Counterparties: Thatcher’s economic legacy
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Margaret Thatcher, Britain’s longest serving Prime Minister, died today at the age of 87.
Thatcher famously said “there’s no such thing as society. There are individual men and women and there are families”. The BBC’s Stephanie Flanders sums up Thatcher’s economic legacy by saying that before her, there was “no such thing as the consumer. When she left, politicians spoke of little else… she helped force the rise of the individual at the expense of the collective”.
Dylan Matthews says that Thatcher’s economic policies were “heavy on union-busting, spending cuts, privatization and deregulation, undoing as much as she could of the social welfare state”.
Matt Phillips reviews Thatcher’s legacy as an inflation-fighter. When Thatcher left office inflation was running at 8%, down from more than 20%. That was due, in part, to reduced government spending — but it’s also worth remembering that Thatcher’s government predated the era of central-bank independence, so she (and her Chancellors) controlled monetary policy as well as fiscal policy. Her record on employment was more mixed. The UK’s jobless rate was over 10% for the majority of Thatcher’s leadership. It took nine years after she left office in 1990 for the rate to fall below 6%.
Thatcher’s government also fought, at times literally, with labor unions, most notably with coal miners in 1984-1985. The strikes were wrenching, widespread, and deeply political in a way Americans have not seen for more than a generation. The miners had terrible, dangerous jobs, and fought unsuccessfully to keep them. Megan McArdle concludes that the Prime Minister “destroyed an industrial system which had yes, provided workers with a secure livelihood, but yes, also done so at an unacceptable cost”.
An inextricable part of that legacy, McArdle argues, was a transformation: “post-1970s Britain has been a very good place for educated elites, and not very good for the post-industrial working class”. Former Labour Prime Minister Gordon Brown, on the other hand, thinks Thatcher’s policies helped usher in current levels of poverty and inequality.
Thatcher was an early euro-sceptic, and, as Joe Weisenthal says, rather presciently saw how richer European nations like Germany would balk at bailing out poorer nations. During a 1990 Prime Minister’s Questions, she warned that the single currency would result in “taking many democratic powers away from democratically-elected bodies to non-elected ones”. — Ben Walsh
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