Thatcher – a legacy of destruction

By Jane West

The death of Margaret Thatcher is being shamelessly exploited by her Tory successors, including by awarding her an entirely inappropriate national funeral. This is all in the service of presenting the most divisive British Prime Minister of the 20th century as the most successful post-Churchill Tory leader, an electoral wizard, a paragon of statesmanship, the flame-bearer of liberty and ‘freedom’, a feminist icon and an innovative policy maker.

None are true.


She is in fact seen as a towering figure, not because of any great economic or popular success, but because no 20th century prime minister presided over such a ruthlessly successful offensive against the Soviet Union, the colonial world and working class living standards in Britain. For a time, her ‘success’ was measured in restoring profits for British companies at the cost of misery at home and death and destruction abroad, the consequences of which are still with us.

She governed a country where her policies led to inner city decline, mining and steel towns reduced to ghost towns, a complete breakdown in relations between excluded black communities and a police force legitimised in brutalising them, riots on the streets including due to the hated Poll Tax, ten hunger strikers dying in Ireland, a series of confrontations with the trade unions culminating in the year-long miners’ strike which polarised the entire country and the financial deregulation that finally led to the 2007-08 financial collapse.

Nor was her much vaunted electoral success any more real.

First, she did not reverse the relentless downward trend in the post-war support for the Tories from its 1931 peak of 55 per cent. Her first election victory in 1979 was on only 44 per cent of the vote (less than Heath in 1970 on 46.2 per cent). In 1983, the much vaunted post-Malvinas landslide, her vote share actually fell to 42.4 per cent.

Rather than 1983 being the much proclaimed runaway victory on the back of the Malvinas’ war and the profits of North Sea oil, it was entirely down to the split in Labour’s vote with the departure of the ‘Gang of Four’ to set up the SDP. In a first-past-the-post system this created a landslide in seats for the Tories on a reduced share of the national vote.

In fact, she became deeply unpopular from the outset –1980 polls already showed that 6 out of 10 voters were dissatisfied with her leadership.

However the combination of Labour’s woes and Thatcher’s consequent durability despite her deep unpopularity in a polarised society created a myth of her electoral success. This was subsequently exploited by the Labour right – led by Mandelson and Blair – as a cover for their project of moving Labour towards Thatcherite economic policies. So the fiction of her electoral success became enduring, endorsed by her supporters and opponents alike.

Her status as a world ‘statesperson’ is an equal myth. She formed a close personal alliance and friendship with Ronald Reagan, backing his policy of renewed global US military assertiveness after the retreat forced by defeat in the Vietnam War. She threw Britain into its service.

This renewed assertiveness in US foreign policy was aimed at tightening the military ring around the Soviet Union, moving the US military presence further forward to the Soviet borders to so step up the military pressure that it would crack economically and politically.

Thatcher was entirely engaged in all the overt and covert steps in this.

A key covert step was to arm the minority and marginal Mujahidin opposition in Afghanistan (which produced today’s Al Qaeda) against the successful, reforming pro-Soviet government.

A second string was to build up Saddam Hussain’s Iraq against the independent, anti-Western, Islamist regime that had overthrown the US’s key regional ally and anti-Soviet policier, the Shah of Iran.

But the policy was most dangerous in the field of nuclear arms. From the Cuban missile crisis onwards, the framework for restraining the nuclear arms race and inhibiting nuclear threats was the reality of ‘MAD’ – Mutually Assured Destruction. The nuclear arsenals of the great powers were understood to be at a level where they were effectively unusable, as the retaliatory power would ensure total wipe-out for both sides (and most of the planet). This was the meaning of ‘deterrence’.

Reagan’s policy was to make nuclear weapons usable again, to re-establish a ‘first strike capacity’. This was to be achieved by a combination of developing smaller, more targeted short-range nuclear missiles and creating a satellite missile defence shield that would prevent a retaliatory strike over long distances with ICBMs. In other words, to create the capacity to hit the USSR with short-range nukes from Europe, while preventing it hitting back at the US itself.

The evident corollary of this was that the potential theatre of war in a nuclear confrontation between the US and the USSR moved into Europe.

One of Thatcher’s first acts after 1979 was to agree to Britain becoming a forward ‘aircraft carrier’ for this US military strategy by agreeing to host nuclear-armed Cruise missiles for launch from airbases in Britain – most famously Greenham Common.

Not surprisingly this created more than a little consternation, leading to a mass movement against Cruise missiles and a new growth of CND.

But it also made her very popular in the US – the root of the idea that she was some kind of global statesperson.

As the US’s most compliant junior partner, Thatcher was able to bask in reflected glory. And as the US’s dangerous arms race eventually bore fruit in the ideological and political collapse of the leadership of the USSR before imperialism, Thatcher claimed a share of the laurels for the victory of the ‘free world’.

But in reality it was entirely down to the US. Thatcher had a walk-on part as cheerleader and toady – that is what the myth of her ‘statespersonship’ actually amounts to.

The claim that this Cold War policy – or the 907 killed in the Malvinas war presented as a war against the Galtieri junta – had anything to do with freedom or democracy is exposed by the overall direction of her foreign policy.

At the height of the world-wide anti-Aparthied movement, when Mandela had been in prison for over 20 years, Thatcher vetoed sanctions and invited the reviled racist PW Botha to Chequers (the first visit by a South African premier since 1961), describing the ANC as a ‘typical terrorist organisation’.

The real meaning of her rhetoric on ‘freedom and democracy’ is shown by her cloying compliments and direct support to the worst of dictators. Her roster of bloody-handed pals included Pinochet who ‘disappeared’ many thousands of Chileans in the 1970s and 80s, General Zia of Pakistan who hanged Bhutto and brutalised any opposition, General Suharto of Indonesia who was responsible for a massacre of 500,000 alleged Communists and the bloody invasion of East Timor, the Saudi regime that was rewarded with huge arms deals and many others.

As to the claim she had anything to do with feminism, that is laughable in the extreme. She famously claimed ‘I owe nothing to women’s lib’. The truth is she could not possibly have become Tory leader if the position of women in British society had not been so dramatically changed by their post-war entry into the workforce and the struggles of feminists and trade unionists for equal rights, equal pay, abortion rights, childcare and against sexual violence.

But she was certainly no feminist. Her high unemployment, welfare-cutting policies hit women particularly hard. Not a single other female Tory MP was ever in one of her cabinets.

Of course, for Thatcher to emerge as a woman leader of a developed country at that time inevitably contributed to a sense among women that no door should be closed to them – as Indira Gandhi, Golda Meir and Sirimavo Bandaranaike had done before, irrespective of their rejection of feminism and their failure to use their roles to take measures to improve the position of women.

But as a model for how such an advance of an individual woman could benefit all women – she neither cared nor considered such a thing.

But in the end the biggest lie about Thatcher is that her policies ‘saved the country’, when in fact her legacy is the financial crisis and the economic problems that are still unfolding.

What is often pointed out is that Thatcher destroyed the core of Britain’s manufacturing industry. That is why the successive rounds of quantitative easing in response to the current crisis have forced down the pound but not led to any boost in exports. Because the legacy of the 80s is that the country has very little to export.

What is not pointed out is that her policies of financial deregulation not only destroyed manufacturing, but directly began the huge build-up of debt that finally crashed in 2007-08.

The core of her policy, now labelled ‘neo-liberalism’, was massive financial deregulation. This is when the distinction between the retail and investment banks was dissolved, and legal constraints on using savings for risky financial deals and loans were relaxed. This is when constraints on interest rates, periods of loans and credit arrangements were lifted.

The strict legal framework governing Hire Purchase agreements – which protected both lender and borrower – were replaced by spiralling interest on credit (still continuing with the rise of Pay Day Loans on grotesque interest rates).

As invariably happens when finances are liberalised – accepted by all serious economists of right and left – is that the saving rate plummets.

For private savers and households, loose credit meant a credit card, bank loan and mortgage binge that increased household indebtedness without expanding the productive base of the economy.

For the banks – freed from regulatory constraints on the use of their deposits and increasingly protected from risk as their ballooning size ensured they had become ‘too big to fail’ – it led to more and more speculative and risky financial operations. A boom in ‘high return’ loans that carried mounting risks – credit cards, sub-prime mortgages, currency speculation, derivative deals and the entire gamut of risky enterprises that finally crashed in the crisis.

This meant that the build-up of state and private debt started decisively under Thatcher. The lure of mega-profits in the financial sector sucked further investment out of struggling British manufacturing. The mantra of no state subsidies or bail-out meant no action was taken as manufacturing contracted.

As the economy effectively shrank, Thatcher subsidised the rising gap between tax and spend through sell-offs of nationalised industries and utilities and the tax income from the North Sea oil bonanza. This allowed the overall debt to be paid down without addressing the structural problem of declining revenues.

This all seemed to continue working through the 1990s, due to the financial sector’s rapid expansion – based on increasingly risky lending – until it all fell apart in the financial crash.

The real legacy of Thatcher’s financial deregulation, destruction of manufacturing and neo-liberalism is the banking crisis. It has exposed the fundamental weakness of the entire British economy since the 1980s. She didn’t ‘save the country’; she condemned it to economic decline.

She did much other damage.

The abolition of the GLC ensured London’s infrastructure went into a spiral of decline with no driver for investment. Borough was instead pitched against borough, and fares shot up as the transport authority made decisions from a position of monopoly with no political oversight.

Other attacks on the powers of councils – rate-capping, political constraints, etc – further undermined local democracy and reduced the quality of life in our cities.

The ‘right to buy’ reduced the social housing stock, much of which ended up in the hands of unscrupulous landlords, and led directly to the housing crisis of today.

Clause 28 and the failure to do anything to address AIDS led to unnecessary deaths, stigmatisation of sufferers, a new wave of homophobia and the ruining of lives.

Her ‘let the rich get rich’ and let the poor suffer defined a whole generation of ‘Thatcher’s children’ who believed there was ‘no such thing as society’ and that rampant individualism was both morally justified and fundamentally necessary.

It infected the Labour Party, and brought the war-monger Blair into its leadership, the rejection of Clause IV and any commitment to a redistributive ideal, promoted a layer of self-seeking ‘champagne socialists’ and ensured that the immense popularity of Labour in 1997 became a lost opportunity.

And now the Tories and their Labour right acolytes are at it again. Whereas in 1997 the booming City gave the illusion of success to the policies of the Thatcher era, and there was some generalised concern that Labour should not jeopardise this, no one in their right mind believes that today.

The policies of this Tory government – Thatcherism Mark II – have failed to solve the problems of the economy. This is because they are the same policies that caused the problems in the first place.

Labour should reject the guff about Thatcher’s great legacy, and pledge that when it wins in 2015 – which it will, unless sabotaged from within its own ranks – it will put the final nail in the coffin of Thatcher’s disastrous, neo-liberal legacy.