Thursday 3 November 2016

The Milk Snatcher

With the US Presidential election unfolding in a way which has the rest of the world mostly recoiling somewhere between disbelief, horror, and pity, I thought it would be a choice time to write a political column.  I don’t believe I have anything helpful to say about either Trump or Clinton, so I’ll focus my column on another political leader that inspired an almost comparable combination of adulation and loathing – Margaret Thatcher.  And just to be clear here, I don’t think that the subject of this column has any practical parallels with the present American situation other than the emotions and divisions that were aroused, although the Thatcherism ‘debate’ mostly arose after her election rather than before it.  On the other hand, a close look at the political situation of Great Britain in the 70’s and 80’s might form a useful point of contrast – maybe dramatically so – with the issues driving the political dialog in America today. So grab a cup of coffee and a cookie there's a lot to cover!

I will try to avoid applying a political slant to my piece, although it is a fair argument to suggest that any piece on a political subject can hardly avoid being slanted one way or the other.  And there are always those who will always insist that a piece that is not slanted their way is by definition slanted the other way.  Nonetheless I’ll try to straddle the middle ground as fairly as possible.  I will say, though, that I lived in England throughout most of the years in question, leaving for Canada in 1988.  During that time I never once voted for Margaret Thatcher, and if I had my time again I doubt that would change much – not that I had any great affection for the alternatives.  But I mention this to give context to the fact that even though I was not politically aligned with her, I always had the greatest admiration for her as a politician, and still do to this day.

Margaret Thatcher was a politician driven by deeply held and carefully considered social principles, something we normally associate with radicals from the left driven by ideals, rather than conservatives from the right driven by self-interest.  At a time and place in which Socialist and Tory governments alike had tended to address the problems of the day by employing varying degrees of pragmatism and consensus, Margaret Thatcher stood out as someone who wanted to tear down the walls and rebuild the edifice.  But what really made Margaret Thatcher so unique, not only from the perspective of analyzing what brought her to power, but also (from hindsight) of how she wielded that power, was the fact that she made no effort to hide her agenda.  She said exactly what she wanted to do, and then set about doing exactly that.  And it is a surprise to many with only a passing view of the legend of the Iron Lady, that she accomplished most of what she did by bulldozing her agenda past a largely unconvinced – even obstructive – cabinet drawn mostly from the ranks of senior old-guard Tories.  Thatcher did not see the Prime Ministership as an end in itself, a high office whose retention became job #1.  For her it was more a necessary requirement to achieving her political goals.  She was not a person whose political positions were carefully selected to best serve her personal ambitions.  Unlike those who followed her.

By the late 1960’s, the core of British industry operated as government-owned monopolies.  Mining, Steel, Shipbuilding, Gas, Electricity, Telecommunications, Transportation, Aviation, and, from 1975, most of the automobile industry, were all nationalized.  These industries, together with the National Health Service, the Civil Service and the Education system, together formed the labour-intensive core of the British economy.  By 1968 a combination of stagnating productivity and increasing competition from overseas meant that inflation had started to take hold, and this resulted in accelerating wage demands.  These in turn drove further price increases for the goods and services being produced, a runaway situation known as a wage/price spiral.  With the greater part of the economy being nationalized, it meant that the government didn’t really have separate levers with which it could seek to control prices and wages.  The two were inextricably linked.  However, at that time, most governments took the view that inflation could be countered by a combination of price and wage controls.  But with the high rate of inflation, the required wage controls proved to be incendiary, and the trade unions were strongly opposed.

The trade union movement was highly organized on a national level and was extremely powerful.  Most of the unions were deeply influenced by far left-leaning – even communist – ideologies, and were well aware that they had the power to bring down the government.  And indeed, in 1975 a strike by the Coal Miners’ union did bring down Ted Heath’s Conservative government and ushered in a more union-friendly Labour administration.  But all this accomplished was to put off today’s problems until tomorrow.  While Labour would quell the unrest by meeting the unions’ wage demands, they had no mechanism available to prevent the resultant price rises which would feed further inflation and thereby erode the wage gains.  With hindsight it was clear that something had to give, but at the time few saw it in such stark terms.  When, in 1979, the unions rose again to exert their power, it was their own Labour government that they brought to its knees – and this time there was nobody to the political left of the government to step in and bail them out.  What they got instead was Margaret Thatcher.

The other major political issue of the day concerned Defense policy, and in particular the Cold War.  At that time, the Western policy towards the Soviet Union was known as “Détente”.  In broad-brush terms, this involved ongoing negotiations between East and West to scale back their respective nuclear threat capabilities.  This ‘thawing’ of relationships was widely seen as being progressive and mutually beneficial.  Even so, Margaret Thatcher was very concerned that while the West, with its more transparent political structures, would by and large follow through with its commitments, whereas the opaque and intransigent Soviets would lie and obfuscate to their great advantage.  Furthermore, even if both parties did in fact scale back their nuclear arsenals to any substantial degree, this would only serve to expose the West to the Soviets’ considerable superiority in terms of conventional warfare.  By contrast, within the Labour Party, not only was there enthusiastic support for détente-driven nuclear arms reduction, there was even a core movement in favour of unilateral nuclear disarmament, something which Thatcher felt was intolerably reckless.

Mrs Thatcher assumed leadership of the Conservative Party in 1975, following Ted Heath’s humiliation at the hands of the Miners’ union.  Between then and her election victory in 1979, she developed the doctrines which were loosely to become known as Thatcherism.  These were broadly as follows.

First, the notion that the only levers available to a government to control inflation were prices and incomes policies was clearly wrong and wasn’t working.  In its place would be a monetarist policy where inflation would be brought under control by strategically managing the money supply.  This would require ruthless cuts in the amount of money fed by the government to any inefficient nationalized industries that proved unable to manage their own internal cost structures.  In other words, most of them.

Secondly, the entire portfolio of nationalized industry would be sold to the private sector, a process which, under Thatcher, would come to be known as Privatization.  Those that were still in good enough shape would generate considerable interest in the marketplace.  However, those that did not could no longer expect to be propped up by the government.  Privatization had the additional advantage that the cashflow received from these sales could be used the plug the holes in the money supply strategy that was needed to bring down inflation.  Another core aspect of the privatization process was that Thatcher felt strongly that these national assets should be sold not to institutional investors, but to the ordinary citizen.  [And indeed, mechanisms were put in place to ensure that private small investors could jump to the front of the queue when it came to the disposal of these assets.  They would do so in droves.]  Related to this politically was a policy to allow Council House tenants (a widespread, indeed dominant, form of social housing) to buy their homes at favourable pricing from their local Councils.  [Again, they would do so in droves.]

Third, the unions had to be decisively beaten and their power severely curtailed, although this would only come to the fore during her second term beginning in 1983.  There would be three major thrusts to her strategy to accomplish this.  As a first step, she would introduce legislation to replace the status quo which was that union members who broke the law would be prosecuted only as individuals, which had the effect of insulating union leaders from the consequences of their policies and actions.  Instead, unions whose members broke certain laws could have their funds sequestered by the government.  These funds were in many cases quite lucrative, and this would prove to be a crucial policy tool.  [Interestingly, the Heath government of 1970-74 had provisionally introduced such a policy, but fell when the striking Miners called their bluff and the government backed down.]  Next, she would introduce legislation to require any vote on strike action to be carried out by secret ballot.  This was massively resisted by the union leadership, who knew only too well that coercion and intimidation were powerful tools which only worked when voters could not avoid disclosing which way they voted.  Finally, she would introduce legislation to outlaw secondary picketing.  This was a practice where a union could arrange for members of one employer’s workforce to picket outside a different business’s premises.  Furthermore, the unions were not averse to employing outsiders - and even thugs - to add to the numbers of picketing workers, and it often became impossible to tell who was and was not a legitimate striking worker.  Violence was often employed.

Finally, a strong stance would be taken towards the Soviet Union.  She felt firmly that the only way to ensure peace was to ensure that the Soviets genuinely respected the capabilities - both offensive and defensive - of the West.  On the other hand, the best way to actively engage with and defeat the Soviets was economically.  Thatcher was convinced that the socialist system was fundamentally weak, and would be ultimately unable to sustain the economic growth that capitalist policies would drive in the West.  In this she found a resolute ally in Ronald Reagan, who held office throughout most of her premiership.

Margaret Thatcher was elected Prime Minister in 1979.  She came to power largely because the country had lost faith in the ability of the previous Labour administration to manage serious conflicts with its own labour movement, and were willing to try something different.  Thatcher never hid what she planned to do, and was quite determined that – come what may – she would deliver on her manifesto.  But I don’t think the country as a whole fully appreciated what that would amount to.  At least not in 1979.  In fact, until the Falkland War appeared unannounced out of left field, most observers believe that she would not have survived her first election, such was the impact of the bitter medicine that her new monetarist economic policy prescribed straight off the bat.  And if the opposition Labour Party had not been so thoroughly derailed by the radicals on their own left wing, most notably in the area of Defence, they would have been well placed to take immediate advantage.  [Indeed, the political self-immolation of the Labour Party during her entire premiership was arguably the most significant factor in her ability to hold onto power, and I don’t do justice to that in this already lengthy column.]  But Thatcher was indeed re-elected, and the full spectrum of Thatcherism was to follow.

Thatcher did, by and large, accomplish everything she set out to do.  She privatized the profitable nationalized industries and starved the irrecoverable ones to death by turning off the spigot that fed them with regular cash handouts.  She conquered the problem of endemic inflation, and oversaw a significant economic recovery.  She emphatically defeated the trade unions, and even outlasted the Soviet Union.  In many ways her legacy is a magnificent one – Thatcherism totally reshaped the Great Britain that she left behind.  But in many other ways it is not.  Her economic policies put many millions of people out of work, with no prospects whatsoever of finding another job.  Whole communities were effectively devastated, and there was little evidence of her much-vaunted economic recovery in large parts of the country – most notably those that suffered most from the loss of traditional industries.  To a significant degree, the economic recovery was enjoyed mostly by the haves, and the have-nots didn’t get much of a look-in – a situation that some may see reflected in many aspects of today’s economy.

It is a fair question to ask whether and how such a cost ever can be justified, one to which there are widely diverging, but equally valid, viewpoints.  Thatcherism undoubtedly caused terrible misery for a huge number of citizens who rightly looked to their government to protect them from such things.  Many, many people still hate Thatcher with such a passion that when she died in 2013 they celebrated the occasion with unseemly joy.  Ding-dong the Wicked Witch is dead. She was that divisive.  But the virulently anti-Thatcher elements have a difficult argument to make when they imply that, given the depths to which the Country had sunk in 1979, and the increasingly radical policy positions of the Labour Party in response, they would have ended up any better off under a decade of Labour Administration.

I don’t have enough space here to provide a thorough treatment of my chosen subject, and there are many significant elements of the Thatcher story that I don’t even begin to touch upon.  I’m already at 2,621 words!  A half-decent treatment would result in a multi-volume book that I could stand on to clean out my gutters.  Whatever your (or my) personal stance towards Margaret Thatcher’s politics, she was an icon for a number of things that I wish were more in evidence in today’s political environment.  First, she actually stood for something, and sought political leadership so that she could make those things happen, rather than cynically cherry-picking hot-button issues as vehicles to deliver her to high office.  Second, she placed a high premium on communicating those things to the public.  She genuinely felt that if only the public fully understood what she wanted to do, and why, they would be fully behind her.  She hated the thought of misleading the electorate, or of failing to get her message across.  Third, she had the incredible strength of character, intellect, and personal toughness required to drive those policies to an effective implementation.  It really doesn’t matter if a political leader has a great vision if they don’t have the leadership ability to actually deliver it in government.  Although she exhibited some significant holes with regard to all three of those attributes, it is hard these days to find a political leader who displays unambiguous strengths in more than one of them.  Frankly, most of them seem to have none of those strengths at all.

Finally, I’ll leave you with this thought.  Don’t you think it is quite remarkable that I can write all of the above without having to frame it in the context of her gender?