You know the Earl of Grantham and his daughters, courtesy of Downton Abbey. But did you know the Mayor of Grantham’s daughter?
Simply called Thatcher, the biography I picked up (there are many) goes over the political life of Margaret Thatcher (1925-2013), Britain’s prime minister from 1979-1990. Her economics are akin to those of Friedman and Hayek. This is the backdrop against which I’ve heard her name arise again and again. But who was this person, this grocer’s daughter?
The United Kingdom was spiraling into Socialism. Thatcher, a Conservative, approved of the welfare state (the safety net) but also wanted to rebuild the free market (the ladder). The nation’s economic policy was of Keynes: regular use of fiscal policy (i.e. government budgets) to support full employment, thus maximizing the nation’s productivity. However, the admirable theory (spend more when it’s bad, make up the difference when it’s good) had become their enemy over the long run (spending at all times) leading to value-eroding inflation and market-stifling wage and price controls. Time was running out.
In the author’s words: “The problem of Britain’s seemingly perpetual and miserable economic decline preoccupied all post-war governments to one degree or another. The analysis was not lacking, but the political will was.”
Thatcher’s philosophy, sometimes called Monetarist and often linked to Friedman and Hayek or even Reaganomics, called for the limited use of monetary policy to provide a framework within which private activity would fuel the economic engine.
But that is the theory. Margaret Thatcher was a realist, a practitioner, with an iron political will. And that is what Britain needed.
While I find the underlying economics fascinating, my point in this post is to wonder how she succeeded at such a difficult task. She herself would agree with this focus. She was no high-brow economic philosopher, but rather the price-aware shopkeeper who had taken on an Oxford education and communicated well in the political sphere. Her grocery-store economics knew that one couldn’t indefinitely spend what one did not have.
How did this come to pass? As a child, she was never far from the gristmill of local political activity. Margaret was taught to always be in control of herself, as befit a child in constant contact with her father’s customers.
Her election as Conservative Party Leader may have been precipitated by accidents (as the author Kenneth Harris notes), but her long political path was anything but passive. She seemed master of the strategy, “if you can’t succeed, attack the flank.” I see three examples of flanking early in her career:
- She read for Oxford as a chemistry student, a much less competitive entrance than the perennially popular law. She then just “double-majored” once in (“also read for,” I believe, is the term our English cousins use) and later sat for the Bar.
- As an MP’s (Member of Parliament’s) salary was inadequate for mailings, secretarial, and self-sustenance, she got a job at a chemical company. Political action was a side hobby for a few years before it became anything more.
- Her first seat (Parliamentary district) was a no-win situation, a long-time Labour stronghold. But she honed her craft and eroded the opponent’s margins successively in two elections. Later, as opportunity arose, she took on a Conservative-leaning seat that also afforded proximity to London and won there.
Once she was an MP, progress accelerated. She luckily picked a good spot on the “submit a bill” roundtable and hosted a key piece of legislation for her party. She presented it with her 27-minute maiden speech, delivered without notes, to much critical acclaim. Later on, she developed a reputation for a strong command of the facts and a resilience in the face of opposition. Margaret was a formidable enemy and a strong ally.
It was not all smooth sailing. One of her early headliners called her “The Most Unpopular Woman in Britain” after she, Minister of Education at the time, removed the free provision of milk for children at school. Over time Britain would come to know this woman who thought differently from the consensus post-war governments. In her own words:
[E]lections are not about promises of what the Government can do for people; they are about promises to run the country in a way which enables people to do more for themselves, to protect those who are unfortunate, and to defend what we believe in.
What happened when she had to interact with those who had different thoughts, different beliefs? She spoke of her relationship with Soviet leader Mikhail Gorbachev, highlighting the common ground.
[W]e have a viewpoint founded on fundamental belief, founded on being reliable allies, founded on being loyal not only to our allies but also to our beliefs; and understanding that those beliefs have something to give, some contribution to make to the development of the wider world.
Some foreign policy was easier than others. She was a close ally of US President Ronald Reagan, though from time to time the two found themselves in opposition with each other.
It did not need any formal alliance for America and us to be fighting on the same side in two world wars. It needed the fundamental beliefs which our two countries shared…. The Americans know that what we say to them will be based on reason and good sense. So we are trusted there.
Her results, based on the author’s synopsis, are as follows:
- Inflation, the 1970s main economic problem, at 25% in 1975, reduced to 4% annually
- Economic growth averaging over 3%, ahead of most global peers
- A 1988 budget with a surplus
- Highest European industrial productivity
- Direct taxation reduced from 33-83% to 25-40% (low-high according to income level)
But perhaps her largest change was made upon the people. When she began, powerful trade unions made Parliament quiver. When her Government ended, there were, for the first time, more stockholders than union workers. It is not a final solution nor a complete solution, but the merging of the proletariat and the bourgeois was underway.
If a grocer’s daughter could become Prime Minister, could not owners, management, and labor someday coalesce? At any rate, it was a far more viable and equitable solution than the intermediate command-and-control form Marx’s adherents were attempting in Eastern Europe.
The author asked the Prime Minister, the night before the 1983 general election, her vision for Britain. “My vision of society? The Responsible Society.” In 1986 she told the Conservative Women’s conference that
A responsible society is one in which people do not leave it to the person next door to do the job. It is one which people help each other, where parents put their children first, friends look out for the neighbours, families for their elderly members, that is the starting point for care and support…. Caring isn’t measured by what you say; it’s expressed by what you do.
By her actions, Margaret proved that she cared. She solved the problems she campaigned to solve and gave Britain a respite from its post-war descent. But she also pulled back and gave individuals, families, and businesses the honor of doing the same.
She will always be known as the Iron Lady, a name first given her without intending honor. She ran “conviction politics” based off of her fundamental beliefs and had sufficient strength to see it through. But she was no invincible powerhouse, often needing to choose her timing and approach carefully. It is not of no account that she is held peerless among Britain’s Prime Ministers since Churchill.
What problem today requires that you have an iron will? Where might flanking the problem be helpful?