Learning from Thatcher's mistakes

In the mid-seventies a visiting official from the Soviet Union asked an important question to a British Civil servant “do tell me who decides how much bread is to be baked in London for tomorrow?”  This sounds quite surreal in 2013 but the frightening thing is, that if Margaret Thatcher had lost the 1979 election is very probable that we would have had a commissar for bread manufacture, deciding how much bread to bake for the proletariat. 

Will this be enough bread for Peckham?

Under consecutive Labour and Conservative administrations the state had increased its direct control (pay bargaining, state ownership, etc) and indirect controls (housing regulation and health) over all parts of society and the economy. This gradual drift into the command economy was not just the preoccupation of the Left, many Conservatives were willing accomplices.  Margret Thatcher put end to the command economy and saved Britain from a humiliating relegation to third world status.

The recent death of Margaret Thatcher has given both supporters and opponents alike the chance to reassess her contribution to modern Britain.  As always with Mrs Thatcher there is little in the way of balanced argument the Nation is still divided, this rift crosses all demographics and has even tripped up young people who were born well after her resignation as Prime Minister.  In the last few days there has been much discussion on whether it is tasteful to be critical of the Iron lady at this time of morning for her friends and family.  Undoubtedly some protest have gone too far and this is mostly due to the anarchy that social media now brings to all news events. 

This biggest sadness is that the cheap shots (the Ding dong song and funeral parties) detract from an important debate that needs to be had on her contribution to modern Britain and the world in general. This debate could be vital and is certainly well timed as the coalition press on with reforming our public services, a task Mrs Thatcher didn’t have time or the stomach for whilst in power.  Her main focus was on the market economy and improving efficiency in the market through tax incentives, deregulation and privatisation and this had an enormous and positive impact on our global competiveness and growth.  Her apparent neglect of the public services (health, transport, education, etc) was equally damaging and the successive governments have had to invest heavily to rescue our schools, hospitals, transport systems and even our armed services. As we contemplate the options to generate economic growth a better understanding of Thatcher’s legacy would be helpful.  Certainly more helpful that wondering if the new Director General at the BBC should allow the song Ding Dong the Witch is Dead airtime.

One of the lasting memories I have of the 70s were two BBC Panorama programmes in which Valéry Giscard d'Estaing (the French President) and Helmut Schmidt (the German Chancellor) were invited to pontificate on the ‘sick man of Europe’.  Can you imagine Panorama inviting M. Hollande over to lecture us on how to run our country today!  And for me this sums up Thatcher’s contribution; we were, in all respects, economically, culturally, militarily and diplomatically, a joke and she turned that around.

If we can escape the rude and mindless protest of the self-harming Left we should try to learn from the Thatcher years and how might we apply this to the big questions we face today.  It seems to me that on the negative side of the account the lack of industrial policy and poor commitment to education left us deeply damaged and we should learn from this. On the positive side the freeing up of markets and improved incentives to work hard were a terrific success and could be extended to health, transport, housing and education.  Importantly the underlying principle of lower taxes was the engine that created wealth and greed in equal measure and so there is definitely a heaven sent opportunity to learn from her mistakes and her triumphs to help us recover from the worst recession in living memory.  So we need the debate continue without it been drowned out by the impoverished protest of Left and the boorish response of the Right.