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Margaret Thatcher’s sour legacy

Margaret Thatcher will be best remembered for having said that “There’s no such thing as society”. This was taken out of context. Her exact words, I am told were “There’s no such thing as society. There are individual men and women and there are families. And no government can do anything except through people and people must look after themselves first. It’s our duty to look after ourselves, and then, also, to look after our neighbours.”

“No such thing as society” seems to have its origins in US libertarianism, perhaps in the writings of that writer much admired by libertarians, Ayn Rand. The statement, together with the changes that came with 1960s “freedom”, gave assent to the change in social attitudes that have brought Britain to its present condition. It is precisely the kind of view that one would expect to be expressed by a grocer’s daughter from Grantham, a small market-town in the East Midlands. In the context of the permissive society of the later 1960s, the result was that Britain ended up with the permissiveness without the society. This is apparent¬† the instant you step into Britain today. There is a such a thing as society and consequently a public realm. In Britain, this public realm is not valued as it is in other countries, and it is noticeable, down to the minutest triviae.

The statement is also a denial of fact that governments have duties.

There is the individual and there is the family on one side, and there is government on the other, and yes, government is made up of, but is more than the sum of, individuals. Individuals, families and government all have their particular duties. Amongst the duties of government are:

  • to defend the realm,
  • to apply justice,
  • to deal with emergencies,
  • to ensure that everyone has the means to provide themselves and their families with a livelihood, and
  • to collect the rent of land

Anyone who had taken this bigger view would not have become a leader of any political party, so it is unrealistic to expect better. Thus the country goes round in circles. If the rent of land is not collected, undesirable consequences follow. Families end up being unable to provide themselves with a livelihood. Then they look for socialism. More and more become dependent on welfare, which eventually consumes ever-increasing public funds, which brings us to 2013.

The rise of home ownerism
From our point of view, one of the difficulties of promoting land value taxation is the rise of home ownerism. Home ownership went up during the Thatcher years. Council housing was sold off at a discount to the occupiers, which was not in itself a bad thing as the management of the municipal property empires left much to be desired. Home ownership by mortage is, however, an illusion, because, for the duration of the loan, the owners are really tenants of the banks. It created an environment in which house prices became a favourite topic of dinner-table conversation and the rise of the home-ownerist attitudes which current politics panders to: the house price bubble must now be kept inflated at almost any cost.

The later Thatcher years saw the second of the post-war house price bubbles and busts (in reality land price bust) in 1992, followed by four years of serious depression. Then came recovery, following devaluation of the currency, followed by a re-run under a Labour government, ending in the third bubble/bust of 2008. Homes became unaffordable, first, because the price of land spiralled up, and then, because so many people were not in employment that was sufficiently stable for them to be able to obtain a mortgage, which has helped to give impetus to the buy-to-let movement. Thatcher’s model home ownership was not, is not, sustatinable.

Oil revenues squandered
Britain was lucky during the Thatcher years as it had North Sea oil revenues as a cushion. But these were largely squandered in, for instance, paying for the costs of the mass unemployment caused by Britain’s de-industrialisation in the former mining and manufacturing areas, which have never recovered. The mines were abandoned and could not be reopened economically, leaving the country with a chronic energy problem, despite the fact that most of Britain is sitting on a layer of coal sufficient to last 300 years. The contrast here is with Norway, which used its oil revenues to build good infrastructure and for other investment, and enjoys the benefits of one of the world’s strongest currencies.

When Britain’s economy eventually picked up, during the later stages of her term in office, it was an economy based on moving piles of money around and expecting the piles to grow in size at each move. In reality this was an economy of rent-seeking and speculation, which ended, as all such illusions do, in collapse.

The Falklands interlude
Had it not been for the Falklands war and its successful outcome, Margaret Thatcher’s career would probably have been cut short when her government faced the polls for the first time. This was a curious interlude in modern British history and stirred up a mood in the country reminiscent of the period before World War One. What seems to have happened is that the Argentinians invaded the islands under the impression that the British would not, or could not, defend them. At that time they were a near-moribund colony, most of whose residents were tenants of the Coalite company, better known for its coal nuggets made out of coal dust, and which owned most of the island. There had been some discussion about the future of the islands with a report by Lord Shackleton having been produced in the late 1970s. Probably the best solution would have been to hand the islands over to the Argentinians, with compensation for the residents, but it never happened. Once the islands had been invaded, negotiations were off the agenda. Re-capturing the territories from a distance of 9000 miles was an almost impossible operation, yet it succeeded, thanks to excellent planning and performance in the field. It was probably this victory that kept Margaret Thatcher’s political career going for another eight years.

Poll tax – the end
Margaret Thatcher came to power at a time when the post-war socialist consensus had largely run its course, leaving a residue of bureaucracy and trade unionism that was dangerously challenging the legitimacy and power of government. The potential makers of a worse catastrophe were waiting in the wings – the Labour Party of Michael Foot allied with the trade unionists run from the far Left. Change was essential and she was, to that extent, the right person at the right time. The miners’ strike proved to be the decisive battlefield, with the workers led catastrophically to defeat by Arthur Scargill. Someone with a broader vision than Thatcher’s might have set Britain on a better path, but such a person could never have got anywhere near the reins of power. There was much about which events proved her correct. Her limitations led her to promote the politically fatal poll tax, with which, together with the miners’ strike, she will forever be associated. It finished off her political career. She leaves a sour legacy, not least of which is the notion that everything must look good on the bottom line and that is all that counts.