Margaret Thatcher: May she rest in peace
I’m too young to remember the Thatcher and Reagan revolutions of the 1980s, but I continue to admire their rhetoric against socialism and in favor of free markets 25 years later. After hearing about Margaret Thatcher’s death on Monday, I spent some time viewing some of her more classic speeches and quotes, such as the 1981 “the Lady’s not for turning” speech and her 1976 rejection of socialism because “[t]he problem with socialism is that eventually you run out of other people’s money.”
Thatcher had a grasp of the United Kingdom during her reign as prime minister and forever changed the country for the better. She pointed out the immorality of socialism at a time when many still believed in the socialist model. She looked at the United Kingdom’s problems of high unemployment, absenteeism in the workplace, and energy blackouts, and she found the UK’s slow slide towards socialism to be the root of the problems. Through privatization, sound money, and an emphasis on individualism, she helped reverse some of the UK’s troubling trends.
Her privatization programs freed the UK from labor unions and allowed many inefficient, subsidized companies to fail. She cut spending for local governments, education, and housing and in so doing defied the logic of entrenched interests. She had the foresight to understand the Euro was a bad idea for Brits, and, as we look at the current mess in the EU, boy was she right! She was a tax cutter who slashed the highest marginal tax rate from 83 percent of earnings to 60 percent and the common rate from 33 percent to 30 percent; revenues, by the way tripled!
And, while her program, which was called Thatcherism then and would be described as heartless austerity today, caused an immediate uptick in unemployment, the long-term results for the UK were breathtaking. Inflation rates under Thatcher fell from 21 percent to 2.5 percent by 1986. Unemployment rates increased through the spring of 1984 to 12 percent because of her many privatizations, but they then fell to 7 percent by the end of her tenure. By the mid-1980s, the UK was enjoying rates of economic growth above 4 percent thanks to Thatcher’s reforms, and they hit 5 percent growth in 1988. Such rates are uncommon in modern industrial economies, but Thatcher propelled the UK well above trend by not taking slow growth for granted and by disrupting the status quo.
Margaret Thatcher wasn’t perfect – her foreign policy was a mess, and government (as a percentage of income) still managed to grow overall under her watch. But, her words and policies remain relevant today because Americans, Brits, and the rest of the world are confronting many of the same issues Thatcher faced head-on not so long ago: Government spending has ballooned in the past 25 years; welfare programs meant to help the poor have had the unintended effect of creating an entitlement class; and the values underpinning a free society – individualism and responsibility – are viewed as quaint and outdated. Discussions about government deficits today have shifted away from spending as the problem towards revenue (and tax hikes!) as the solution.
Much like the UK (and US) of the 1970s, the lamp of liberty here in America and in the UK today in 2013 has been diminished by statism and government largesse. There are good reasons to be pessimistic about our country and the world, but maybe the most important take-away from Thatcher’s moment is the following: Our most pessimistic moments are the ones where, perhaps, we should be most optimistic. It’s in the dark moments, when things couldn’t get much worse, someone like Margaret Thatcher emerges, dares to stand up, and speaks truth about freedom and its inherent morality.
May her contributions to liberty be remembered, and may she rest in peace.
Scott Beaulier is Executive Director of the Manuel H. Johnson Center for Political Economy at Troy University.