed in two mutually exclusive premises, and tried to speak up for both of them. Either way, she was lying. Lying to the country, or lying to herself, well who knows? But what she said and what she did were not compatible, and almost every ‘Neoliberal’ conservative since her time – not just in the UK, but in the USA, Australia, Italy, Germany and many other countries beyond – who have invoked those same philosophies, have been telling the exact same lie.
The lie is to say that being unemployed is shameful, while making sure that there will always be large numbers out of work. It is a lie used as a substitute for justifying monetarist policy. The policy is convenient, so conservatives adhere to it, but it has terrible repercussions for innocent people, and will always cause opposition. The most effective way of evading criticism for unfairness is to blame its victims for their own misfortune. To condemn them for their ‘idleness’ or their ‘profligacy’. So when conservatives throw ordinary people on the scrapheap for the sake of monetarist convenience, the easy way to avoid a shaming argument is just to condemn those who have been scrapped. Call them ‘dependent’. Call them ‘parasites’. Call them ‘useless’ or a ‘burden’. Call them ‘lazy’. And try not to let attention be drawn to the fact that they are on the scrapheap because conservatives put them there – usually without even consulting them.
This is why I find Tory appeals for ‘respect’ over the last few days, in response to the anti-Thatcherite rhetoric, to be empty, pompous and two-faced. Conservatives have spent their lives insulting the poor, often in Thatcher’s own name. If the poor wish to condemn Thatcher in return, when finally she is gone for good and can hurt them no more, who can blame them?
So now, in the aftermath of Thatcher’s funeral – insultingly paid for by public funds of all things – and a week of listening to the usual history-rewriting, dewy-eyed Tory mush about Thatcher being the ‘saviour of Britain’, I look back on those vulgar days of revived class snobbery in the 1980’s, and compare them with now, and realise that they are right in a sense. She did save Britain, but not in the way her acolytes would have us believe. What she saved was Old Britain. Not the Britain of state-run industries or trade unions, but a much older idea. The Britain of elitism; sure the elite may have changed names, or even where some of them came from, but they were still an elite as much as the old aristocratic ruling class of previous centuries. The Britain of jingoism; a country where the definition of doing the right thing is being pro-British, thus allowing Thatcher to be dear chums with PW Botha, General Augusto Pinochet and General Suharto while condemning the African National Congress as terrorists. And a Britain that convinced itself it was ‘Great’ simply because it was British. As I said earlier, there was something unsettlingly Neo-Toryist about Thatcher’s worldview, like a 1940’s Conservative desperately trying to convince himself that Britain was not in decline after the colossal strain of fighting two World Wars in thirty years. Some people might acclaim Thatcher to be a radical, or even, really perversely, a ‘working class heroine’, simply because some of her Yuppie supporters emerged from the lower classes. But for most on society’s bottom rung, life got far worse thanks to her, and that was because she believed it should. Despite her claims, it was not possible for absolutely anybody to make it in her Britain by working hard. Hers was a Britain designed not to have enough to go around. Since the war, the nation had moved away from that old idea of itself, and the idea was starting to die out, only for it to be revived with a vengeance in 1979. That was the Britain that Thatcher saved – by reversing the steps taken away from it.
And if the public funding Thatcher failed to cut must now be used for her funeral, purely because conservatives like it, then it simply proves what many of us have known all along; ‘austerity’ does not mean cutting needless expenditure to repair the British economy. It means that, from now on, the Government will only spend money on the things that rich people like.
Should we even be surprised? That was what always happened in Old Britain. It is a sick but fitting tribute to Margaret Thatcher that, having restored Old Britain, she should be given the only kind of send-off that Old Britain could possibly like.
* Today, we have a similar problem with George Osborne’s one-eyed obsession with getting rid of public sector workers. Every single worker he gets rid of will end up with little or no income. How are they supposed to contribute to the nation’s already-dwindling cash-circulation when they have no money to spend? If he really believes that the cutback approach is correct – which it probably isn’t – he needs to do it in stages, offloading staff at a trickle, and allowing time for the private sector to take up the lost public sector workforce without it being hit by a private spending down-surge. Instead he is trying to remove many thousands of people from the state payroll en masse. By any perceived wisdom, of either the left or the right, that is self-destructive folly.