Does Margaret Thatcher Need to be Demonized?

Joseph W.H. Lough

Social Scientists are always at risk either of so emphasizing individual agency that they lose the right to develop, much less deploy, explanatory models, or of so emphasizing supra-individual structures, processes, and institutions that agency and therefore historical possibility are completely removed. As I reflect on Margaret Thatcher’s legacy, I find myself caught between these two extremes: on the one hand reflecting on the very real damage that she, individually, unleashed on millions of British subjects and hundreds of millions of non-British subjects throughout the world, while on the other hand recognizing that Margaret Thatcher would have been powerless were it not for conditions that, after all, were neither of her making nor of her choosing.

Die Menschen machen ihre eigene Geschichte, aber sie machen sie nicht aus freien Stücken, nicht unter selbstgewählten, sondern unter unmittelbar vorgefundenen, gegebenen und überlieferten Umständen. Die Tradition aller toten Geschlechter lastet wie ein Alp auf dem Gehirne der Lebenden. [Men make their own history, but they do not make it just as they please; they do not make it under circumstances chosen by themselves, but under circumstances directly encountered, given and transmitted from the past. The tradition of all the dead generations weighs like a nightmare on the brain of the living.] (K Marx, Der achtzehnte Brumaire des Louis Napoleon. sited 9 April 2013)

Whether it was possible for Margaret Thatcher to critically reflect on the conditions of her own possibility, as this last quote suggests she might have, is doubtful. Neither she nor her partner in crime, Ronald Reagan, possessed the wherewithal to understand their moment in history or the circumstances that brought them up to that moment. In those subjects that would most have mattered – an education in the classics, neoclassical economic theory, history, anthropology, science – Ms. Thatcher’s education was tragically wanting, to say the least. Thus, in this respect as in so many others, Ms. Thatcher was a victim of the very class structure that she helped to perpetuate and indeed expand.

Even if she had been so inclined, which she was not, it would have been all but impossible for her to pursue a career in anything outside of business, law, medicine, or the sciences, career paths notoriously poor in preparing students to reflect critically on their own historical, social, political, or economic conditions. Her approach to the world thus displayed all of the skill and insight of the bench scientist that she was and would forever remain. (This is not a slight at bench scientists, but only at bench scientists who, absent any other training, attempt to shape world history. No one, I presume, would want a social scientist, absent any additional training, performing heart surgery on their parents.)

The same class structure that prevented Ms. Thatcher from acquiring the training she would have needed to adequately address Great Britain’s economic ills delivered to her Conservatives enough poorly educated voters to catapult both her and her Party into power. Put differently, had Ms. Thatcher and her supporters enjoyed the education and economic and social security enjoyed by England’s wealthiest citizens it is inconceivable that either she or they would have viewed England’s economic decline through the magical lens of personal moral weakness and corruption. They would instead have understood that only an even greater investment in the social and economic franchise could lift England out of its economic doldrums. However, given their training and inclination, Ms. Thatcher and her supporters were bound to view their plight through a fog of quasi-theological, pseudo-scientific, moral compensation – just punishment for the sins of ignorance and poverty.

Perhaps it need not be said, but human agents, individuals, are not the same as the structures, processes, and institutions that lend order to our world. This observation is not trivial. For what this means is that, as much as we might wish that it were otherwise, we always inevitably maintain or transform our world through our human agency, through individuals. Therefore, while it is certainly true that we ourselves are structured and shaped by the worlds we live in, it is also true that we ourselves are the agents and individuals who structure these worlds and not otherwise. Every attempt to work around human agents – whether through Soviet or American Fordist bureaucracy or through their more flexible post-Fordist successors – has ended in disaster. We have no alternative therefore but to treat Ms. Thatcher and her followers as agents and individuals; indeed, we would not want to do otherwise.

But what might treating Ms. Thatcher as a responsible agent entail? We should state at the outset what it would not entail. It would not entail ignoring the actual historical and social conditions that shaped Ms. Thatcher’s response to Great Britain’s and the world’s economic and political ills. Nor would it entail proposing possible decision trees that simply were not within Ms. Thatcher’s reach.

Holding Ms. Thatcher responsible means, first, approaching her legacy as though she could respond to rational objections to her actual decisions and their rationale; second, it means that we are free to propose alternative decisions than those Ms. Thatcher made; and, three, it means that we are free to reflect critically on the conditions to which Ms. Thatcher responded as well as those conditions that structured her response with full recognition that we, too, must take cognizance that we, caeteris paribus, share her world and therefore, caeteris paribus, are structured by these same conditions. It is not therefore as though we were trying Ms. Thatcher for a crime to which we ourselves were or are immune; as though we somehow have escaped the conditions by which she also is shaped. Holding Ms. Thatcher responsible means that, albeit post mortem, we are inviting her and her followers to reflect alongside and with us, believing that they are capable of and interested in a more comprehensive and satisfying account of her legacy than the one she herself offers.

But, in order to offer such an account we need to begin at such a point socially and historically that sense can be made of the events that in fact unfolded prior to, during, and following World War II; events that created the world that both she and we are (or in any case were) members.

Ms. Thatcher was born in 1925, which is to say, she was born at a point when the balance of power had already shifted considerably from Great Britain to Germany, on the one hand, and to the United States on the other; and, it had shifted to Germany because and only insofar as it had shifted to the United States. Yes, Great Britain, with considerable assistance from the United States, had defeated Germany, but at such a high cost, both in personnel and in wealth, that her economy and society were left devastated.

The following chart, showing Debt to GDP in the UK since 1830 perfectly illustrates the economic toll exacted by World War I:

This toll was only partially mitigated, in 1923, by a plan developed by Charles G. Dawes. The plan was to take JP Morgan money and funnel it through Germany to help the Germans pay off their war debt to France and England, who in turn would take the German payments and use them to pay back the war debt they owed to – you guessed it – JP Morgan. There was only one problem, as JM Keynes pointed out in his short 1919 tract The Economic Consequences of the Peace. By bleeding one of Great Britain’s leading trading partners dry, the British virtually guaranteed suppressed consumer demand. What this meant was that Great Britain’s economic fortunes only began to improve once Germany’s fortunes did likewise.

Ms. Thatcher grew up in a Great Britain whose pretensions to empire were underwritten by JP Morgan and whose macroeconomic obstinacy played a not insignificant role in driving Germany, one of England’s leading trading partner’s, into the arms post-democratic politics.

Nothing the Labor Party did or failed to do played any role whatsoever in the shift of the world’s economic center of gravity from London to New York. Rather was this shift provoked – guaranteed – by London’s headstrong pursuit of empire in the nineteenth century; a game which, by any macroeconomic measures, was terribly costly and inefficient insofar as it sequestered Britain’s wealth among the same 1% investor class that had the most to gain, financially, from empire, and the most to lose by extending Britain’s social, economic, and cultural franchise to Britain’s growing laboring classes.

What this meant in practice for Ms. Thatcher’s parents and grandparents was not only that they were denied the privileges enjoyed by Great Britain’s 1%, but that they were also compelled to pay, both in taxes and in personal loss, for an imperial dream from which they individually took home absolutely nothing.

Meanwhile, Great Britain’s trading partners to the west, their former colony America, played their cards more cautiously. Rather than expand their overseas holdings, they simply expanded their territorial sovereignty both westward and southward, extending what the envious Germans would later term Lebensraum. Empire, American investors all seemed to agree, was unnecessarily costly. It was much more lucrative and cost-efficient to finance the empires of others, most especially the British.

All of this was, needless to say, lost on the daughter of the grocery store owner in Grantham who grew up believing that all Great Britain needed to return to its former stature was a strong leader and sufficient moral fortitude.

Two nearly opposing explanations for the Great Depression and World War Two emerged from the ashes. According to the first explanation, the explanation embraced by nearly all economists and social scientists, economic malfeasance and callous disregard for the welfare of the laboring classes had led these classes to embrace solutions offered by ideologues who promised to improve their welfare not through economic or social policies, but through cultural, moral, and racial final solutions. Those social scientists and economists who embraced this explanation for the Great Depression and World War Two recommended a more equitable distribution of the social and economic franchise among the industrialized world’s laboring classes.

According to the second, alternative, explanation, embraced by individuals on the fringes of the policy world, fascism and communism were simply two sides of the same totalitarian coin. Only when economic actors were permitted to act in complete freedom, without the intervention of state agents, under the rule of law; only then could totalitarianism of the sort experienced in Spain, Italy, Germany, and Russia be avoided.

This second, alternative, explanation was roundly rejected by historians, political scientists, sociologists, and economists from one end of the political spectrum to the other. It was simplistic. It ignored the historical record. It imposed an ideologically-tinged template onto history.

And, yet, to individuals who had not benefited from the privileged education enjoyed only by Great Britain’s elites, this second explanation had the advantage of fitting into a moral universe with which they were only all too familiar. Told all of their lives by their class betters that only hard work and moral rectitude would win for them the prize, they were inclined to believe a story that said that they and they alone – not the government, not the community, not the parish, not their neighbors – only they themselves were responsible for their success. Aggregate demand, aggregate supply, all macroeconomic gibberish be damned!

The young Margaret Thatcher sucked up every word of Friedrich von Hayek’s Road to Serfdom. Though it rang hollow and false to every Cambridge and Oxford economist, it rang true to the Oxford student of Chemistry, the daughter of grocery store owners. And, in matters of economics, who are you going to believe? An undergraduate with a chemistry degree or John Maynard Keynes?

Ironically – or so it must have seemed to the young ideologue politician – as Great Britain shed its empire and as it embraced a broader social and economic franchise, its economic fortunes counterintuitively improved. And, yet, Great Britain was no longer in control of its own economic fortunes. When the United States, Great Britain’s successor, elected to finance the rebirth of the industrial world, it also created a global network of markets that would require security and protection, much as Great Britain’s empire had required security and protection, thus raising the price tag back in Washington. Moreover, by rebuilding Germany and Japan, the United States had not only created a ready market for its goods. It had also created worthy competitors; competitors who beginning in the late 1960s and early 1970s would begin to produce and market their own goods at competitive prices around the globe.

Here, however, Germany and Japan enjoyed an advantage not permitted in the United States. From the United States Germany and Japan had learned that by lowering costs of production across the board they could give their private producers a competitive advantage globally. Thus, country after country throughout the industrialized world lowered their private production costs by instituting universal public health care, health care that enjoyed the added advantage of producing a work force that was far more productive. Moreover, given the high cost of oil and transportation, America’s competitors set to work creating transportation networks for both workers and for goods that made getting to and from work far more efficient than America’s clumsy and forever clogged single vehicle highways.

As America’s growing debt from private-public partnerships in health, transportation, and education began to mushroom, and as its war-debt from imperial conflicts around the globe began to bloom, it began to dawn on a handful of economists in the wings of mainstream economics that the real drag on aggregate productivity was not private healthcare, private transportation, private education, and military intervention across the face of the globe; the real drag was government itself. Get rid of government – Locke and Hobbes be damned! – and a thousand balloons will be set aloft.

Never mind that this fit no known or conceivable economic model. Never mind that this fantasy recommended policies that would actually exacerbate and not rectify the overall economic stagnation. And never mind that it was the economies who had broadened the social and economic franchise that in the 1970s were enjoying the greatest prosperity and growth. Could the United States and Great Britain throw their laboring classes completely under the bus, could they completely trash the social and economic franchise, the comparative advantage they might create – relative to nations that had adopted a rigorous social and economic franchise – might just prove enough to tip the balance.

But, for Ms. Thatcher, this was not enough. As she never tired of reminding her admirers, whose minds of numbers and complex economic models left much to be desired, this was not a battle over economic policy. It was a moral battle.

And, indeed, it was. How could it have been otherwise for this daughter of a grocery store owner who had graduated in chemistry? For were it a battle over numbers and economic models; did she really have to master macroeconomics, she could only have failed, and failed quite miserably. Only by shifting the debate to the familiar terrain of good and evil, hard working and lazy, thrifty and profligate, only then could Ms. Thatcher win the day. And win she did, albeit at the expense of the large bulk of her countrymen and much of the world, vid., South Africa, Central America, South America.

So, what is Ms. Thatcher’s legacy? In nearly all respects, it would appear that her legacy is fading. Economists by and large are returning to their neo-Keynesian, neoclassical roots. The United States, though much more violently than Great Britain, is shedding its empire, ceding it to the next hegemon, while those nations who have embraced Ms. Thatcher’s ideology have assumed second or third tier status among the comity of nations.

Ms. Thatcher will always enjoy admirers, particularly among society’s outcasts and tycoons, those on the fringes. But for this Ms. Thatcher deserves less to be demonized than mourned. Of her it might be said that she was never crueler than she was to those who brought her into the world, whom she believed she was liberating, but whom in fact she was condemning to the true road to serfdom.

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