NR Digital

Farewell to an Iron Lady

by John O'Sullivan
Margaret Thatcher left us her example

In the week between her death and her funeral, Margaret Thatcher suddenly became a body worth stealing. There had always been speculation about what would be the public attitude to her in Britain once death had put her above and beyond conventional political partisanship. Most people assumed that she would be quietly shoved into a respectable patriotic pantheon of famous British warrior queens and, like most British history these days, promptly forgotten. What the week following her death proved, however, was that she was always going to be too big for that.

The sheer weight of Mrs. Thatcher in post-war British politics explains much of the reaction to her death. She was the first major-party leader to stand against the social-democratic consensus forged by the Labour government of 1945–51 and entrenched by the Tory party’s manifest acceptance of it following its 1951 victory. Even in the later stages of its decomposition, this consensus could count on the support of most members of the Tory establishment — though the Tory grassroots were always largely critical of it. Thatcher took her stand on the side of the Tory rank-and-file on the common-sense grounds that without such firm opposition Britain would drift deeper and deeper into an enervating statism.

As she writes in the introduction to her memoirs: “Almost every postwar Tory victory had been won on slogans such as ‘Britain Strong and Free’ or ‘Set the People Free.’ But in the fine print of policy, especially in government, the Tory Party merely pitched camp in the long march to the left. It never seriously tried to reverse it. . . . The welfare state? We boasted of spending more money than Labour, not of restoring people to independence and self-reliance.”

Thatcher stood firmly and in small but good company against this Left consensus. She was backed by only one other member of the shadow cabinet, the noble Sir Keith Joseph, when she ran for the Tory leadership. For the four years of her role of opposition leader, she was in a shadow cabinet dominated by rivals and opponents. But she gradually edged them towards a more robust election manifesto than most liked. And when the election came, she had the spirit for it.

“Maggie Thatcher? Reactionary?” she asked in a 1979 speech. “Well, there’s a lot to react against.” But she did more. She won three elections against the social-democratic consensus. She defeated it “in the fine print of policy, especially in government,” on key issues too: labor-union reform, the “big bang” that made the City of London the main financial center for Europe, the privatization of 26 major state-owned industries . . . the list goes on. It does not include the welfare state, where she put off reform until it was too late, or Europe, where she was brought down in part because she was beginning to turn her attention to reforming it by opposing the same leftward drift she had fought in her own country. Still, she created a new consensus — not quite what she wanted but better than what she had fought, and far better than if the Tories had continued drifting thoughtlessly left under an uninterrupted succession of Heaths, Majors, and Camerons.

That accounts for an odd paradox in the reactions to her death: The extreme left, which hates her most, gives her the most credit for her achievements. At times they even exaggerate them, crediting her with savage cuts in the welfare state that never occurred. These delusions fuel the repulsive responses to her death: the street parties and the chanting of “Ding Dong! The Witch Is Dead,” which always turn out to be led or inspired by middle-class public-sector people in non-jobs. They are one vivid symptom of the cultural decline of Britain that she did not manage to stem, thinking it necessary to defeat the labor unions and the Soviets first. Her successes in that regard are among the reasons she is hated today. And she herself would see these outbursts as evidence that she had deeply wounded the Caliban Left’s causes if not destroyed them altogether. Ten years after losing office, she responded to a mob chanting “Thatcher, Thatcher, Thatcher, fascist, fascist, fascist, out, out, out!” by turning to her speechwriter, Robin Harris, and saying, “Oh, Robin, doesn’t it make you feel nostalgic?”

Her other opponents — moderate Labour, the cultural establishment, the BBC, etc. etc. — take a different tack. They suggest — historian David Cannadine in the New York Times is an example — in a world-weary way that she wasn’t that important really, a conventional Tory politician until the electoral defeats of 1974, when she saw an opportunity to rise and adopted an economic liberalism that was then in the air. She was more a symptom of global changes than their inspirer. She didn’t make much of a difference.

Maybe it’s more comforting to be defeated by a trend than by a person. But two things should be said in reply. In 1968 she gave a major lecture to the Tory party conference in which almost all the ideas that later became known as Thatcherism were clearly laid out. Seven years before that she had told a meeting of despairing Tory MPs brought together by the Institute of Economic Affairs that they should go into a different business if they couldn’t persuade the voters that Marks and Spencer gave them a better deal than the Post Office. She was the Real Thing. The second point is: If we are talking about global trends, maybe we should look at what the world thinks about Margaret Thatcher. She bestrode too many worlds for the Brits alone to determine her importance.

That is why “the most important peacetime British prime minister of the 20th century,” albeit a true description, is inadequate and limiting. In this judgment I am not referring to the Falklands. Her triumph in the Falklands does not make her a great wartime leader on the scale of Churchill and Lloyd George. The war itself was on too small a scale. But the diplomatic skill and military resolve she demonstrated on that occasion, not to mention her success, do make her a more formidable war leader than all but those statesmen who led Britain to victory in the four world wars of the last 250 years — namely, Chatham, his son Pitt the Younger, Lloyd George, and Churchill.

Nor are wars the sole test of international power and influence. Preventing wars and winning decisive conflicts without wars are even better indicators. Mrs. Thatcher’s record here was stellar in two respects.

In the first place, she was President Reagan’s most resolute and reliable ally in the last stage of the Cold War. She was by far the strongest critic in Western Europe of Communist repression in Poland and throughout the Soviet bloc. She joined Reagan in assisting Polish Solidarity to outwit the authorities and continue operating as, in effect, a national liberation movement. She played a decisive role in getting U.S. missiles stationed in Western Europe, stiffening the spine of other Western European governments so that they would resist the peace movement and accept the missiles. When that was achieved in 1984–85, it produced an almost instant change in Soviet policy. It persuaded the Soviets that they could no longer win the Cold War by military intimidation. She was therefore an active force in ensuring that the West did not lose the Cold War.

It was then that Mrs. Thatcher played her second important role in the Cold War: She acted as a go-between for Reagan and Gorbachev in their crabwise dance towards its peaceful end. Her search for a new type of Soviet leader had already settled on Mikhail Gorbachev, still a relatively junior member of the Soviet Politburo, when he visited Chequers on a stop-off air flight in 1984. She debated him over the lunch table, pronounced him “a man we can do business with,” and recommended him warmly to the president. Reagan reached the same conclusion and acted accordingly. He worked with Gorbachev to end the Cold War peacefully in a series of Soviet-American summits; Thatcher, though absent, had set the stage for the gradual Soviet surrender on arms control at the Geneva, Reykjavik, and Washington summits. 

Those summits in effect ratified the West’s peaceful victory in the Cold War. But they did not bring an end to Communism. Indeed, from the Soviet standpoint, they were part of Mikhail Gorbachev’s strategy to rescue Communism from its internal stresses and strains by freeing up resources locked inside his military budget for civilian purposes and by attracting aid and investment from the West. What brought about the end of Communism was competition from the revived capitalism in the West — and that was at least as much the work of Thatcher as of Reagan. 

Thatcher had been clearly the subordinate partner in their relationship on military and diplomatic policy. She fought and won some battles with Reagan, but in general he laid down the lines of policy and she broadly conformed to them. And given the relative size of the two economies, that should also have been true of economic policy. So why did such a shrewd observer as Owen Harries, the distinguished Australian editor of The National Interest, once remark that Thatcher would probably be regarded by history as more important than Reagan as an economic reformer?

Well, first, the recovery of the British economy in the 1980s was more impressive because it started from a lower economic point and occurred in a more left-wing country. Then, Thatcher had harder opposition to overcome — her labor-market deregulation, for instance, had to overcome resistance from timid Tory “wets” as well as from Labour MPs. Next, they had to defeat major non-parliamentary challenges from the labor unions, above all the 1984–85 miners’ strike. That was a victory for Thatcher as important in domestic politics as the Falklands War was in foreign policy. It removed the last lingering, nervous fear of both the voters and the markets that labor unions could render Britain ungovernable. Though Labour took some years to realize the fact, Thatcher’s victory entrenched her economic and labor reforms as the new consensus of British politics.

Once that happened, as Harries pointed out, the British economy began its long boom, combining economic growth with price stability. Above all, the privatization of inefficient state-owned industries turned them into dynamic private-sector ones. In general, Thatcher’s British economy, like Reagan’s revived U.S. economy, was characterized by change, profitability, growth, the better allocation of resources (including labor), and the emergence of new industries, indeed of an entirely new economy, based on the information revolution.

And that transformation did not stop at the Atlantic’s edge. Both economies became demonstration effects of what free-market reforms could accomplish in a remarkably short time. Though very similar, these demonstration effects were not identical: Tax cuts were America’s principal intellectual export; privatization was Britain’s. And of the two, privatization was the more important globally, since both Third World and post-Communist economies were burdened by a large number of inefficient state industries. As a result, privatization expertise became one of the City of London’s most profitable services over the next two decades. The Soviets and — still more remarkably — Western European Communists were forced to change course by the increasing evidence that privatization produced good results.

While researching my book on Reagan, Thatcher, and Pope John Paul II, I found this unwitting tribute to Thatcher in the Politburo archives: It’s a 1986 conversation between Mikhail Gorbachev and Alessandro Natta, the general secretary of the Italian Communist party:

A. Natta: At the same time we, the Communists, having either overestimated or underestimated the functions of the “welfare state,” kept defending situations which, as it became clear only now, we should not have defended. As a result, a bureaucratic apparatus, which serves itself, has swelled. It is interesting that a certain similarity with your situation, which you call stagnation, can be seen here.

M. S. Gorbachev: “Parkinson’s law” works everywhere. . . .

Natta: Any bureaucratization encourages the apparatus to protect its own interests and to forget about the citizens’ interests. I suppose that is exactly why the Right’s demands of re-privatization are falling on a fertile ground in Western public opinion.

For that reason Thatcher, even more than Reagan, posed an economic challenge to the Soviet Union. The challenge was: Either fall ever farther behind the capitalist West or reform. As the pope remarked, however, “Gorbachev is a good man, but Communism is unreformable.” And it was destroyed by the attempt to reform it.

Accordingly, once the command economies of the Soviet bloc collapsed in 1989, revealing the extraordinary wasteland of state planning, it was the Thatcher model that the new democracies mainly sought to emulate. She, Reagan, and John Paul II were all heroes in post-Communist Europe, but it was Thatcher to whom the new economic ministers, such as Poland’s Leszek Balcerowicz, Czechoslovakia’s Vàclav Klaus, and Estonia’s Mart Laar, looked as their model of how to reform a bankrupt socialist economy. And the more they followed the Thatcher model, the more quickly their economies rose from the dead.

It was not only in the post-Communist world that Thatcher was seen as an inspiration, however. In both the lagging Third World economies and in the rising, newly industrializing countries of Asia, she was a kind of economic heroine. She was frequently invited to Asian countries and frequently consulted by their governments. Thus Martin J. Sieff, in a wide-ranging column for the Asia Pacific Defence Forum, describes and analyzes the reaction in China to her death — and the relationship between her reforms and those of Deng Xiaoping:

Thatcher did not inspire the launching of Paramount Leader Deng Xiaoping’s Four Modernizations program in 1979. Deng was already determined to follow a policy of domestic free market pragmatism before she took power halfway round the world in May 1979.

However, the extraordinary success of Thatcher’s reform policies in transforming and reviving a Britain that appeared on the brink of economic collapse, impoverishment and even civil chaos when she took power had a direct and profound impact on Deng, his colleagues and their heirs over the next decade. It was also studied closely by a new generation of Chinese bankers and economists who were eager to learn and apply the most successful lessons of the world’s advanced industrial economies.

In short, the world outside Britain is generally of the opinion that Mrs. Thatcher had a profound impact on global affairs — her last effect being the rapid increase in living standards enjoyed by billions of poor workers in the Third World since 1989.

When Antonio Martino, an Italian friend of sound monetarist views, was elected in the 1990s as a member of the first Berlusconi administration, Lady Thatcher wrote him a congratulatory note, pointing out the mountain of difficulties that the new Italian government would have to climb if it were to succeed. Martino responded that the difficulties, though great, were not more formidable than those she had faced in 1979. He added that he and his colleagues had one great advantage that she had never enjoyed: They had her example. Lady Thatcher liked this compliment sufficiently to get his agreement to borrow it for the final words of her eulogy of Ronald Reagan. Its time has now come again.

As Mrs. Thatcher’s coffin is lowered into the ground, the mourners around the grave will include many admirers who, like Mark Steyn in a recent column on NRO, have concluded regretfully that the Thatcher administration was a brief glorious respite between two different kinds of failing Britain. And to be sure, evidence for the failure of Britain’s current economic, foreign, and social policies is piling up as relentlessly as the rubbish in Leicester Square during the Winter of Discontent. Ditto Americans and the failing policies of the Obama administration. It is tempting in the face of all this to pull the covers over one’s head, take a sleeping pill, and set the alarm clock for 2025 — except that we have her example. There are no final victories in politics, she once said, and therefore no final defeats either. The best tribute to her is to remember this and to act accordingly.