A Baroness dies, but the fiction of Thatcherism lives on

So, in the end, she pretty much outlasted them all.

Had she gone a decade ago, the pubs would have been groaning with celebratory Maggie wakes by lunchtime. The punters would have celebrated the fact that we were under a Labour government (ignoring the Iraq war and the essential continuation of many of her policies), the alternative comedians would have been cracking wise, the Socialist Workers Party would have been selling papers outside, and the anarchists would have, under cover of night, started trashing things. The Tories, out of power and marooned between the ghostly Iain Duncan Smith and the ghastly Michael Howard, would have blustered and mewled, and felt more conspicuous for their shortcomings. Tony Blair would have given one of those speeches he could still summon up, honouring the proper obsequies, while preserving just enough dissent to succour his furious party. We would have felt it, in the air and in the street.

But she lived too long, out the other end of politics. The Britain that mourns Baroness Thatcher is neither the hot, contested place of the 1970s, ’80s and ’90s, nor the smooth, self-congratulatory cool Britannia which had folded in the changes she made, and moved beyond it; the place that had beaten the business cycle. Instead, there’s the triple-dip recession, which is really a continuing malaise, presided over by an undistinguished and unassertive Coalition government, with no big idea or monumental cause.

There is nothing on the horizon, no shazam moment, either from the Left or the Right. The sense is that everything will muddle on, with sections of what remains of the social state — the NHS, social housing — being slowly disassembled. But if the Right has died as a movement, so too has much of the Left’s identity as a genuinely oppositional force. UK Uncut has risen and fallen, the large protests that rocked the country have died down, Occupy has been and gone, and the Socialist Workers Party, the backbone of much of these protests, is close to collapse mired in internal scandal.

The People’s Assembly, a movement of sorts, has announced itself, but it remains a movement of “no”, without a positive answer to the dilemmas of modernity. Thatcher was the last prime minister of the Cold War, and the last who fed the idea that politics could be a striking transformation of everyday life. The overwhelming feel in the tributes which have been unscrolling all frikkin day — everywhere — has been that of a near-painful nostalgia, for something, anything which would act as a politics of meaning. It is simultaneously fascinating, enervating and weirdly tedious. I recall January ’89, when Ronald Reagan departed the White House. There were parties, demonstrations, and SBS — when it was run, as far as one could tell, by a Nicaraguan lesbian housing collective — ran a whole show called “Rockin Ronnie”, farewelling him with a sort of explosive collage.

Today, there’s not much of that that I can find. I went down to Trafalgar Square, because LibCom, the Libertarian Communist group had said — in 2004! — that there would be a party there on the day of her death. There wasn’t, but apparently one has been called for Saturday. Walking back, to watch yet more television, I passed the Groucho Club and heard a cheer coming through the window. That was about it for public celebration. Back home, on TV, the presenters had been on so long talking about the same thing, they were like sports presenters, getting silly, making obvious gaffes. “Lord Powell, I understand you were with her last night,” said Jon Snow on Channel Four, apparently asking an aged grandee whether they had enjoyed a final night of love. “Well I visited her last night,” he said grandly, trying to get the image out of everyone’s head. Later, Snow opined, “it must have been hard to tell where she ended and you began”.

On BBC News, former moderate Thatcher minister David Mellor said “she seemed to me like a combination of Boudicea and my mother,” which was so way too much, I mean argggghh. Back to Four, and they had assembled Alexei Sayle and Louise Mensch to argue out the legacy. Mensch, nee Bagshawe, the privileged former music industry, former coke-fiend, chick-lit novelist who quit her seat of Corby two years in, thus losing a Tory gain back to Labour, was about as much the anti-Thatcher as you could get, a cipher who happens to be a woman. Sayle was arguably worse, burbling on about Thatcher as a case of narcissistic personality disorder, and talking about “prejudice dressed as policy”. It was like watching shadows of shadows, boxing. There were hours to go yet.

“Thatcherism is being presented on the basis of a half-truth that is all lie: that the structural adjustment that every Western economy required could take only one path …”

God, arp, arggggghh, urk. What to say? Though the era that Margaret Thatcher, with Ronald Reagan, gave her name to, ended some time ago, it is only with her death that the door is slammed shut on it, and we move forward. Given the hagiographies and demonologies pouring from all media, about how she changed the world etc, it is tempting to step in the other direction, and see her as part of a process, the public face of a movement of capital in the post-WWII era. We know that Reagan, whatever his acuteness up until the 1960s, was, by the 80s, an amiable dimwitted figurehead of a cabal of conservatives pushing through a multi-faceted agenda — and was, by 1986, descending into the beginnings of senility. But of course Thatcher was not of that order.

By the time she became prime minister at 53, she was at the height of her powers. Born in the Lincolnshire town of Grantham — like many ambitious Brits, she discarded her yokel-ish provincial accent via elocution lessons — to a grocer, Alf Roberts, a Methodist preacher, alderman and mayor, a 19th-century social liberal very much to the Left of his daughter. It was the mayoralty rather than the grocery that inspired her to look beyond the narrow possibilities for a lower-middle class girl. She needed Latin to get into Oxbridge; her school did not offer it, so she learnt it after hours. She studied the practical subject of industrial chemistry, and went on, famously, to work on making Mr Whippy ice-cream smoother and more malleable; later, she would not let her children eat it. That solicitude was the exception rather than the rule — her daughter Carol’s memoirs and other bits and bobs attest to her lack of interest in being a stay-at-home mum, or even a minimally attentive one in an era when there were few other options.

She had been selected as a Conservative candidate for the safe Labour seat of Dartford in 1950, at which point she met her husband-to-be Denis, a prosperous oil executive. He supported her return to university to study law, preparation for a winnable seat. She became a member for the north London suburb of Finchley in 1959.

By then, her politics were hybrid. Like many people who became Tory in the post-war years, she had been influenced by an abridged edition of Hayek’s Road To Serfdom, which had been put out by anti-Labour groups, and circulated in the hundreds of thousands. The book persuaded Winston Churchill to campaign against Labour’s “gestapo”, a line which persuaded millions to Labour, delivering them a landslide, and ushering in a semi-socialist society, with half the economy in public hands. The Tories toed the line. Thatcher was all over the place — she spoke against the “false wants” of consumerism, but advanced fiscally conservative ideas on pensions. She voted for the decriminalisation of homos-xuality, but not for fault-free divorce, for decriminalised abortion, but for the reintroduction of birching. Appointed an education minister in 1970, she ended the universal distribution of free milk, a move designed to beat back tuberculosis in post-war Britain. The move earned her the nickname “milk-snatcher”, and the issue was symbolic of what was to come — by the 70s, free milk was no longer essential, but was taken as a sign, a quite visceral one, of the loving state.

He entry into the ministry coincided with a movement beneath the surface of right-wing British politics. In the 1940s, Hayek and others had concluded that the fix was in, and that beating back social democratic politics would take a generation. They formed the Mont Pelerin Society, to propagate classical liberal ideals slowly, and to wait for what they saw as the inevitable crises of socialism. In fact, it was capitalist crisis that gave them an opportunity. The Western recession, provoked by spending on the Vietnam War, began in the US in 1967, and rolled across the Atlantic, smacking the Wilson Labour government at the end of the 1960s. Wilson’s government was excoriated at the time as hopelessly right-wing; from this vantage point it looks dazzlingly socialist. Its leading policy — then, and when it was returned in 1974 — was stated by Tony Benn: “to create permanent irreversible change”.The idea was that the rather bureaucratic socialism of the post-war era would be complemented by “the white heat of technological change” to create an industry policy that emphasised the integration of research and development, universities, industry and trade unions in forms of co-ordinated production that bypassed market forces, while giving autonomy back to factories, cities and regions. Benn’s idea was not Left enough for some — such as the Marxist Left (many of whom can now be seen on the Right), for whom it was a fatal compromise — but was too Left for others, such as the organised trade unions, because it implied workers would have to go beyond the simple process of clawing in higher wages, without taking greater control of industry.

This would later be characterised as a crazy left-wing period. In fact, it was a cozy relationship between business and unions: the rate of profit, until the mid-70s, was still sufficiently high, to share it out with higher wages. By 1975, wages were 63% of the wages/profit split, the highest point it had reached in the history of capitalism. It was Labour’s great bad luck to regain power just as this crisis became sharpened to a point. By the mid-70s, trade union struggles had been drained of any political content by right-wing union leaders. The stagnation continued, but Labour had no political room to trim its budget.

The defeat of Ted Heath — a centrist “one-nation” Tory — as prime minister had opened the possibility that the “Hayekians” could take control of the party. Their champion was liberal intellectual MP Keith Joseph. Joseph, Thatcher and a right-wing activist named Alfred Sherman, a former Stalinist who had fought in the Spanish Civil War, had formed a right-wing think tank, the Centre for Policy Studies, to push his candidacy. But Joseph made a speech that seemed to endorse eugenics, and the storm disqualified him from consideration. She became the leading challenger to Heath, and then party leader, backed by this powerful formation within the Tories. They had an open field as Labour was bedevilled by economic decline and trade union demands that widened to all sectors, often because low-paid service workers wanted a slice of the pie. In any other circumstance such a radical notion of changing British society would not have gained support, neither in the Tory party nor in the general public — especially headed by a woman. But with the garbage piling up, and the IMF being called in to help with a yawning UK deficit, the stage was set for a decisive repudiation of the post-war settlement.

That is where Thatcher came from, and that, in the early years of her premiership, is where she gained her support. In the early years she was surrounded by more moderate Tories in the cabinet, and ideologues were quickly disappointed by a more pragmatic approach to economic management. Even so, the measures were serious — a contraction of the social democratic UK state, which sent unemployment soaring beyond 10% by the early 1980s. The shock treatment, in a first-past-the-post electoral system with five-year terms, was modelled on an actual dictatorship rather than a virtual one: Pinochet’s Chile, the laboratory of monetarism, one reason why she and her supporters maintained a fondness for the generalissimo to the end. But the British public still had a say, and by 1982 they had buyer’s remorse. With the harsh economic policies had come a harsh social policy, of law and order, and a series of police crackdowns on inner-city communities, especially black ones. That together with vanished employment set the stage for the northern and London riots of the period. By the end of these — when she had added to her odium by touring the affected areas in a car and summoning people to the window with a crooked finger — she was in dire straits.

The myth that has subsequently grown up is that the Falklands war saved her. It didn’t, but it would be ironic if it had, because it was based on a huge series of blunders, including withdrawing military support and miscommunicating with the viciously murderous Galtieri junta, with whom the Tories were firm friends. We now know from published cables that the Argentine invasion was greeted with panic in London, and dithering about how to respond. It is clear Thatcher did make the key call to launch a military operation, which girded large sections of the nation behind her. But despite all that, in the 1983 election, she could not gain the outright majority that Clement Attlee had gained in 1945.

She only won because Labour had been split by the departure of the Social Democratic Party, which went into alliance with the Liberals. Throughout her rule, she never managed to persuade more than 42% of the voters to support her. But, contrary to Labour myth, it is far from certain that Labour, had there been no split, would have been capable of toppling her, with its creaky and archaic manifesto, “the longest suicide note in history”, refusing to recognise weariness with trade union power, and wary of its commitment to unilateral nuclear disarmament.

From 1983, she had her own way. That gave her license to embark on the most ambitious challenge of her rule, taking on the trade union movement — especially the miners, who had wrecked the Heath government in 1974, and who were led by the appealingly intransigent Arthur Scargill. For years, the government had set production levels (the coal mines were still in public hands) that allowed them to create massive stockpiles. The union leadership didn’t see this coming, or if they did, didn’t react tactically. When the government announced pit closures, and the union struck, they had months of supplies to ensure there was no return of the three-day week.

Thatcher’s uncompromising capitalism was matched by Scargill’s outright Stalinism — he had refused to back the Polish Solidarity union in the 1980s, refused a general strike ballot — so when parts of the mining community departed from the strike and it collapsed, it was all over. The legal framework that had allowed for a vigorous industrial culture was replaced by limits on picketing and forced ballots, and Thatcherism proper was underway.

“Thatcherism was a second-rate, shoddy job of post-war economic transformation, the easiest possible version of it.”

Over the next five years, its forms would be laid down — one that would give a form to social conservatism, right up to the John Howard defeat of 2006. Its rollback of social democracy was vigorous, but observed limits — Thatcher privatised telecoms, and a whole series of industries owned by the state, but never really touched the NHS, the BBC, or even, until John Major, the railways. She allowed social housing tenants to buy their own flats, but she never abolished the dole or similar benefits, or time-limited them. By the time she left office, the UK was a decisively post-socialist society, but it still had a recognisable, if minimal, social-democratic framework.

Indeed, a lot of what was being done was statist: the establishment of privileged “enterprise zones” across the country, and a small but steady expansion of the public service. Within that frame, a whole series of low-productivity industries had been allowed to run down. Nothing replaced them, and the welfare bill was simply added to a deficit that ran throughout the 80s. In parallel, the “big bang” deregulated the financial markets and institutions, and pulled vast amounts of capital into London. The country suffered a huge geographical division from which it has never recovered — a north, west, Wales and Scotland drained of employment and capital, subsidised by a booming south-east. When the EU opened up migration, the latter area became a magnet for low-paid European workers, essentially slicing the country up.

For five years, this ramrodding delivered impressive growth figures. But the overall yield of the Thatcher period, 2.5% GDP growth pa, compares poorly, even to the 70s. Most of it was a bubble; it burst almost immediately, in 1988, and was the epicentre of the recession that hit Australia and the US around 1990.

By that time, Thatcher had become more rigid, not less, in her belief in the conservative-liberal mix. The cause of freedom did not extend to s-xuality, with “section 28” laws banning the “promotion” of homos-xuality. Democratic opposition, such as the mayoralty and assembly of London, had already been abolished because they stubbornly insisted on electing Labour. Nelson Mandela had been denounced as a “terrorist”, even though the ANC’s armed struggle avoided civilian bombings.

Eventually, she adopted the purest notions of Hayekian ideas — that taxes, such as council taxes, should apply equally, with no regard to property. The resulting poll tax proposal — or council charge, as it was called — prompted massive demonstrations in Scotland which quickly transferred to England, and had the country in uproar. Those it dismayed included many low-income Tory voters, who had liked the party’s aspirational message. They hadn’t read The Constitution of Liberty so they didn’t know that being taxed the same as the Duke of Devonshire was freedom. Thatcher had by now alienated both her cabinet colleagues and the public. Despite the pained howling of the right-wing commentariat, the party dumped her, and were rewarded for their move when the pallid John Major was re-elected in 1992 with much the same margin as Thatcher had taken in 1987. It was under Major that some of the really juicy and counter-productive privatisations — such as rail — occurred. They undersold public assets, generating a last quick burst of pseudo-prosperity.

So, in all the assessments of Thatcherism pinging around — including a truly bizarre ding dong on Newsnight as I write — a central and fictional account of Thatcherism has been established. That fiction is that she restored the UK to prosperity, but created division in the process. Division she certainly created; poverty went from 14% to 24%, and the Gini inequality coefficient from 0.28 to 0.4, taking it far outside all West European nations. But the necessary prosperity is more elusive. There was no growth outside of a flattened post-Keynesian norm. The country which had had trade surpluses for 33 out of 35 years since 1945 was thrown into trade deficit, and has never been in surplus again. House-building, both public and private, flatlined, so now rent takes a huge, disabling bite out of people’s income.

Manufacturing only declined moderately by sector returns — from 18% to 16% — but this hid high unemployment and deflation from productivity gains, and the failure to re-employ laid-off workers. Those workers who were re-employed found a net loss of 4,000 pounds p.a in their wage. Germany and other countries had had the same productivity turnover. But through reinvestment, greater R&D (5% of industry totals rather than 2%) and access to higher education, they retooled their economies as a value-added/knowledge/service mix. The result? Poverty rates below 10%, inequality below 0.3 Gini, and trade export surpluses. Thatcherism is being presented on the basis of a half-truth that is all lie: that the structural adjustment that every Western economy required could take only one path and “there is no alternative”. Only the closed circle of centre-Right debate in the Anglosphere, combined with the nostalgic attachment of what remains of the Left to the class politics of the 70s, prevents the case from being argued: Thatcherism was a second-rate, shoddy job of post-war economic transformation, the easiest possible version of it.

But around and round it goes on TV, the montages of bankers with big phones, and girls in eyeliner drinking champagne to the Pet Shop Boys. The imagery reinforces the idea that history could not have been otherwise. Yet every time one steps off the train in Amsterdam, Frankfurt, Stockholm one sees how it could have been — low poverty, social cohesion, without any loss of energy or dynamism. It is not the past that Thatcher should be compared to, but its parallel present.

Perhaps, had it been Keith Joseph doing so, we could have seen the comparison. But bound up in the extraordinary personage of Margaret Thatcher — her undoubted drive, dynamism, and glamour — there was no chance. She was advantaged by the way in which women in such roles can fill every available archetype. Francois Mitterrand said she had the eyes of Caligula and the mouth of Marilyn Monroe. But she was also Mother, snatching the milk — and the stern mistress with a quick birching or a war.

It was a magnificent, extraordinary performance, and one that — looking around the still-destroyed cities and neighbourhoods of Britain — we are unlikely to get over easily. The collectivism she smashed could be over-rated — especially in nostalgia — but what replaced it has been an individualism of diminishing returns. She outlasted any political movement that could have challenged the old frameworks. We will have to wait for new ways of being together before a Thatcherite vision of social life can be genuinely challenged, no matter how many bitter wakes see her out this week, before she is hauled off through the ancient streets of London, on, as tradition dictates, a gun carriage.