Margaret Thatcher In Perspective

My opinion is that Margaret Thatcher was a product of the time and situation during which she became British Prime Minister.

During the summer of 1978, I was on my first return visit to my native England just after completing high school in the U.S. I seem to remember a blond woman in the news one day criticizing the present government of Britain. I did not know who she was and did not pay much attention. The following year, she was in the news again. Her name was Margaret Thatcher and she had just become prime minister of Britain.

I am no conservative when it comes to economics, as Thatcher was, but I do have some understanding of the highly controversial policies that she put into place if we consider the context.

The winter of 1978-79 was known as "The Winter of Discontent" in Britain. The economically liberal Callaghan government had gone on a spending spree. The result was a notorious strike-inflation spiral. Inflation was completely out of control, it would reach a dangerous nearly 14% in 1979. Workers in one industry would see workers in another industry getting pay raises by going on strike, and so they would strike too, all of which was fueling the spiral of inflation.

Thatcher won election in 1979 and purposely induced a recession because that was the only way to stop inflation. Nearly two years later, Ronald Reagan would take office in the U.S. and follow a similar course. The recession of the early 1980s was nasty in both countries, but it did succeed in stopping inflation and I agree with what they did. They simply had no choice, going too far left is as bad as going too far right.

It is said that if one list could be made of the most loved people ever, and another of the most hated, there would be many of the same people on both lists. There are few better examples of this than Margaret Thatcher. She knew how to handle inflation, but the resulting recession was really painful. Maybe there would be better memories of her if that had not been necessary, but that is not her fault. She is seen as a divisive figure, but once again that is due to the times and the fact of how far apart Britain's two main parties are.

I was in Britain only once during her 1979-1990 tenure, for a three week visit, but I did follow what was happening from a distance. I also have to agree with her taking on the coal miner's union. We cannot keep coal pits open when they are nearly mined out, and no longer profitable, just to preserve jobs.

I see Margaret Thatcher, and her U.S. counterpart Ronald Reagan, as well as to some extent the Canadian counterpart Brian Mulroney, as not only necessary products of their times, but also as half of the big picture of economics.

The left and the right, which we would call capitalism and communism in their more extreme forms, bring one another into existence because each is only half of the picture. This is because when one exists the other must also exist, on the opposite side, to restore the true economic balance. Put simply, economics is complex but most people are relatively simple so that we tend to see only part of the big picture. My view is that an economic system that is either well to the right, or well to the left, will be ultimately unsustainable because each is only half of the picture. The system will bounce back and forth from one side to the other in an effort to achieve sustainable balance.

Economics is a manifestation of freedom. My doctrine is that there are two slants to freedom, "freedom to" and "freedom from". The simplest example that I can think of is smoking. Should people have "freedom to" smoke, or should they have "freedom from" second-hand smoke. In the economic manifestation, the conservative right represents "freedom to", while the liberal left represents "freedom from".

The right wants people to have freedom to do all that they can to earn as much money as they are able to, and to spend it as they see fit. The right points out that taxing and spending by the government tends to result in destructive inflation. The left wants people to be able to earn money, but since money inevitably equals power they do not want a few wealthy people to use their power to set everything up to suit themselves so that the rich get richer and the poor get poorer, as tends to happen with capitalism. The left points out that when the rich take too much wealth for themselves, it does not leave enough money in circulation to buy all of the goods and services that are being produced in the economy, so that companies begin cutting back on production and a recessionary spiral gets under way.

My view is that an economic system must accommodate the entire freedom spectrum from "freedom to" to "freedom from". It can either do it by bouncing back and forth from right to left so that the two ultimately balance each other, or it can do it by the much more smoother and efficient method of setting a middle course to begin with. Capitalism and communism both have valid points, but also serious flaws, and the goal should be to set a middle course with the best of both and the worst of neither.

I am a dual national of the U.S. and Britain, although I have spent vastly more time in the U.S. It is from Britain that I draw the lesson of going too far left, and it is from the U.S. that I draw the lesson of going too far right. The U.S. economic crashes of 1929, 1987 and, 2008 were caused by the wealthy taking too much money out of the system so that there was not enough consumer spending to buy all of the goods and services being produced.

This is the context in which Margaret Thatcher must be understood. Reagan and Thatcher were too far right, but they had to be because the governments before them, Carter and Callaghan, were too far left. It would be much better just to set a balanced course from the beginning, but most people can only see one side or the other and not the whole picture.

What both Thatcher and Reagan did wrong was not to steer to the right at the beginning of the 1980s, they had little choice but to induce the recession because there was no other way to stop inflation. What they both did wrong is to stay with their conservative economic policies after this objective had been accomplished. They both should have steered toward the center, but they didn't. The result was the 1987 economic crash in America and Thatcher being removed by her own party after her attempt to organize Britain's tax system so that everyone, rich and not-so-rich, would pay just one flat tax.

(By the way, in a parliamentary democracy it is the party which rules and not the prime minister. If a prime minister becomes too unpopular, the party can simply replace him or her with someone else and continue to govern. This is what happened to Thatcher in 1990, and to Brian Mulroney in Canada. In the presidential system, in contrast, the president rules rather than the party and cannot be readily removed until his term is up).

Why was Thatcher so determined and uncompromising? My explanation is simple. Remember in my economic writings how we saw how people are designed to believe in something and when a person may not have really grasped the true religion, their nation or ideology or politics takes the place of religion. I do not know what Margaret Thatcher's religious convictions were, but she was the daughter of a Methodist minister and so would have been very familiar with Christianity. She saw herself as the saviour (savior) of Britain against the falseness of socialism and the diabolical Labour Party. It became very much a religious crusade, in which any kind of compromise would be completely unacceptable.

Another factor was warfare. For centuries, Britain had been in some kind of conflict at least every generation or so. But then along came the 1980s. The nation's collective psyche told it that it was time for another of the periodic battles of history. But, after the Falklands crisis of 1982, there was no significant foreign enemy to be found. So, the country turned inward and reenacted it's own civil war of long ago in the form of the Labour Party and socialism versus Thatcher.

Managing a modern economy does not require an iron will. It requires flexibility and quick reflexes to keep to a center course. It calls for swift and skillful turns, not for ideological dogma. A driver that only knows how to turn left is not going to get any further than a driver who knows only how to turn right.

Capitalism can be compared to a jungle in the same way that communism can be compared to a zoo. I used this analogy in the book "The Patterns Of New Ideas". The animals in the zoo look outside and see the animals in the jungle running free, and they long for their freedom too. One day, they break out of the zoo. At first, the former zoo animals are elated to have their freedom. But after a while they start to see that while the jungle is free, it is also harsh and competitive. Unlike in the zoo, there is no guarantee of the necessities of life.  Also, they realize that the animals which they saw outside from their cages in the zoo were the ones that were doing relatively well. There are many more animals in the jungle that are not doing as well. The former zoo animals start to feel that maybe the zoo was not so bad after all. They do not really want to go back to the zoo, but decide to look for a middle way between the zoo and the jungle. The jungle represents "freedom to" and the zoo represents "freedom from", the best arrangement is halfway between the two.

Capitalism and communism can also be compared to two people and a cart. Both people steering the cart and neither of them pushing, is like communism and it does not get very far. Both people pushing the cart, and neither of them steering, is like capitalism. The cart goes faster, and faster, and faster, until it crashes. The mild socialism that is halfway between the two is represented by one person pushing and the other steering, and it does better than either of the other two.

Once again, my belief is that an effective and sustainable system of social programs is one that is based on income from a country's resources, as much as possible, and not in loading people with taxes. The trouble with socialism is that there is a tendency to believe that if a moderate amount of socialism works well, and it does, then more socialism will work even better, except that it doesn't. Economics is like a peak, with the peak of efficiency being halfway between capitalism on the right and communism on the left.

Both capitalism and communism misunderstand human nature. A fundamental flaw of capitalist thinking is that the goal of everyone is to be rich, and they spend their lives doing all that they can to achieve that goal. This simply is not true. It is set up to support those whose goal is to be rich, and that is what makes it unfair.

We could say that the most successful economic system is one that ends with the fewest people in prison. Countries that practice either communism or rightward capitalism tend to have higher prison populations than the mildly socialist countries in the middle. The more difficult it becomes to live by the rules, the more people there will be who don't live by the rules.

I believe that when there is an ideological conflict, the one that is nastier will be the weaker one with the nastiness being an attempt to compensate for the weakness. The least nasty, in my opinion, is the mild socialism that is halfway between capitalism and communism.

The further right or left anyone is, the more ideological they tend to be, making economics operate by dogma. Thatcher's policy of home ownership is an example. She tried to sell off Britain's council houses in order to make as many people as possible into homeowners. This did not work well because a lot of people either do not really want to be, or are simply not cut out to be homeowners.

It is my convinced opinion that a government should maintain certain industries, whether or not they are making a profit. To do otherwise is just more ideological dogma. How can a country really be independent without a certain capacity to make steel? What about sovereignty, should state-run airlines be privatized even though if they should go out of business it would mean that the country would be dependent on foreign planes to fly it's citizens between their own cities? How about buses, they may require subsidy but is this more than the cost of doing without them, making it more difficult for them to work and so cutting into consumer spending? It boosts an economy if people can get wherever they want to go as easily as possible.

The criteria for government programs is cost. The programs will cost money but which is greater, the cost of having them or the cost of not having them?

Economics is not the same thing as quality of life. The Callaghan government that preceded Thatcher is much reviled for going too far left. I first revisited the country where I had been born in the summer of 1978, after having not been there since I was a young child. I thought that I would like it, but was not sure exactly what to expect. However, I was delighted at what a fun and carefree place Britain seemed to be. The main objective seemed to be simply to have fun, the attitude being "one day you were born, and one day you will die, so you might as well have fun in between". I was pleasantly shocked that I could be walking, it would start to drizzle, as it always does sooner or later in England, and people would pull over and offer me a ride. Everything seemed very agreeable, at least as long as one did not try to find a better job.

To get an idea which economic system would work best in a country at a given time, go into a pub or bar and watch groups of people buying drinks. If they buy the drinks one-by-one, or with couples two-by-two, then the thinking is more rightward. But if the people within groups take turns buying rounds of drinks, then there is socialist thinking.

So much depends not on economics, but on the character of the population. We need people who value work, learning and being well-informed, taking care of their health and, following the Word of God. The way to be a patriot is not to wave a flag around, anybody can do that, but to take care of your health so as not to be a burden on the health care system of your country.

Thatcher was the first western leader to meet Mikhail Gorbachev. Him and his wife visited her in late 1984, and he became Soviet leader the following spring. Anyone can say or write all they want about the Cold War, but it would not have ended as it did without him. Gorbachev deserves more credit than anyone, and should not be forgotten even if the present Russian government does not care for him.

(Ironically, Russia would prove the truth of Communist denunciations about the evils of capitalism by it's own history. After the end of Soviet Communism in 1991, the country went capitalist and abundantly demonstrated just what an unfair system it can be. A few people got very rich, but most people were not better off. My opinion is that the present government is the best that Russia has had since the beginning of Communism in 1917).

Another irony is that the Argentine government that Thatcher went to war with over the Falkland Islands in 1982 was so right-wing that they were killing leftists in the so-called "Dirty War". This military government seized power in Argentina in 1976, and ruled until 1983. They came up with a novel way of executing leftist opponents by flying them out over the ocean, and then dropping them out of the plane. Maybe they and Thatcher should have been soul mates.

Thatcher was clearly a skeptic of the European Union. Brits are touchy about giving up sovereignity. The British way of doing things is to make sure that no one gets too much control. Britain began modern democracy by limiting the power of the king with the Magna Charta. Alone among the major nations of the world Britain does not have a written constitution, only the way that things have always been done, because that might mean giving up control to a piece of paper. Britain has never been ruled by a dictator because Brits will not follow someone who steps in and tries to take control. They followed Winston Churchill during the wartime, but swiftly voted him out just as soon as the war was over. Britain's parliamentary system makes it easy to remove a prime minister if he should start to act like a dictator or try to amass too much authority.

Hopefully, other Europeans will understand that Brits do not like to give up control. In fact, it could be called their national characteristic. But it is wonderful that Europe has gone from innumerable wars to where it is now, and Britain should have a vital part in it.

I think that Thatcher's charisma is underrated. She must have had some kind of magnetic personal appeal. One does not transform a country just by argument alone. A charismatic leader does not even have to use force, people will follow because they want to. Truly charismatic leaders can really light up a person's soul. Aung San Suu Kyi seems to be loaded with charisma. She can make people feel as if they can conquer the world, and want to conquer it just so that they can name it after her.

Finally, Margaret Thatcher just looked so English. To anyone that was born over there, she might be seen behind the counter at one of those old fish and chips shops. One might say "I'll have an order of fish and chips and a cup of tea". She would say, in a very British accent, "That'll be three pounds forty (or whatever price inflation has made it by now)".