I spent the last two weeks in New York, hence the lack of blogging.
Fortunately or unfortunately, it meant I missed the last two weeks of discussion surrounding the legacy of Mrs Thatcher.
Of course, in America, it was all a bit more black and white. – Mrs Thatcher good, Arthur Scargill bad (well America doesn’t know who Arthur Scargill is, but if they did know who he was, I’m sure they would dispprove of a Communist backed trade union militant….)
I updated an old post – economic impact of Thatcher here.
But, to give an even briefer summary. Mrs Thatcher can claim some successes. The labour disputes and poor productivity of the 1970s did need tackling, and here Mrs Thatcher can claim some success. The high inflation she inherited in 1979 also needed tackling.
However, everything positive seemed to be achieved at a high cost, the miner’s strike may have fundamentally weakened organised labour, but it wasn’t achieved without tremendous bitterness and social division. A more consensual politician could have done more to help overcome the market failure of coal pit closures. However, it seems inconceivable that the government should still be subsidising 100,000 miners to produce coal that damages the environment, and we don’t really need. It was inevitable the economy would shift and move towards a more service sector based economy. However, there are different ways of managing change, and Mrs Thatcher seemed to have little empathy for those facing unemployment.
Inflation was reduced, but only at the cost of a very deep recession (1981) And ironically, one of the most important achievements of Mrs Thatcher – bringing inflation under control, was then thrown away with reckless abandon with the entirely avoidable boom and bust of the late 1980s. If you can blame the 1981 recession on the previous administration, there was no excuse for the downturn which started in 1990. The 1991 recession was the inevitable consequence of an unsustainable economic boom which saw rapid growth in income and wealth inequality. In the financial deregulation and rapid growth of the 1980s, also were the seeds of the later credit boom and bust. Under Thatcher, it seemed greed was good and was rewarded. But, the reckless pursuit of profit is not without social costs.
Perhaps the greatest economic cost of the 1980s, was ending the post-war consensus on full employment. The unemployment record of the 1980s was truly dreadful.
The only thing to be said in support of Mrs Thatcher’s economic policies on unemployment is that the greater labour market flexibility she encouraged in the UK, is one factor in explaining the relatively lower rate of unemployment in the UK compared to EU countries.
Overall grade 4/10 – Many missed opportunities.