While I can understand the argument that Thatcher had a negative impact on (certain) segments of the less-well off, I think history tells us that this was by no means her intention ( that is too cyncial IMO). There were two central pillars to her philosophy: (1) that the role of government in UK economics and society has become too great/pervasive and (2) individuals should be given greater freedom and responsibilities to make their own choices. An upshot of this (highlighted in the documentaries last night) was her belief that government resources should be used more to target the suffering of those less well-off. We can make our own conclusions about whether this was achieved or not individually!
But IMO the analysis of the Thatcher legacy requires a thorough understanding of what proceeded her and what followed her. It is the classic thesis, antithesis, synthesis framework. Thatchers successes resulted from how she dealt with the excesses that characterised the previous decade/s under the likes of Wilson, Heath, and Callaghan that saw among other things – weak economic performance, the failure of government attempts to manage aggregate demand, devasting collapses in industrial relations, high inflation, balance of payments crises, IMF bailouts, failed income policies and 47% wage demands etc. Her failures were largely due to the fact that she (often) took each (required?) solution too far eg, Keynesian economics were replaced by overly strict monetarist approaches, privatisation and liberalisation was extended too far and in some cases the dangers of externalities were ignored, supply side reforms were not accompanied by policies to retrain work forces sufficiently, the battle for inflation was won at the expense of high and sustained unemployment etc.
But since then, many important lessons have been learned (if not completely). Keynesian and monetarist economics work better in tandem than in isolation (albeit that the current policy mix is unbalanced and not working), the private and public sectors can work together (although again not 100% successfully), inflationary objectives need to be considered with other economic goals (new BoE mandate) etc. Sadly the lesson that has not be learned is that if governments believe that they have a role in managing aggregate demand, then Keynes’ argument was that you (attempt to) run budget surpluses in the good times in order to finance deficits in the bad times. This lesson was ignored by Tory and most catastrophically by the last Labour government, thereby reducing our ability to respond to the current crisis. On top of that recent governments have failed to remember the importance of the balanced economies placing an over-reliance on financial services and the public sector. But that does not mean that we do not manufacture anything anymore.
So the Thatcher legacy? Thatcherism itself was largely a myth IMO. The follies of the past were replaced largely by a new extremes but with some successes as well. In time, a new synthesis was formed which is reflected in the current closeness of the main UK political parties. Of course, the challenges have moved on, as they always do, and the current consensus/thesis does not have the answers to the current problems. Let’s hope that this time, the reaction or antithesis is less extreme, but I doubt it personally as the political debate highlights that the real reasons for our current crises are not properly recognised or understood!
