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Thatcher failed

Article for Scotsman on Thatcher’s legacy – she succeeded politically and culturally but structurally she failed Britain completely.

Margaret Thatcher, as a living being, ceased to exist yesterday. But politically she was buried in March 2008.

Before considering her impact on British and Scottish life and politics, it is worth pausing for a minute to rule out some of the claims for her impact that do not hold water.

Firstly, the belief that Thatcher transformed British politics out of her own volition is deeply flawed. In fact, the likelihood is that had Thatcher never existed, things would have happened in much the same way.

It was Richard Nixon’s advisors who dismantled the post-war economic order in 1972, replacing it with a naïve and distorted view of markets. That placed the western economies on a trajectory it was hard to avoid and generated a sequence of other factors which made some sort of Thatcher inevitable.

The Chicago School of market economics, the proliferation of corporate lobbying, the Murdoch media revolution, the social stagnation of the 1970s, the Rise of Reagan – all meant the neoliberal era was almost certainly assured, Thatcher or no Thatcher. She was that era’s child, not its mother.

Secondly, we should take great care in ascribing to Thatcher the transformations of the 1980s. Her supporters compare 1977 Britain with 1997 Britain as evidence of her powers. Yet you can do exactly the same for any north-European nation and it turns out they have mobile phones too, but without the massive social disruption Britain went through.

Thatcher’s acolytes have carefully curated her era, hoarding for her all the achievements of the 1980s while dismissing all that decade’s failures as ‘an inevitable price’. That does not stack up.

But she does have three big legacies that must be taken seriously, one cultural, one political and one structural.

Her cultural legacy is her most important. Thatcher didn’t invent neoliberalism but she carefully combined it with social conservatism and added to it a generous splash of individualistic self-interest. And of course, she was an arch-populist in the proper sense – she controlled debate by setting a majority against a minority and by corralling us all against an external enemy.

So the ‘new’ working class in the service sector who were ‘aspirational’ were torn apart from the ‘old’ working class in the manual trade unions. And we were all set against the perfidious Argies/Gerries/Frogs.

These kinds of identity politics are crude but effective if you can live with the conflict. That is what really sets Thatcher apart from her main successor Tony Blair. He wanted to be loved by all; Thatcher wanted to be hated by some.

It is how Thatcher lost Scotland. Here the polarisation that she settled on – non-unionised against unionised – worked in the other direction. And since Scots never had a cultural animosity to the Germans and the French, all that Union Jack stuff just failed.

If you imagine Thatcher’s strategy to be political, it makes no sense that Scotland’s middle classes hated her almost as much as its working classes. If you recognise that her strategy was cultural, it makes perfect sense.

Her political legacy is equally strong. Her biggest political achievement was the creation of Tony Blair. Thatcher did more than beat the Labour Party, over 12 years she began to defeat the idea that a real labour movement was even possible.

Through an almost seamless political merger between the private sector, the media, the state and large chunks of the working class, the political left fell to believing it had no space in which to fight.

The whole basis of New Labour was that the labour movement had already lost – and in Tony Blair that became a self-fulfilling prophecy. He took Thatcher’s policies to places she never could, such as finally breaking open the NHS to private competition.

But her biggest legacy is structural. And while her cultural and political legacies are stories of great success (on her terms at least), her structural legacies are a disaster. She redefined policy in Britain. And it sunk us.

She made people believe they could have good public services on low rates of tax by converting capital to revenue through privatisation and by drinking deeply from the North Sea oil boom. But she didn’t cut spending. She encouraged cheap imported consumer goods and a crazy housing boom to make us feel richer while actively campaigning to kill off what she called the ‘smoke stack industries’.

She instigated a consumer economy that created poor quality, insecure jobs. She made us believe that letting big business do whatever it wanted was in our interests and in 1986 instigated the ‘Big Bang’ in the City of London. The devastating shockwave of that bang arrived 22 years later. She convinced us that only markets could deliver social and economic innovation.

Thatcher is the mother of structural fiscal deficit – had she been honest and matched tax cuts with spending cuts she’d have lost. So she cheated, and we’re left dealing with it. Thatcher killed manufacturing on the basis that it was ‘the past’. So now we have an unbalanced, unproductive economy and we can only dream of a German economy, riding high on the back of those productive ‘smoke stack’ industries she so derided.

Deregulation and deindustrialisation created a banking sector disinterested in long-term investment when mad-cap speculation looked more profitable – the failure of the British SME sector is hers. In-work poverty is a Thatcherite invention, as is the dominance of mind-numbing low-quality service-sector jobs. And as for ‘innovation’? That turned out to be a euphemism for fraud and profiteering.

Most of the things we complain about – privatised energy companies ripping us off, expensive privatised trains running late, corruption among the super-rich, poor-quality jobs with low pay and so on – are complaints you don’t hear in Germany or the Nordic or Benelux Countries. The difference between there and here is Maggie.

Margaret Thatcher is almost unique among politicians; she got everything she hoped for and more. Her enduring curse is that it failed so completely.

Robin McAlpine