9 lessons we can learn from Thatcher

Zoe Williams

Tuesday, 23 April 2013

These reflections were made by Zoe Williams at our recent event ‘What can we learn from Thatcherism?’ Further details and the audio recording from the night in can be found here.

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Lesson one: there is no such thing as a successful Thatcherite policy.

There is just a policy whose failures are not yet apparent.

When Thatcher died, Ken Livingstone said:

She created today’s housing crisis.

She created the banking crisis.

And she created the benefit crisis.

It was her government that started putting people on incapacity benefit rather than register them as unemployed because the Britain she inherited was broadly full employment.

She decided when she wrote off our manufacturing industry that she could live with two or three million unemployed, and the benefits bill, the legacy of that, we are struggling with today.

In actual fact, every real problem we face today is the legacy of the fact that she was fundamentally wrong.

Which brings me to Lesson one: there is no such thing as a successful Thatcherite policy.   There is just a policy whose failures are not yet apparent

Housing may be the best single example of this – I remember the local complaints about selling off council housing stock, and they all centred on corruption. What was Shirley Porter up to? What are the chances that the son of Thatcher’s housing minister will end up owning 40 flats?

The critique was never really systemic enough, and new Labour, in its spirit of cooperation, embraced the sell-off as classic, third-way politics, fostering values that we all shared, forged in a landscape beyond left and right. Everybody is in favour of home ownership. Tony Blair was, Gordon Brown was, Ed MIliband is.

But the fact is, this is no more than a macro game of Monopoly, played out at the same glacial pace that Monopoly often feels as though it’s going, in which the people who already have capital hold all the power, the people who need accommodation have no power at all, and what looks like redistribution of public money – housing benefit, to deal with the inevitable shortfall between rents and income – actually draws money away from the bottom and the middle, to deliver it to the top. It is absurd that, in the next spending period, £96 billion will go on housing benefit, and £4billion on building new homes. It is a complete misuse of public money. Which, obviously, started with Thatcher.

Lesson two: what the private sector is good for

On a related matter, the private sector is good for some things – it is quite good at efficiency, especially if, by efficiency, you mean “driving down wages”. But what it is spectacularly bad at is planning for the future, either economically, socially or environmentally. It’s not the private sector’s fault. It never signed up to be guardian of our long-term national aims. But everywhere one looks where reason dictates one thing, but reality is hurtling in the opposite direction, it is because governmental responsibilities have been abrogated and private companies or individuals have stepped into the vacuum. Why did London rents go up eight times faster than London wages, over the past decade? Why are we still debating whether to use hydrocarbons or renewables, when by the terms of our own climate change legislation, we should be drawing fossil fuel use to a close? Why are so many women being hounded from the workplace because daycare is too expensive to justify their working? Because the private sector is not forward thinking. If you want to invest, either in infrastructure or in people, you need to do so with public money and public servants…. Which brings us to

Lesson three: what poverty does to people

We know, thanks to thatcher, what happens when large numbers of people live in grinding poverty. We know what it does to educational attainment, we know what it does to public health, we know it causes relationship breakdown. It’s money, or lack of it. Divorce lawyers always poo-poo this suggestion, but that’s because, by dint of their being lawyers in the first place, they are acting for people at least one of whom has money. In the regular world, the two big spikes in lone parenting were in the mid-eighties and the mid-nineties. It peaked in 1993 and it’s hardly risen since, until now.

Ironically, having created the economic conditions that lead to marital breakdown, Thatcher then devoted a surprising amount of energy to blaming divorce on lack of backbone among “divorcing types”. Blaming character deficiencies of the poor for circumstances that are caused by poverty may or may not have started with Thatcher. So perhaps, to be more precise, what we learnt from Thatcher is that only someone who sought deliberately to undermine equality would ever have any truck with political solutions based on some classes being more moral than others.

Thatcher’s achievements in promulgating inequality and poverty were awe inspiring. In 1990, nearly a quarter of Britons were living on less than 60 percent of median income.

Lesson four: the private sector is not very good at competition

Besides having no interest in the long term, the private sector is not very good at competing.

Thatcherite policies that people always talk about are the ones whose effects were visible straight away – namely, destroying the unions and destroying Britain’s manufacturing base. The privatisation of energy has, arguably, had a greater impact than the destruction of any given industry, since energy companies (many of them, paradoxically, still nationalized, but belonging to other nations) don’t aggressively compete with one another: rather, they operate at around the same price points, appearing to differ (much like supermarkets) but actually differing only slightly. “Price fixing” is a strong term. But it’s marked, 30 years on, that the industries that really do us – energy, public sector commissioning, supermarkets and banking – are all governed by between four and six players, none of whose prices represents a genuine threat to any others. It all results in a pretty poor deal for the customer, in supermarkets, a terrible deal for the supplier and across the piece, an atrocious deal for the employee.

Thatcher’s unfettered marketplace results in something much more like an old school oligarchy than the flourishing, innovative mixed market that capitalism holds dear. It’s possible that Thatcher didn’t teach us this, Schumpeter did. But she created the situation that really rubbed our noses in it.

Lesson five: manufacturing matters

It is well known that Thatcher destroyed the manufacturing industries. In 1970, they made up over 20% of GDP, in 2010, it was under 10%.

Indeed, it was a crucial plank of the coalition’s strategy for growth, “rebalancing” the economy, away from the financial sector and back towards making things. But at the time Thatcher was in power, the destruction of these industries was portrayed very much as a set of personal tragedies, albeit on a pretty large scale, for the people who used to work in them. From a distance, we can see that, one way or another, we all lose out when the central vision for the economy is that there should be no central vision.

Lesson six: public spending is almost entirely unrelated to the statements governments make about how much they intend to spend

Since 1979, the highest spending as a proportion of GDP was Thatcher’s – 48% in 1981-83, and the lowest was Blair’s first term – 36% in 1999-2000. A related observation is that the damage governments cause in the name of saving money almost never saves any money. By the time we’ve realised this fact, unfortunately, the damage done to societal outcomes has dwarfed the amount of money they haven’t saved.

Lesson seven: having a woman in charge does not necessarily make for a better environment for other women, wherever they are on the pay spine

Thatcher famously never advanced any women in her own line of work, apart from Baronness Young, leader of the House of Lords in the early eighties.

She never had any sympathy with childcare as any business of the government’s – asked how she would help women with young children who wanted to work, she floated the idea that, if a woman wanted a little job, there was probably an auntie or a granny who could help out for a couple of hours a week.

And this is a trope that reverberates in every new political intake and movement, whether it’s Christine Lagarde ascribing her success to her feminine softness or Louise Mensch saying the length of a school day was a woman’s most important political concern. I think this might be the first thing Thatcher taught me personally – how to distinguish between feminism and rabid possessive individualism (or, if you prefer, capitalism with tits). Now I can do it with my eyes closed.

Lesson seven: having a woman in charge does not necessarily make for a better environment for other women, wherever they are on the pay spine

Thatcher famously never advanced any women in her own line of work, apart from Baronness Young, leader of the House of Lords in the early eighties.

She never had any sympathy with childcare as any business of the government’s – asked how she would help women with young children who wanted to work, she floated the idea that, if a woman wanted a little job, there was probably an auntie or a granny who could help out for a couple of hours a week.

And this is a trope that reverberates in every new political intake and movement, whether it’s Christine Lagarde ascribing her success to her feminine softness or Louise Mensch saying the length of a school day was a woman’s most important political concern. I think this might be the first thing Thatcher taught me personally – how to distinguish between feminism and rabid possessive individualism (or, if you prefer, capitalism with tits). Now I can do it with my eyes closed.

Lesson eight: what happens to wages without collective pay bargaining

The line that she smashed the unions isn’t quite right: she depleted their membership, certainly, from 13 million plus in 1979 to 7.5 million today. It’s still more than the membership of any political party. By some margin. But leaving that aside, here’s the big thing we’ve learnt – what happens to wages without powerful unions. They go down. They go inexorably down. Governments try to ratchet them up, but are not bold enough, and their solutions are weak. They end up subsidizing wages which nobody can live on. We all chip in to pay the wages that employers should be paying, and inequalities widen. We subsidise corporate superprofits. Minimum wages, not high enough to begin with, are subverted underhandedly or frozen openly in times of crisis. Care workers are hit hardest because they negotiate badly for themselves, believing themselves to be interchangeable because… they’re not unionized.

You don’t get a fair wage settlement by gift or by proxy, in other words. You get it when you all get together and fight for it.

Lesson nine; who wins how

Conservative governments get in when they can create a climate of fear, pessimism, jingoism, division and external threat.

Labour governments get in when they can create a climate of optimism, cooperation, possibility and hope.

So we really need to get cracking on that.

Zoe Williams writes for the Guardian. You can check her profile here and follow her on Twitter @zoesqwilliams

Topics discussed:

EqualityThe State

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