Postwar

But what Thatcherism stood for more than anything else was the ‘smack of firm government’. By the end of the Seventies there was much anxious debate about Britain’s purported ‘ungovernability’, the widely-shared perception that the political class had lost control, not just of economic policy but of the workplace and even the streets. The Labour Party, traditionally vulnerable to the charge that it could not be counted upon to steer the economy, was now open to the accusation, following the ‘Winter of Discontent’, that it could not even run the state. In their 1979 election campaign, the Tories made great play not just with the need for economic rigour and proper money management, but with the nation’s ostensible longing for strong, confident rulers.

Margaret Thatcher’s first election victory was not particularly remarkable by historical standards. Indeed, under Mrs. Thatcher’s leadership the Conservative Party never actually gained many votes. It did not so much win elections as watch Labour lose them, many Labour voters switching to Liberal candidates or else abstaining altogether. In this light, Margaret Thatcher’s radical agenda and determination to see it through can seem out of all proportion to her national mandate, an unexpected and even risky break with the longstanding British tradition of governing from as close to the political centre as possible.

But it seems clear in retrospect that this was just what accounted for Margaret Thatcher’s success. Her refusal to be moved even when her monetarist policies were apparently failing (to those Conservatives in October 1980 who begged her to reverse tack and make a U-turn in policy she responded: ‘You turn if you want. The lady’s not for turning’); her happy adoption of the Soviet description of her as the ‘Iron Lady’; her palpable pleasure at engaging and defeating a string of opponents, from the Argentine military junta in the Falkands’ War to the miners’ union leader Arthur Scargill; the handbag waved aggressively at assembled European Community leaders as she demanded ‘our money back’: all these suggest a clear appreciation that her primary political asset was the very obstinacy, the obdurate refusal to compromise, that so outraged her critics. As every opinion poll suggested, even those who didn’t care for Thatcherite policies often conceded a certain reluctant admiration for the woman herself. The British were once again being ruled.

Indeed, and for all her talk of the individual and the market, Margaret Thatcher presided over a remarkable and somewhat disconcerting revival of the British state. In administration she was an instinctive centralizer. To ensure that her writ carried throughout the land, she reduced the powers and budgets of local government (the 1986 Local Government Act dismantled Britain’s metropolitan authorities, taking their powers back to London, just as the rest of Europe was engaged in a large-scale decentralization of power). The direction of educational policy and regional economic planning reverted to central government departments under direct political control, while government ministries themselves found their traditional freedom of maneuver increasingly constrained by a Prime Minister who depended far more on a small coterie of friends and advisers than on the traditional elite corps of senior civil servants.

Margaret Thatcher instinctively (and correctly) suspected the latter, like their peers in the educational and judicial establishment, of preferring the old state-subsidized paternalism. In the complex conventions of Britain’s class-conscious politics, Margaret Thatcher—a lower-middle class upstart with a soft spot for nouveau riche businessmen—was not much liked by the country’s venerable governing elite and she returned the sentiment with interest. Older Tories were shocked at her unsentimental scorn for tradition or past practice: at the height of the privatization craze, former Prime Minister Harold Macmillan accused her of selling the ‘family silver’. Her predecessor, Edward Heath, who had once angrily described the well-publicized undertakings of a corrupt British businessman as ‘the unacceptable face of capitalism’, abhorred both Thatcher and her policies. She could not have cared less.

The Thatcherite revolution strengthened the state, cultivated the market—and set about dismantling the bonds that had once bound them together. She destroyed forever the public influence exercised by Britain’s trade unions, passing laws that limited union leaders’ ability to organize strikes, and then getting them enforced in the courts. In a highly symbolic confrontation in 1984-85, pitting the armed state against a doomed community of industrial proletarians, she crushed a violent and emotional effort by the National Union of Miners to break her government’s policy of closing inefficient mines and ending subsidies to the coal industry.

The miners were badly led, their cause hopeless, their strike prolonged more from desperation than calculation. But the fact that Margaret Thatcher won a battle that Edward Heath had lost (and that successive Labour leaders had ducked) immensely strengthened her hand—as did an unsuccessful attempt by the Provisional IRA to assassinate her in the midst of the strike. Thatcher, like all the best revolutionaries, was fortunate in her enemies. They allowed her to claim that she alone spoke for the frustrated, over-regulated, little people whom she was freeing from decades of domination by vested interests and by the subsidized, parasitical beneficiaries of taxpayer largesse.

There is no doubt that Britain’s economic performance did improve in the Thatcher years, after an initial decline from 1979-81. Thanks to a shakeout of inefficient firms, increased competition and the muffling of the unions, business productivity and profits rose sharply. The Treasury was replenished (on a one-time basis) with the proceeds from the sale of nationally-owned assets. This had not been part of the original Thatcher agenda in 1979, nor was privatization as such an ideologically-charged idea—it was the Labour Party, after all, that sold off the nation’s share in British Petroleum in 1976 (at the IMF’s bidding). But by 1983 the political as well as the financial benefit of liquidating the country’s state-owned or state-run assets led the Prime Minister to inaugurate a decade-long national auction, ‘liberating’ producers and consumers alike.

Everything, or almost everything, was put on the privatization block. In the first round were smaller firms and units, mostly in manufacturing, in which the state held a partial or controlling interest. These were followed by hitherto ‘natural’ monopolies like the telecommunications network, energy utilities, and air transportation, beginning with the sale of British Telecom in 1984. The government also sold off much of the country’s post-war public housing stock: at first to its current occupants but eventually to allcomers. Between 1984 and 1991, one- third of all the world’s privatized assets (by value) were accounted for by UK sales alone.

Despite this apparent dismantling of the public sector, the share of Britain’s GDP absorbed by public expenditure remained virtually the same in 1988 (41.7 percent) as it had ten years earlier (42.5 percent), notwithstanding Thatcher’s promises to ‘get the state off people’s backs’. This was because the Conservative government had to pay unprecedented sums in unemployment benefit. The ‘scandalously’ high figure of 1.6 million jobless that had so damaged Callaghan’s government in 1977 had reached 3.25 million by 1985 and remained one of the highest in Europe for the rest of Mrs. Thatcher’s time in office.

Many of those who lost jobs in inefficient (and previously state-subsidized) industries like steel, coal-mining, textiles and shipbuilding would never find work again, becoming lifelong dependents of the state in all but name. If their former employers went on in some cases (steel, notably) to become profitable private companies it was less through the miracle of private ownership than because Margaret Thatcher’s governments had relieved them of high fixed labour costs, ‘socializing’ the expense of superfluous workers in the form of state-subsidized unemployment.

There was something to be said for the privatization of certain public industries and services. For many years vital economic assets had been held in the public sector with little thought given to investment or modernization. They had been starved of cash, their performance cushioned against pressure from competition and consumer alike, their managers hamstrung by bureaucratic inertia and political meddling.[251] Thanks to Mrs. Thatcher there emerged in Britain a much-expanded market for goods, services and, eventually, labour. There was more choice and (though this took longer and remained imperfect) more price competition. When her successor, John Major, kept Britain out of the ‘social chapter’ of the European Union treaty, Jacques Delors accused him of having made the UK a ‘paradise for foreign investment’: a charge to which Thatcherites could justifiably and happily plead guilty.

As an economy, then, Thatcherized Britain was a more efficient place. But as a society it suffered meltdown, with catastrophic long-term consequences. By disdaining and dismantling all collectively-held resources, by vociferously insisting upon an individualist ethic that discounted any unquantifiable assets, Margaret Thatcher did serious harm to the fabric of British public life. Citizens were transmuted into shareholders, or ‘stakeholders’, their relationship to one another and to the collectivity measured in assets and claims rather than in services or obligations. With everything from bus companies to electric supply in the hands of competing private companies, the public space became a market place.

If—as Mrs. Thatcher asserted—there is ‘no such thing as Society’, then in due course people must lose respect for socially-defined goods. And so they did, as late-Thatcherite Britain began to take on some of the more unappealing characteristics of the American model that the Iron Lady so admired. Services that remainedin public