There's one point about Thatcher's premiership that I fear is being under-rated. It's that her success was partly inadvertent. I mean this in at least three different ways.
First, the recession of 1980-81 was not supposed to happen. The theory was that, by announcing credible targets for monetary growth, inflation expectations would fall and hence inflation would come down relatively painlessly. This, of course, did not happen. Monetary targets were overshot and we got a severe recession (...)
But this corporal punishment had (for some!) a favourable side-effect. In clobbering labour's bargaining power, it helped increase profit margins and profit expectations and animal spirits, and thus laid the basis for stronger investment in the 1980s.
Yes, Thatcher promised to weaken the unions. But she envisaged doing so by reasserting the rule of law, not by creating mass unemployment.
Secondly, her relaxation of credit controls in the early 80s had a bigger economic impact than she intended. She envisaged these as a step towards economic freedom. But they were more than that. They permitted a consumer-driven society and economy. This was not her intention. As the Heresiarch rightly emphasises, her vision of Britain was of a property-owning democracy of savers with moral restraint. She got indebted spendthrifts. She wanted the British people to be like her father, but they turned out more like her son.
Thirdly, the closure of the coal mines did not turn out as planned. Thatcher claimed that the loss-making pits were "uneconomic." Her critics, such as Andrew Glyn, said this was mostly untrue because it was cheaper for the government to subsidise the pits than it would be to pay unemployment benefits. Thatcherites in turn responded by claiming that redundant miners would get work elsewhere. We now know that they were mostly wrong; employment in mining areas never fully (pdf) recovered (pdf) from the closures.The free market conception of a flexible labour force able to move easily from job to job was, in this respect, mistaken.
And yet the miners' strike is seen as a victory for Thatcher - as a triumph for capital or for the rule of law, depending on your taste (and, with anachronistic hindsight, a reduction in carbon emissions). The human cost of the pit closures, and the refutation of the (explicit) economic theory behind them are conveniently overlooked by Thatcher's supporters.
In these regards, Thatcher's success is another example of John Kay's obliquity - of achieving ends unintentionally.
And this raises a wider question. If the greatest political figure of the last 60 years was a success largely unintentionally, what does this tell us about the nature of politics?
Tuesday, April 09, 2013
Publicada por Miguel Madeira em 15:15