Thatcher’s Enemies

In Britain they are mourning the death of Margaret Thatcher. They are also celebrating. Celebrating? Yes, celebrating.

“Ding Dong the Witch is Gone,” reads one sign. “I Still Hate Thatcher,” reads another. Then there is “Rejoice, Thatcher is Dead” and “The Bitch is Dead.” Try this link if you’re up to viewing a lot of sickening photos and a lot of disrespect for Britain’s greatest leader.

Granted, any crazy person can create a sign. But this is a good time to remember the conflict in Margaret Thatcher’s Britain was not just about slogans on signs. She was actively engaged in a war of ideas.

Most of us have a good idea of Thatcher’s political philosophy. Could you explain the political philosophy of her opponents? I think the basic beliefs of the left in Britain are not all that different from the beliefs of the left in this country. Yet you almost never hear it spelled out in clear detail. So let me give it a try.

thatcher2

They believe in two things.

First, government should have virtually unrestricted authority to intervene in the economic sphere. It should be able to set prices, control output, dictate quality standards, nationalize companies, create cartels and restrict entry into markets for any reason whatever. In particular, they believe that government should be able to intervene in the market to help Peter at the expense of Paul, regardless of who Peter is and regardless of who Paul is. By that last point I mean that Peter can be rich and Paul poor, or vice versa. Peter can be young and Paul old, or vice versa. Peter can be happy and Paul can be sad, or vice versa. Peter and Paul can be anybody.

Second, people should be able (and even encouraged) to form special interest groups to pressure government for the express purpose of taking from Peter to benefit Paul.

To understand the contrary point of view, consider the case of New Ice House vs. Liebmann (1932). In that case Oklahoma City granted a monopoly to one firm and refused to allow any other firm to deliver ice to consumers. The Supreme Court, however, was unable to find any legitimate purpose behind the regulation. There was no showing that the ice house monopoly in any way was promoting the “general welfare.” Therefore, the Court struck down the regulation on the grounds that it unconstitutionally interfered with the natural liberty the Constitution is presumed to protect.

Now if you listened to the rhetoric of the left, you would think that this decision would be lauded at every Democratic national convention. Here is a greedy (for-profit) ice house that undoubtedly convinced friendly politicians to give it exclusive control over the market for ice. Its monopoly profits were at the expense of consumers, including working class folks struggling to get by. If you favor the little guy over the vested interests, how could there be any question about which is the right side?

Yet it is an article of faith on the left that the Supreme Court decided this case incorrectly.

They may talk about helping poor people, promoting health and safety, protecting the environment and many other things. But what the left most believes in is virtually no restriction on government’s ability to regulate the economy. They not only reject the restrictions that would be imposed by classical liberalism. They also reject the restrictions that would be imposed by any other ism.

In the “winter of discontent” (1978-79), the British economy was ground to a halt by the labor unions. As Megan McArdle writes:

Trash piled up in the streets. The truck drivers who ferried goods all over Britain went on strike — and the ones who didn’t, like oil tanker drivers, began feeding their destinations to “flying pickets” — mobile groups of strikers who would go from location to location, blockading them so that workers couldn’t get in and goods couldn’t get out. The BBC called them the “shock troops of industrial action” and that’s an accurate picture; effectively mobilized, flying pickets can grind the wheels of industry to a halt…

In Liverpool, the gravediggers went out, leaving bodies unburied for weeks. By the end of January, half the hospitals in Britain were taking only emergency cases. Full of righteous fury, the unions flexed every muscle, demonstrating all the tremendous power that they had amassed by law and custom in the years since the Second World War.

Almost no one on the left disagrees with the principle that government should be able to grant a monopoly to a labor union — just as the Medieval guilds monopolized their trades in earlier times. Almost no one on the left disagrees with the idea of a picket line — an extra legal activity designed to intimidate and coerce private citizens. Rarely will you hear any criticism on the left of the unions’ discrimination against outsiders — of their long history of excluding women, blacks and other minorities.

As I have written before, unions are not formed to help those at the bottom of the income ladder. They are organized against the lowest paid workers. A union can succeed in obtaining above-market wages only if it can keep other workers out of their market.

Unions are not about altruism. They are about the raw pursuit of self-interest. What we generally call “liberalism” is about accommodating that pursuit of self-interest. Think of the political sphere as a special kind of Hobbesian jungle in which each group tries to rig the rules of the game in order to enhance its share of the economic pie at the expense of everyone else. During the administration of Franklin Roosevelt, the federal government tried to codify this process — economy wide:

At [Roosevelt's] behest, Congress passed the National Industrial Recovery Act (NIRA), which attempted to regulate the entire economy, based on the Italian fascist model. In each industry, management and labor were ordered to collude to set prices, wages, output, etc. (acts that today would be a criminal violation of the anti-trust law). So intrusive were these regulations that what in retrospect seems like an incredibly silly regulation made it all the way to the Supreme Court, which responded by declaring the entire scheme unconstitutional.(“What is Classical Liberalism?”)

One more thing. The left is devoted to process, not to results.

When Britain turned Hong Kong over to the Chinese (1997), per capita income in Hong Kong was higher than it was in Britain. Think about that. This former British colony has no natural resources. It is basically a large rock sitting in the sea. Its citizens are mainly refugees who immigrated with little or no wealth. The only thing Hong Kong had going for it was that it had the freest economy in the whole world.

So how many people in the Labor Party said “the political economy of Hong Kong works better than the political economy of the mother country”? Not a one.

Comments (16)

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  1. Devon Herrick says:

    I find it somewhat strange that Thatcher is still such a polarizing figure more than 20 years after she was no longer in power. At the time of her ascendancy, Britain was paralyzed by labor strife at a time as industrial economies were transforming from manufacturing to service industries and foreign trade was on the verge of taking off.

    You would think that nearly 35 years after she became prime minister; more htan 20 years after she left office (and she was dead), people would look back on her with some measure of deference – even if they didn’t necessarily like her politics.

  2. Bob Geist says:

    John, Congratulations, you have most accurately described ObamaCare: “…government should have virtually unrestricted authority to intervene in the economic sphere. It should be able to set prices, control output, dictate quality standards, nationalize companies, create cartels and restrict entry into markets for any reason whatever.”

    Indeed, corporate merger mania (ACO-HMO) preliminary to federally protected (FTC and CMS waivered) cartel formation is rolling along already. Thanks, Bob

  3. IAN YOUNGMAN says:

    Goodman’s analysis is so shoddy.

    He cannot even spell Labour !

    Thatcher’s legacy-
    * Stolen Scottish oil and gas that accounted for 3% of Englisg GDP for the 1980s and 1990s enabling lower taxes to fund consumer booms.
    * Large areas of the North where 3 generations later a thriving coal industry has been replaced by part-time jobs and call centres-for the few who can get a job.
    * Giving away the housing stock leading to 30 years of house price increases so most people in London cannot afford to buy a house now- aberage cost of a family home £250,000 plus.
    * Bank deregulation that allowed banks to create money from money and not from real wealth and expand so much they went bang.
    * London and SE based economic growth ; Thatcher’s own words ” Liverpool should be left to rot ”
    * A police force that is an arm of the state and only now trying to recover from cover up after cover up. eg Hillsborough
    * A craven press,
    * A world where 1% of the population owns 99% of the wealth.
    * A world where ” i get what i want and screw everybody else ” is dominant.
    * A Britain that still thinks it is major power that can boss the world around -when it is mostly laughed at
    * An education system for the rich and where the poor are seen as consumers and fodder for low paid service jobs ( i nearly said factory fodder until remembering that she closed most of them)
    * Security services that think the end justifies any means at any time.

    and on unions – the TUC is headed by a woman, many unions have women bosses- many unions have substantial majorities of coloured members.They are at the forefront of racial, sex and gender equality -please so not import US problems to the UK.

    Thatcher once called miners “terrorists” as she destroyed a viable industry to make a political point.Yes the struggles were violent but it was the police using riot shields, long batons, illegal weapons -against unarmed miners and women – with an impunity against illegal actions, violence, and much more.

    She is not just a historic figure but a hateful reminder of how and why a once prosperous nation is divided and run by banksters and professional politicians who have mostly never done a days work in their lives.

  4. A.D. Samson says:

    “Rejoice, Thatcher is Dead”

    The people that are saying these things are probably the same people who are protesting with signs that read “Peace, Love, No War”. The hypocrisy in the messages is obvious.

  5. Gabriel Odom says:

    “In short, Margaret Thatcher destroyed an industrial system which had yes, provided workers with a secure livelihood, but yes, also done so at an unacceptable cost. These two things are the same legacy. They cannot be parted.”

    Yes, we Americans all see the Iron Lady as the Hero of Capitalism – but this title did not come without great cost.

  6. H. James Prince says:

    Mr. Youngman, I would assume – with such well-pronounced opinions on the vile nation that is my homeland – that you have at least been there.
    I have to agree some with Mr. Odom’s sentiment above, this “fix” cost a great deal, but we would have been much worse without it. My parents remember what the 1970s were like, and they believe we are better off because of Thatchers work.

    Also, let’s not forget that our pound sterling is still worth more than your dollar.

  7. Kumar says:

    This is a very enlightening post. I am for competition, and so, I am for the courts coming in the market and breaking monopolies.

  8. Patel says:

    You bring up some very interesting points about labor unions, it is terrible how these practices can play out and ultimately stalls the economy.

  9. Ken says:

    @ Ian Youngman

    You forget that Britain’s standard of living had sunk below Italy’s by the time of Thatcher’s first election. Meanwhile, Hong Kong’s pe capital income had surpassed Britain’s.

    Capitalism works. A country run by union thugs doesn’t work.

  10. Sandeep says:

    This is a powe

    “As I have written before, unions are not formed to help those at the bottom of the income ladder. They are organized against the lowest paid workers. A union can succeed in obtaining above-market wages only if it can keep other workers out of their market.”

  11. Frank Timmins says:

    John’s post serves as a reminder that how a nation’s economy progresses determines the ultimate fate of that nation. Using 20/20 historical hindsight it is crystal clear that the basis of the continuing success of a society is unyielding adherence to individual freedom and free market principles.

    There are always going to be differences in the success levels of humans. If we accept this premise the only question remaining is how we determine those more and less successful. One method is to have certain of us “pick the winners and losers” via government bureaucratic wisdom. Historically this always leads to either revolution or societal collapse. The only other option is allowing people to find their individual limits economically.

    Certainly regulation is involved, but only when it is necessary to promote competition and protect the public. It cannot be used to promote or afford advantage for one group over another. It is so strange that this simple “big picture” premise is so difficult for the Ians of the world to grasp.

  12. Ryan says:

    I think it’s sad that people celebrate another person’s death, regardless of what they think of that person’s leadership inefficiencies.

  13. Sam says:

    There are plenty of logical fallacies that can be said about both ideological ends, ie liberals and conservatives. Neither extreme or biased ideology is pure and infallible. None of our economic and social systems work, not to mention how dated they are.

  14. IAN YOUNGMAN says:

    What Americans find difficult to grasp is that Thatcher’s legacy still damahes people 3 generations later.

    And for those who say she freed the economy

    How massive is the UK and USA debt ? have you not noticed that both countries are broke.

    The coalfields were profitable, the railways worked without costing commuters up to $10000 just to travel to work each year.

    No it was not perfect but she was the surgeon who uses an axe and a hammer to cure an ingrowing toenail.

    I actually have an inside track as my economics lecturer became Maggie’s guru with his own mad version of total freedom but enforced by the state. 99% of his students thought he was barmy but just another academic living in a fantasy world-little did we know that a chemist called Thatcher would take him seriously and pave the way for the biggest global disaster since the 1920s – which is now a depression not a recession;the’ credit crunch’ was not a cause but an inevitable symptom of total every man for himself greed following deregulation- and that the US with an actor as president followed Mad Maggie shows how dumb all politicians actually are.

  15. Al Baun says:

    Thatcher being Brittan’s greatest leader is as subjective as Obama being America’s greatest leader. The comment is subjective, but people have the right to air their grievances. Thatcher was as effective as she could be; hero to some, demon to others. This e-platform belongs to John. We should be as respectful to our host as he is towards divergent thought. We should also let him know when he strays from reality.
    John continually defines the ‘left’, what they are thinking, what their agenda is, that Unions and government intervention is somehow ‘fascist’, etc. Is there the slight possibility that there is no left or right, only individual intransigence and false omniscient introspection into the hearts of those who see different approaches to society’s challenges? Everyone wants to see a happier and more successful America. Putting it ahead of our own interests is a start and government was created by us to referee unpleasant actions.
    Continuing to create greater wedges between various ideologies does little to remedy the issues. If this article is only for entertainment purposes, please let the readers know, else try being a bit more constructive with solutions for OUR country.

  16. Frank Timmins says:

    @Ian

    Perhaps you should have paid more attention to your economics lecturer, but seeing as you didn’t maybe you can check your facts on the economic situation.

    Bring Britain out of the industrial middle ages was completely necessary if the country were to avoid becoming a third world also ran. That could not have been accomplished without compromising the lifestyles of some individuals. So yes, some folks were hurt by Thatcher’s policies, but condemning her for what had to be done in spite of the whining of the self serving entitlement lobby is to ignore history.

    Politicians willing to do the right thing for the future of their country are very rare, as is evidenced by what we are currently having to abide in the U.S. She was one of those rarities.