Interesting People no image

Published on April 10th, 2013 | by Yellow Magpie

2

Margaret Thatcher: A Costly Legacy

Margaret Thatcher A Costly Legacy Photo By Jay Galvin

With the death of Margaret Thatcher closure has come to the reign of one of the most divisive and controversial figures in world politics. To some she was a hard-nosed woman who stood up to the worker unions, closed-down uncompetitive businesses and restored Great Britain’s economy. To others she was a figure of such contempt that many found themselves at organised street parties celebrating her death.

Saint or Sinner? As usual, the truth is somewhere in the middle. Nevertheless, it is the problems that her policies have caused that will be her lasting legacy.

An Inherited Mess

There can be no white-washing of the fact that Thatcher inherited a veritable mess when it came to the state of the United Kingdom’s economy. Great Britain was dealing with crippling stagflation in which there was both high unemployment and runaway inflation. Worker’s Unions had abused their position of power and were trying their best to pull the UK into a price/wage spiral.

Margaret Thatcher: A Costly Legacy

Thatcher’s Solution

Margaret Thatcher’s solution to the problems besetting the economy was to sell-off businesses that were not profitable. State-owned companies were closed down and those that were profitable were sold off and privatised. At great cost, the unions were stood up to and eventually their power was curbed. The wholesale closing down of the mines added greatly to the unemployment levels.

Thatcher then cut public expenditure while raising taxes adding to the problems. Although for some industries greater levels of unemployment was a boon allowing them to raise competitiveness.

However, it must be noted that previous government investment in the North Sea Oil and Gas fields was starting to pay off. This allowed Great Britain to become a net exporter of oil and bring in much needed revenue. Instead of the manufacturing industry providing the bulk of the United Kingdom’s income Thatcher oversaw the emergence of a much larger, deregulated financial sector.

An Economic Legacy Of Catastrophe

Ultimately, Thatcher’s economic plan was to have disastrous long-term consequences for the United Kingdom. The problem with the closure of the coal mines was not that it was implemented but rather in the method of its implementation. Workers were given too short a period to readjust. Instead of  giving those newly laid-off training, with a view to employment in other industries, they simply formed queues outside of social welfare offices.

Thatcher’s economy was fixed by the outsourcing of labour that was made possible by a globalised world. In reality, it is simply shifting the burden further into the future. Ultimately, it doesn’t provide a solution but rather places the problem along the road for future generations to deal with.

 Margaret Thatcher: A Costly Legacy Miner Strike Picket

Without any manufacturing industry the UK has become a net importer of goods relying on cheap foreign labour to satiate domestic demand. The problems therefore are the accumulation of debt to pay for these goods and increasing prices as foreign labour becomes more and more expensive irrespective of geographical location.

Great Britain’s financial sector become a huge behemoth with little to no oversight. Banks were leveraged far in excess of the safeguards of traditional deposit-based banking. The conservative ideals of cautious risk-adverse policy was replaced with dangerous financial products that would become a major factor in a global recession.

An Error-Prone Foreign Policy

If Margaret Thatcher’s economic policy was divisive the same could said for her foreign policy.

Though opposed to apartheid, Thatcher was openly against the economic sanctions against the racist South African government. At one point she labelled Nelson Mandela and the African National Congress terrorists. During her tenure the UK actively traded with the apartheid government much to the dismay of large swathes of the UK public and Third World Leaders.

Margaret Thatcher supported the Khmer Rouge, an organisation responsible for the genocide of between two and three million people. She even went as far as providing SAS training to the regime.

Likewise she drew heavy criticism for her relationship with the Chilean dictator, Augusto Pinochet, whose regime repressed in excess of 40,000 people with three thousand killed.

Northern Ireland

Thatcher’s relationship with Northern Ireland was quite telling. Her handling of the Hunger Strikes, which were probably tempered by personal feeling when she was subjected to an IRA attack, had a very negative effect on Northern Ireland. Conflict escalated and the IRA and Sinn Fein gained larger support.

Finally, it could be argued that her actions led to prolonged conflict in Northern Ireland. Although peace was eventually reached there is a chance that this may have occurred much sooner.

Margaret Thatcher: A Costly Legacy Northern Ireland Photo By Jeanne Boleyn

Margaret Thatcher: A Costly Legacy

Margaret Thatcher had several flaws that would have profound consequences for the United Kingdom. Her domestic policies were underpinned by the fact that she fundamentally didn’t understand human nature. People are far less independent and liberal than we would like to imagine. Unlike other primates we place a great deal of emphasis upon learning from each other.

This means we have a tendency to copy the actions of those around us. By not understanding this and not providing an alternative opportunity for employment she helped to foster a culture of dependency that still marks large areas of Great Britain to this day. Thatcher never understood what makes us human her ‘there is no such thing as society‘ underscores this.

Thatcher was also a fundamentalist which is a highly dangerous trait to have in a leader. Her zeal in pursuing Chicago Boy economic theory has left a an indelible mark not just upon the United Kingdom but upon the whole world as well. It was this fundamentalist zeal which contributed to overblown financial sectors with little to no supervision that led to the global economic meltdown.

Margaret Thatcher: A Costly Legacy With Ronald Reagan (Camp David)

Thirdly, Thatcher lacked caution. Coupled with her narcissistic tendencies, she managed to frequently convince herself that her decisions were necessary regardless of the consequences. No doubt, this stems somewhat from being brought up during the Second World War in an environment which needed action rather than inaction.

If her claim about only getting by on four hours of sleep was true then her decision-making ability would have suffered greatly from lack of sufficient rest. Like many of her choices and decisions, this was but another area that Margaret Thatcher believed she was correct.

 Margaret Thatcher: A Costly Legacy With Ronald Reagan

Further Reading

Wikipedia is a good source of further information on Margaret Thatcher’s reign as British Prime Minister.

For more insight into the role deregulation and the Chicago Boys economic theory you can check out Yellow Magpie’s Milton Friedman: The Man Whose Philosophy Brought The World To Its Knees (Part One) and The Legacy Of Milton Friedman: The Economic Virus Spreads To Europe And The US (Part 2) here.

For a better understanding of human versus chimpanzee learning behaviours read The Chimpanzee: A Creature That We Continually Underestimate.


About the Author



Back to Top ↑