The Iron Lady

the question.

‘I do not think we are out of step,’ she declared at her post-summit press conference. ‘I think steadily others are coming in step with us.’³⁸ Alternatively she persuaded herself that it was actually good to be isolated, that in being isolated she was actually leading Europe. ‘Sometimes you have to be isolated to give a lead.’³⁹ But this was self-delusion. She had a legitimate alternative vision of Europe. But right or wrong she was the worst possible advocate for her vision. Her ceaselessly confrontational style became – in the view of her long-suffering colleagues who had to try to pick up the pieces after her barnstorming performances – ‘counterproductive’. ⁴⁰ ‘It wears out a bit,’ Douglas Hurd recalled. ‘I think that quite a lot of her colleagues began to regard it as theatre.’⁴¹

The truth is that Mrs Thatcher’s European policy was no policy at all. It reflected, but also greatly exacerbated, instinctive British suspicion of the Continent. It pointed up real difficulties – of sovereignty, of democratic accountability, of economic divergence – in the way of ‘ever-closer union’ of the Community. There was a case for proceeding one step at a time, just as there was – and still is – a case for preferring a community of independent nations to a superstate. But by continually saying ‘no’ Britain only lost influence on a process from which it was in the end unable to stand aside, thus repeating the dismal game of catch-up which it had been playing at every stage of Europe’s development since 1950. Europe was the greatest challenge facing Mrs Thatcher’s premiership. It was also the greatest failure of her premiership. And it was a failure directly attributable to her own confrontational, xenophobic and narrow-minded personality.

24 Tomorrow the World

The export of Thatcherism

BY the mid-1980s Thatcherism had become an international phenomenon. Partly just because she was a woman, which meant that in all the photographs of international gatherings she stood out, in blue or red or green, from the grey-suited men around her (and was always placed chivalrously in the middle); partly on account of the strident clarity of her personality, her tireless travelling and her evangelical compulsion to trumpet her beliefs wherever she went; partly as a result of Britain’s unlikely victory in the Falklands war; partly in recognition of her close relationship with Ronald Reagan and her intermediary role between the Americans and Mikhail Gorbachev – for all these reasons Margaret Thatcher had become by about 1985 one of the best-known leaders on the planet, a superstar on the world stage, an object of curiosity and admiration wherever she went and far more popular around the world than she ever was at home.

Above all she was the most articulate and charismatic champion of a wave of economic liberalisation which was sweeping the world, turning back the dominant collectivism of the past half-century. She did not, of course, originate it. The anti-socialist and anti-corporatist counter-revolution was a global phenomenon observable literally from China to Peru. It originated, if anywhere, in Chicago, where both Friedrich Hayek and Milton Friedman had been at different times professors. The turning of the intellectual tide was reflected before Mrs Thatcher even became Tory leader by both of them being awarded the Nobel prize for economics – Hayek in 1974, Friedman in 1976. It was in Chile that their heretical ideas were first determinedly put into practice when General Augusto Pinochet, having overthrown (with American help) the democratically elected Marxist government of Salvador Allende in 1973, brought in the so-called ‘Chicago boys’ to instigate an extreme experiment in free-market reform enforced by the methods of a police state. The politics were detestable, but the economics set a model for the rest of South America and beyond.

In the early days of her leadership Mrs Thatcher knew that she was riding, or hoped to ride, a global wave. ‘Across the Western world the tide is turning’, she declared in March 1979, just before the General Election which brought her in to power, ‘and soon the same thing will happen here.’¹ The idea that she was the pathfinder only seized her some years later. ‘In 1981,’ she recalled, ‘a finance minister came to see me. “We’re all very interested in what you’re doing,” he said, “because if you succeed, others will follow.” That had never occurred to me.’² By 1986, however, she had begun to glory in the claim that Britain had led the world.

Incontestably the British example – particularly privatisation – played a part. But equally obviously the counter-revolution had its own momentum, in both East and West, as one social democratic country after another ran into the same sort of problems that Britain had encountered in the 1970s and responded in more or less the same way. Over the next decade the same necessity imposed itself right across Europe. In the fifteen years from 1985 over $100 billion worth of state assets were sold off, including such flagship national companies as Renault, Volkswagen, Lufthansa, Elf and the Italian oil company ENI, adding up to ‘the greatest sale in the history of the world’.³

Above all the free-market contagion spread to the citadels of Communism itself – to China as early as 1981 (where the experiment of economic liberalisation remained under strict political control) and then to the Soviet Union in the form of Mikhail Gorbachev’s perestroika programme, whose inherent contradictions rapidly precipitated the collapse of the whole Communist system. Mrs Thatcher was entitled to celebrate the triumph of ideas which she had not only followed but proselytised with missionary fervour. But the very fact that the phenomenon has been virtually universal – so that, as Mrs Thatcher herself noted, not just conservative but even nominally socialist governments were equally forced to conform to the global Zeitgeist – is the proof that it had its own irresistible momentum, irrespective of her contribution, significant though that was.

The collapse of Communism and the ‘problem’ of Germany

Nevertheless the sudden and quite unexpected collapse of Communism in the autumn of 1989 was a triumphant vindication of all that Mrs Thatcher had stood for and striven to bring about since 1975. Whether you call it Thatcherism or some other name, the fall of the Berlin Wall, the liberation of the Soviet empire and the disintegration within two years of the Soviet Union itself represented the ultimate victory for her philosophy and her – and Ronald Reagan’s – military strategy. The overriding context of all her politics for forty years had been the Cold War; and now suddenly the West had won it.

In her memoirs she gave the principal credit to Reagan ‘whose policies of military and economic competition with the Soviet Union forced the Soviet leaders… to abandon their ambitions of hegemony and to embark on the process of reform which in the end brought the entire Communist system crashing down’. But since the actual collapse had occurred after Reagan’s time she felt obliged to extend the credit to his successor, George Bush, who ‘managed the dangerous and volatile transformation with great diplomatic skill’; and even, through gritted teeth, to some of the other European allies, ‘who resisted both Soviet pressure and Soviet blandishments to maintain a strong western defence – in particular Helmut Schmidt, Helmut Kohl, Francois Mitterrand and… but modesty forbids’.⁴ This was false modesty, however. As the President’s staunchest ally she had no doubt who deserved most credit, after Reagan himself, for the success of their joint strategy. In retirement she had no doubt that this was her greatest achievement.

Nevertheless the implosion of Communism did not bring her unmixed joy. On the contrary, her last year in office was one of her most difficult on the international front. For the immediate consequence of the opening of the Berlin Wall was an irresistible momentum to reunite the two parts of Germany, a prospect which exacerbated her fear and loathing of the former enemy. At the same time she was having to come to terms with a new administration in Washington in which she had much less confidence than she had in Ronald Reagan. At her moment of ideological victory, therefore, she found herself more isolated on the world stage than ever