Thatcher(ism)

The death of Margaret Thatcher this week has been the catalyst for a wide range of emotional responses, from the unseemly rejoicing, through the thoughtful critic all the way to the hagiographers. There is no doubt that Thatcher left a lasting imprint upon Britain, and arguably upon the world, with her devout commitment to laissez-faire economics and strong (some say unbending) leadership for Britain out of some dark days.
From an Australian perspective, her contribution can be evaluated from a distance, both real and figurative. The emergence of Thatcher came two years after Australia had already embarked upon a swing to the right politically. Under Malcolm Fraser’s leadership, the commitment to right-wing ideology was the strongest it had been in Australia until that time. But we need to remember the context in which it took place.
The 1970s brought the first of the world oil shocks, pushing up prices, and causing a rethink about the direction of the economic reliance upon oil. The first real period of post-war stagflation caught almost all incumbent governments on the hop, as economic policies had to adapt to a hitherto unexperienced phenomenon. Keynesian economics, which, along with the development of global economic agreements, had largely served the west well for four decades, was ill-equipped to respond. Rising unemployment required economic (budgetary) stimulus, which drove inflation higher, and budgets deeper into deficit (a budget surplus was almost unknown at this time!) The austere policies of the Fraser government and the divisive capital vs labour approach was ultimately rejected by the Australian people in favour of the more cooperative approach offered by Bob Hawke’s Labour Party. While Thatcher continued to lead Britain down this pathway, Australia was already moving past it, albeit adopting a similar approach to deregulation which Thatcher and Reagan championed. This unrequited trust in the free market arguably ploughed the field which enabled the failure of the Bank of England in the first instance, and the GFC of 2007 in the second.
Thatcher’s contribution came alongside the rise of monetarism as an approach to economics. The shift in Britain’s fortunes can only be partly attributed to its wisdom and insights. The demonization of Keynesian economics was ultimately costly – even to this day in Britain and the US, where interest rates became the only accepted response to the GFC. Still mired in recession with high unemployment, monetarist economics has an empty kit bag.
It was also in the late 1970s and early 1980s – and something for which we have Thatcher to thank, at least in part - that the seismic shift towards economic growth as the sole arbiter of government success gained significant traction. Economics was not just the prime determinant of a government’s success, it was the sole determinant, even further bastardised in more recent days as the ability to deliver a budget surplus. Impacts on social, personal and environmental wellbeing, along with any notion of global justice and equity was sacrificed on the altar of capitalism. Without apology. It was that unwavering commitment to a path she believed in that made her the strong leader many celebrate, and which nurtured a world many others mourn.
Margaret Thatcher’s death is something I note, and nothing more. As a women of advanced years, death is not a tragedy. She lived with the benefit of resources that only a few enjoy. Her legacy to the world is not something I cherish. She was a product of her time, with her “success” being misattributed to factors which have been replicated for decades, and for which we all continue to pay the price.