Thatcherism

[A] mixture of free markets, financial discipline, firm control over public expenditure, tax cuts, nationalism, "Victorian values" (of the Samuel Smiles self-help variety), privatisation and a dash of populism.

— Nigel Lawson's definition of Thatcherism.[7]

Thatcherism attempts to promote low inflation, the small state and free markets through tight control of the money supply, privatisation and constraints on the labour movement. It is often compared with Reaganomics in the United States, economic rationalism in Australia and Rogernomics in New Zealand and as a key part of the worldwide economic liberal movement.

Nigel Lawson, Thatcher's Chancellor of the Exchequer from 1983 to 1989, listed the Thatcherite ideals as "free markets, financial discipline, firm control over public expenditure, tax cuts, nationalism, 'Victorian values' (of the Samuel Smiles self-help variety), privatisation and a dash of populism".[4] Thatcherism is thus often compared to classical liberalism. Milton Friedman said that "Margaret Thatcher is not in terms of belief a Tory. She is a nineteenth-century Liberal".[8]

Thatcher herself stated during a speech in 1983: "I would not mind betting that if Mr Gladstone were alive today he would apply to join the Conservative Party".[9] In the 1996 Keith Joseph memorial lecture, Thatcher argued: "The kind of Conservatism which he and I [...] favoured would be best described as 'liberal', in the old-fashioned sense. And I mean the liberalism of Mr Gladstone, not of the latter day collectivists".[10] Thatcher once told Friedrich Hayek: "I know you want me to become a Whig; no, I am a Tory". Hayek believed "she has felt this very clearly".[11] The relationship between Thatcherism and liberalism is complicated. Thatcher's former Defence Secretary John Nott claimed that "it is a complete misreading of her beliefs to depict her as a nineteenth-century Liberal".[12]

As Ellen Meiksins Wood has argued, Thatcherite capitalism was compatible with traditional British political institutions. As Prime Minister, Thatcher did not challenge ancient institutions such as the monarchy or the House of Lords, but some of the most recent additions such as the trade unions.[13] Indeed, many leading Thatcherites, including Thatcher herself, went on to join the House of Lords, an honour which William Ewart Gladstone, for instance, had declined.[14] Thinkers closely associated with Thatcherism include Keith Joseph, Enoch Powell, Friedrich Hayek and Milton Friedman. In an interview with Simon Heffer in 1996, Thatcher stated that the two greatest influences on her as Conservative leader had been Joseph and Powell, who were both "very great men".[15]

Thatcher was a strong critic of communism, Marxism and socialism. Biographer John Campbell reports that in July 1978 when asked by a Labour MP in Commons what she meant by socialism "she was at a loss to reply. What in fact she meant was Government support for inefficient industries, punitive taxation, regulation of the labour market, price controls – everything that interfered with the functioning of the free economy".[16]

All too often the ills of this country are passed off as those of society. Similarly, when action is required, society is called upon to act. But society as such does not exist except as a concept. Society is made up of people. It is people who have duties and beliefs and resolve. It is people who get things done. [Thatcher] prefers to think in terms of the acts of individuals and families as the real sinews of society rather than of society as an abstract concept. Her approach to society reflects her fundamental belief in personal responsibility and choice. To leave things to society is to run away from the real decisions, practical responsibility and effective action.[42]

— No. 10, Statement, The Sunday Times (10 July 1988)

It is often claimed that the word Thatcherism was coined by cultural theorist Stuart Hall in a 1979 Marxism Today article.[57] However, this is not true as the term was first used by Tony Heath in an article he wrote that appeared in Tribune on 10 August 1973. Writing as Tribune's education correspondent, Heath wrote: "It will be argued that teachers are members of a profession which must not be influenced by political considerations. With the blight of Thatcherism spreading across the land that is a luxury that only the complacent can afford".[58][59] Although the term had in fact been widely used before then,[60] not all social critics have accepted the term as valid, with the High Tory journalist T. E. Utley believing "There is no such thing as Thatcherism".[61]

Utley contended that the term was a creation of Thatcher's enemies who wished to damage her by claiming that she had an inflexible devotion to a certain set of principles and also by some of her friends who had little sympathy for what he called "the English political tradition" because it facilitated "compromise and consensus". Utley argued that a free and competitive economy, rather than being an innovation of Thatcherism, was one "more or less permanent ingredient in modern Conservative philosophy":

It was on that principle that Churchill fought the 1945 election, having just read Hayek's Road to Serfdom. [...] What brought the Tories to 13 years of political supremacy in 1951 was the slogan 'Set the people free'. [...] There is absolutely nothing new about the doctrinal front that she presents on these matters. [...] As for 'privatisation', Mr. Powell proposed it in [...] 1968. As for 'property-owning democracy', I believe it was Anthony Eden who coined the phrase.[62]

In foreign policy, Utley claimed Thatcher's desire to restore British greatness did not mean "primarily a power devoted to the preservation of its own interests", but that she belonged "to that militant Whig branch of English Conservatism...her view of foreign policy has a high moral content". In practical terms, he claimed this expressed itself in her preoccupation in "the freedom of Afghanistan rather than the security of Ulster".[63]

Such leftist critics as Anthony Giddens claim that Thatcherism was purely an ideology and argue that her policies marked a change which was dictated more by political interests than economic reasons:

Rather than by any specific logic of capitalism, the reversal was brought about by voluntary reductions in social expenditures, higher taxes on low incomes and the lowering of taxes on higher incomes. This is the reason why in Great Britain in the mid 1980s the members of the top decile possessed more than a half of all the wealth.[64] To justify this by means of economic "objectivities" would be an ideology. What is at play here are interests and power.[65]

The Conservative historian of Peterhouse, Maurice Cowling, also questioned the uniqueness of "Thatcherism". Cowling claimed that Thatcher used "radical variations on that patriotic conjunction of freedom, authority, inequality, individualism and average decency and respectability, which had been the Conservative Party's theme since at least 1886". Cowling further contended that the "Conservative Party under Mrs Thatcher has used a radical rhetoric to give intellectual respectability to what the Conservative Party has always wanted".[66]

Historians Emily Robinson, Camilla Schofield, Florence Sutcliffe-Braithwaite and Natalie Thomlinson have argued that by the 1970s Britons were keen about defining and claiming their individual rights, identities and perspectives. They demanded greater personal autonomy and self-determination and less outside control. They angrily complained that the establishment was withholding it. They argue this shift in concerns helped cause Thatcherism and was incorporated into Thatcherism's appeal.[67]

Trends in UK income inequality, 1979–2006

Critics of Thatcherism claim that its successes were obtained only at the expense of great social costs to the British population. There were nearly 3.3 million unemployed in Britain in 1984, compared to 1.5 million when she first came to power in 1979, though that figure had reverted to some 1.6 million by the end of 1990.

While credited with reviving Britain's economy, Thatcher also was blamed for spurring a doubling in the relative poverty rate. Britain's childhood-poverty rate in 1997 was the highest in Europe.[68] When she resigned in 1990, 28% of the children in Great Britain were considered to be below the poverty line, a number that kept rising to reach a peak of nearly 30% during the government of Thatcher's successor, John Major.[68] During her government, Britain's Gini coefficient reflected this growing difference, going from 0.25 in 1979 to 0.34 in 1990, at about which value it remained for the next 20 years, under both Conservative and Labour governments.[69]

The extent to which one can say Thatcherism has a continuing influence on British political and economic life is unclear. In reference to modern British political culture, it could be said that a "post-Thatcherite consensus" exists, especially in regard to economic policy. In the 1980s, the now defunct Social Democratic Party adhered to a "tough and tender" approach in which Thatcherite reforms were coupled with extra welfare provision. Neil Kinnock, leader of the Labour Party from 1983 to 1992, initiated Labour's rightward shift across the political spectrum by largely concurring with the economic policies of the Thatcher governments. The New Labour governments of Tony Blair and Gordon Brown were described as "neo-Thatcherite" by some on the left, since many of their economic policies mimicked those of Thatcher.[70]

In 1999, twenty years after Thatcher had come to power, the Conservative Party held a dinner in London Hilton to honour the anniversary. During the dinner several speeches were given. To Thatcher's astonishment, the Conservatives had decided that it was time to shelve the economic policies of the 1980s. The Conservative Party leader at the time William Hague said that the party had learnt its lesson from the 1980s and called it a "great mistake to think that all Conservatives have to offer is solutions based on free markets".[71] His deputy at the time Peter Lilley elaborated and said, "belief in the free market has only ever been part of Conservatism".[71]

In 2002, Peter Mandelson, who had served in Blair's Cabinet, famously declared that "we are all Thatcherites now".[72]

Most of the major British political parties today accept the trade union legislation, privatisations and general free market approach to government that Thatcher's governments installed. Before 2010, no major political party in the United Kingdom had committed to reversing the Thatcher government's reforms of the economy, although in the aftermath of the Great Recession from 2007 to 2012, the then Labour Party leader Ed Miliband had indicated he would support stricter financial regulation[73] and industry-focused policy[74] in a move to a more mixed economy. Although Miliband was said by the Financial Times to have "turned his back on many of New Labour's tenets, seeking to prove that an openly socialist party could win the backing of the British electorate for the first time since the 1970s",[75] in 2011 Miliband had declared his support for Thatcher's reductions in income tax on top earners, her legislation to change the rules on the closed shop and strikes before ballots, as well as her introduction of Right to Buy, saying Labour had been wrong to oppose these reforms at the time.[76]

Moreover, the UK's comparative macroeconomic performance has improved since the implementation of Thatcherite economic policies. Since Thatcher resigned as British Prime Minister in 1990, British economic growth was on average higher than the other large European economies (i.e. Germany, France and Italy). Tony Blair wrote in his 2010 autobiography A Journey that "Britain needed the industrial and economic reforms of the Thatcher period". He described Thatcher's efforts as "ideological, sometimes unnecessarily so" while also stating that "much of what she wanted to do in the 1980s was inevitable, a consequence not of ideology but of social and economic change".[77]

On the occasion of the 25th anniversary of Thatcher's 1979 election victory, the BBC conducted a survey of opinions which opened with the following comments:[78]

To her supporters, she was a revolutionary figure who transformed Britain's stagnant economy, tamed the unions and re-established the country as a world power. Together with US presidents Reagan and Bush, she helped bring about the end of the Cold War. But her 11-year premiership was also marked by social unrest, industrial strife and high unemployment. Her critics claim British society is still feeling the effect of her divisive economic policies and the culture of greed and selfishness they allegedly promoted.

From the viewpoint of late 2019, the state of British politics showed that Thatcherism had suffered a "sad fate," according to The Economist Bagehot column.[79] As a political-economic philosophy Thatcherism was originally built upon four components: commitment to free enterprise;[80] British nationalism;[81] a plan to strengthen the state by improving efficiency; and a belief in traditional Victorian values especially hard work and civic responsibility.[82] The tone of Thatcherism was establishment bashing, with intellectuals a prime target, and that tone remains sharp today.[83] Bagehot argues that some Thatcherisms have become mainstream, such as a more efficient operation of the government. Others have been sharply reduced, such as insisting that deregulation is always the answer to everything. The dream of restoring traditional values by creating a property-owning democracy has failed in Britain – ownership in the stock market has plunged, as has the proportion of young people who are homebuyers. Her program of privatisation became suspect when it appeared to favour investors rather than customers.[84]

Recent developments in Britain reveal a deep conflict between Thatcherite free enterprise and Thatcherite nationalism. She wanted to reverse Britain's decline by fostering entrepreneurship – but immigrants have often played an important role as entrepreneurial leaders in Britain. Bagehot says Britain is "more successful at hosting world-class players than producing them." In the course of the Brexit process, nationalists have denounced European controls over Britain's future, while business leaders often instead prioritise maintenance of their leadership of the European market. Thatcher herself showed a marked degree of Euroscepticism, as when she warned against a "European superstate."[85][86]

• The dictionary definition of Thatcherism at Wiktionary
• What is Thatcherism? (BBC News Online)
• What is Thatcherism? (Britpolitics.co.uk)