Wednesday, 10 April 2013

Thatcher's legacy

Any person who forces the world to turn their name into a noun with an "ism" ending must be someone really special.

Lord Keynes left us Keynesism. Marx left us Marxism. Buddha left us Buddhism.

So what should we make of the fact that Baroness Thatcher left us with Thatcherism?

margaret-thatcherThatcherism brings very conflicting emotions to people on opposite side of the political philosophy spectrum.   For conservatives Thatcherism is the re-assertion of market rule over too much government intervention that was creating excessive socialism and economic rigidities.  This had led to the winter of discontent in Britain in 1979 when cold weather and indiscriminate strikes, led by discredited Arthur Scargill who created far too many problems for Labour Prime Minister James Callaghan, brought life a miserable halt before Thatcher won her first election in May 1979.

For the liberals Thatcherism destroyed the social fabric of modern societies, brought about great disparities of wealth and incomes and contributed in no small measure to the banking crisis that hit us in 2008 and is still haunting us.

The truth as always is somewhere in the middle.   In 1979 Britain needed Margaret Thatcher.   The unions in Britain were abusing their strength ordering strikes as a first order rather than as a last resort.   Labour was too docile to stand up to this abuse of power and the country needed an iron lady that was prepared to go through strikes come hell or high water until the extreme union leadership was discredited and removed.

As most human beings who register a sequence of successes there comes a time when the person's determination and strong character morphs from a catalyst for positive change to undiluted arrogance.   When this happens the person stops analysing and taking objective decisions and gradually turns subjective, deciding on the basis this is right because I say so.

This happened to Margaret Thatcher too.   After substantial successes between 1979 and 1984, the tandem of re-elected leaders on both sides of the Atlantic, Reagan and Thatcher, pushed their economic credo beyond the limits of prudence.  Their strong belief in the markets' unconditional ability to allocate resources fairly and effectively, their misplaced belief that financial markets can effectively self-regulate, their false belief that government is always the problem and never the solution, sowed the seeds of the financial crisis that blew up long after these leaders had retired.

Thatcher never lost an election.   She had to resign as Prime Minister when her cabinet revolted and could not take her viciousness anymore especially when she practically started insulting those who opposed her decision to impose a highly regressive and unpopular poll tax.

Thatcher is a text book example how an overstay in power can convert the ablest of leaders into arrogant and ineffective specie.

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