All entries for Tuesday 09 April 2013

April 09, 2013

Margaret Thatcher and Me

Writing about web page http://www.voxeu.org/article/economic-legacy-mrs-thatcher

Like a million other bloggers and tweeters, I woke this morning thinking about Margaret Thatcher, who has just died.

The front page of this morning's Coventry Telegraph calls her "The woman who divided a nation." In the Financial Times, Janan Ganesh notes that those who call her policies "divisive" often wish to avoid a simple fact: "It is almost impossible to do anything significant without enraging some people"; at best, they indulge "the fantasy that her reforms could have been undertaken consensually."

In my heart, at the time, I was enraged by what Margaret Thatcher did. But now she belongs to history. In my head, looking back as an economic historian, I have to acknowledge the necessity of it. When she came to power, our country was a pretty miserable place: stagnant, strife-torn, and full of bullies. Money was more equally distributed than it is now, but money was worth less than power, and power was highly concentrated in the hands of state monopolies, private monopolies, and organized labour. If you are among the many that think heavier taxation and more market restrictions can make a more consensual, peaceful society, you need to take a closer look at this period of our history. In short, Margaret Thatcher did not invent social division and conflict, which were already present, but she redrew the lines in favour of market access and free enterprise.

When the economic historian looks back, what else is there to see? No one has looked back more clearly than my colleague Nick Crafts on yesterday's Voxeu, so I'll leave the last word on that to him.

I'll finish on a personal note. Nothing annoyed me more at the time than what Margaret Thatcher famously had to say about "society," for I am a social scientist and what she appeared to say was that society does not exist:

I think we have gone through a period when too many children and people have been given to understand “I have a problem, it is the Government's job to cope with it!” or “I have a problem, I will go and get a grant to cope with it!” “I am homeless, the Government must house me!” and so they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no government can do anything except through people.

Yet a close reading shows that Thatcher had in mind something very close to the kind of model that all economists must use to understand the distribution of income in society, based on the idea that income must be produced by some before it can be redistributed to others:

When people come and say: “But what is the point of working? I can get as much on the dole!” You say: “Look” It is not from the dole. It is your neighbour who is supplying it and if you can earn your own living then really you have a duty to do it and you will feel very much better!”

It's a message for today. I didn't want to hear it at the time. Thatcher didn't seem too bothered by that, and that annoyed me even more. It's still hard for me to say it, but it was a good thing she didn't care.


I am a professor in the Department of Economics at the University of Warwick. I am also a research associate of Warwick’s Centre on Competitive Advantage in the Global Economy, and of the Centre for Russian, European, and Eurasian Studies at the University of Birmingham. My research is on Russian and international economic history; I am interested in economic aspects of bureaucracy, dictatorship, defence, and warfare. My most recent book is One Day We Will Live Without Fear: Everyday Lives Under the Soviet Police State (Hoover Institution Press, 2016).



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