Margaret Thatcher is dead, but her toxic legacies live on

On Monday 8th April 2013 it was announced that the former Prime Minister Margaret Thatcher was dead. The sense of jubilation at her death was truly remarkable and obviously distressing to the many millions of right-wing people that describe her legacy in glowing terms, even going as far as making claims that she was "the best Prime Minister ever", despite her massive unpopularity and her appalling legacy of failure.

The fact that so many people took to open celebration of her death is evidence of her destructive legacy. The woman clung to power by dividing society and setting the factions against each other, instead of allowing them to unite against her. Even after her death British society is still clearly divided, and the same divisive scapegoating tactics are being used again by the incumbent Tory led government.

Margaret Thatcher and her friend, the murderous
Chilean dictator Augusto Pinochet.

Thatcher became Prime Minister in 1979, the first ever adherent of neoliberal pseudo-economics to gain power at the ballot box, rather than through violent US backed military coups. She remained a lifetime friend of her fellow neoliberal adherent, the murderous Chilean dictator General Pinochet, even going as far as direct intervention to assist Pinochet in evading justice after he was threatened with extradition to Spain to face trial for crimes against humanity.

Thatcher's rise to power signaled the end of the post-war consensus mixed economy and the beginning of the neoliberal age. The old agreement between the parties that Britain should strive to balance regulated capitalism with state control over vital infrastructure was torn up in favour of Thatcher's barmy post-industrial dream of a hyper-capitalist nation built around the financial services industry in London.

One of the core tenets of Thatcher's neoliberal agenda was the fire sale of state assets based on the absurdly fallacious reasoning that capitalists can always run things more efficiently than the state. Huge swathes of taxpayer funded industry and infrastructure were given away at bargain basement prices. In some cases such as the sale of British Telecom, the exponential improvements in technology give the impression that privatisation was a success, however the privatisation of utilities like gas, electric and water have severely damaged the UK economy by eroding the disposable income of the public with ever inflating prices, meaning that the public have less money to save or to invest in genuinely productive activity. 

Even after Thatcher's demise, this mania for privatisation continued with all kinds of economically illiterate privatisation scams from John Major's botched privatisation of the railways to Gordon Brown's massive expansion of PFI economic alchemy schemes. Some of the most barmy privatisations include the sale and leaseback of the HMRC property portfolio to a tax haven based company (seriously) and the privatisation of the UK independent nuclear deterrent into the hands of a consortium 66% owned by US based companies!

Another way in which the Thatcher government fueled the City of London post-industrial fantasy was through the abandonment of capital controls and the deregulation of the financial sector, which opened the floodgates to an unprecedented tax-dodging bonanza. In return for these changes, financial sector interests and major tax-dodgers poured cash into Tory party coffers allowing them to present their loopy free-market ideology as some kind of slick modernisation programme through expensive ad agencies such as Saachi and Saachi.

The Thatcher government introduced the new brand of politics where style took precedence over substance and the real political agenda remained hidden behind impenetrable layers of presentation. Subsequent leaders such as Tony Blair and David Cameron have pushed this kind of spin even further, seeming at perfect ease as they outright lie to the public (Iraqi WMDs, David Cameron's debt reduction lies, "No more top-down reorganisations of the NHS", etc).

Margaret Thatcher and Rupert Murdoch shared a marriage of convenience.
She allowed him to build up a vast anti-competitive press empire, and he
used that empire to back her policies.

Slick advertising wasn't the only way in which the Thatcher government managed public perception. Thatcher allowed right-wing interests to build up vast media empires. The most famous example being her intervention to ensure that Rupert Murdoch could buy up the Times newspaper. This marriage of convenience between the UK establishment and Rupert Murdoch has continued to the present day. Murdoch commands a huge audience and continues to be sucked up to by British political leaders despite the shocking revelations about the disgusting criminality and corruption at his newspapers.

Aside from handing over valuable state assets for derisory prices and recklessly deregulating the financial sector, another way in which Thatcher coddled the wealthy was through huge tax cuts justified with the ludicrous trickle down fallacy. Allowing the wealthy to extract ever more wealth from society was never going to enrich the poor as the Thatcherites loved to claim, especially given the the way that the Thatcher regime facilitated offshore tax-dodging. 

Instead of investing the glut of North Sea oil wealth and the cash raised through privatisations into a sovereign wealth fund like Norway, or reinvesting it in British industry, Thatcher wasted it all on ludicrous tax breaks for the super wealthy and obvious pre-election bribes for the masses.

Another area in which Thatcher wreaked her havoc was in housing policy. Her loathing of anything social led to her direct attacks upon social housing. Her government arranged the fire sale of social housing with the stipulation that the money raised could not be reinvested in building more social housing or renovating existing social housing stock. The construction of social housing was all but abandoned in the 1980s and has never resumed. Othodox neoliberal theory tells us that a reduction in state intervention in the housing market should lead to a rise in private sector housebuilding, however, just like with most neoliberal theory, the reality has been completely different and this rise in private sector housebuilding never happened. In fact, private sector housebuilding has declined ever since the 1980s. The housing shortage created by Thatcher's assault on social housing led to unsustainable property price inflation, with investors preferring to get fat as ever rising demand pushed their property prices and profit margins upwards, rather than investing in anything economically productive like the actual construction of new houses.

Thatcher also oversaw the deregulation of the private rental sector and the abolition of security of tenure for private tenants. Countless greedy Thatcherites have sat back and raked in the cash as they allowed other people to pay off their buy-to-let mortgages. This idle rentier class is now a clearly defined Tory demographic. In a way, it is a return to the old days of idle landlords soaking up the wealth of entire communities by renting shit houses to transitory "peasants". One of the very worst aspects of Thatcher's housing reforms is that one third of all of the social housing that was sold off on the cheap has now found it's way into the hands of the idle buy-to-let brigade. In fact, probably the largest former council house property portfolio in the entire country belongs to the son of the minister charged with selling off all those state owned properties in the first place!

In order to build the foundations of this ideologically driven neoliberalisation experiment, Thatcher needed to hobble all opposition and consolidate as much power as possible in her own hands. She castrated local government, closed down the Greater London Council and oversaw a centralisation of the education system (based on privately operated exam boards competing to make their exams ever easier to pass) that has churned out generation after generation of inadequately prepared and politically naive students.

Thatcher spent eleven consecutive new years eve celebrations with
Jimmy Savile. The idea that he would have been allowed such a close
relationship with the Prime Minister without being thoroughly vetted by
the security services is frankly laughable.

Undoubtedly the most famous way in which she consolidated her own power was through her war on the trade unions. She famously derided the miners who had been the productive backbone of the nation for centuries as "the enemy within" then removed their union powers and crushed their industries, ruining countless communities throughout the industrial heartlands of the UK. The fact that these communities built around their mines, shipyards, and steel factories were predominantly Labour voting areas was absolutely no coincidence. Not only did she castrate their unions and steal their jobs, she had no plan at all for the regions she was destroying, other than to leave them in a permanent state of destitution and social degeneration. It took the outright defiance of Michael Heseltine to save cities like Liverpool from suffering even more from the brutal indifference of Thatcherism.

Such a centralisation of power runs entirely contrary to the libertarian and minarchist principles that supposedly underpin neoliberal theory, but the only way that such a barmy neoliberalisation process could ever have been enforced was through the ruthless revocation of power from anyone that stood in her way. The fact is that all of Thatcher's successors have all enjoyed the dictatorial powers she carved out for herself, with very few central government powers being redistributed back to local government.

Another defining characteristic of the Thatcher regime was brazen economic mismanagement. The massive inflation peaks in the early and late 1980s; the deliberate neglect of British manufacturing; the ever widening trade deficits; and the fact that her government ran constant budget deficits in all but two of the years for which she was Prime Minister (in fact the 1988 and 1989 budget surpluses are the only Tory budget surpluses recorded since 1973, so perhaps, with an 18% budget surplus rate as compared to 0% for all of her Tory party successors, she wasn't actually that bad by the usual Tory standards).

Still, it didn't seem to matter that interest rates on people's mortgages went through the roof; that the long forgotten phenomena of mass unemployment was stalking the land again after a 50 year hiatus; that British industry was collapsing into terminal decline: The right-wing press and the Tory propaganda machine spun an unrelentingly positive story of "modernisation" and the public lapped it up and carried on voting for her.

Returning to Thatcher's war with the trade unions. The ongoing decline in British manufacturing can be traced back to this divisive class war against the working people of Britain. Thatcher's ideological hatred of the trade unions was so rabid that she would rather the entire industry be destroyed than allow adequate trade union representation for the workforce. A good contrast can be made with Germany, where instead of playing class warfare, with the government and business interests on one side and the workers and trade unions on the other as Thatcher did, they built their industrial strategy on co-operation between the bosses and the unions, even allowing union representatives onto the boards of directors as a matter of course. Thatcher's divide and rule strategy has resulted in decades of industrial decline, social fragmentation and vast trade deficits, whilst Germany have cemented their place as world leader in the production of high tech machinery, successfully reunified their divided nation and run enormous trade surpluses.

Any commentary on Thatcher would be incomplete without mention of the Falklands. It is quite clear from declassified documents that the conflict was deliberately provoked through the withdrawal of the South Atlantic naval defence. Thatcher was warned several times by military experts that such a withdrawal would be seen as an open invitation for the Argentine military dictatorship to invade. In the buildup to the invasion, Thatcher was languishing in the polls, the most unpopular Prime Minister in history. After the Falklands victory she rode the tide of jingoism to a landslide election victory and a whitewash investigation concluded that the war had been "unavoidable".

Another incident that must not be forgotten is the Hillsborough disaster where 96 Liverpool FC fans were crushed to death due to police incompetence. It took 23 years for the evidence to be released. Evidence which demonstrates beyond any doubt that the Thatcher government and South Yorkshire police colluded in a massive cover-up campaign, where blame was deliberately transferred to innocent Liverpool supporters with the willing assistance of the right-wing press. Especially the S*n, (belonging to Thatcher's chum Rupert Murdoch) which is still boycotted in the city of Liverpool to this day as a result of the outright lies that were printed about the behavior of Liverpool fans on that tragic day.

The final factor that cannot possibly be excluded is the policy that eventually brought the Thatcher regime down. By the late 1980s Thatcher must have come to believe that she was invincible. She'd crushed the unions, castrated local government, sold off the national silver on the cheap, slashed taxes for her wealthy backers and done it all with three landslide victories at the polls. Her final folly was Poll Tax; a policy so unpopular that it provoked the largest wave of civil disobedience in living memory. Only a power crazed fool with a head full of neoliberal gibberish could possibly have thought that they could get away with imposing it. She was warned by her Tory party colleagues that it wouldn't float but she persisted with it until she was driven out of office by her own MPs.

Only the blue tinted spectacles brigade would even try to pretend that Thatcher didn't leave the UK countless toxic legacies such as over-centralised power, adherence to ideological neoliberal pseudo-economics, countless failed privatisations, the massive scale of tax-dodging, industrial decline, mass unemployment, housing policy neglect, rising debt (national, corporate and private), a hopelessly mismanaged education system, political subservience to the Murdoch propaganda empire and the reckless gambling of the deregulated financial sector that eventually led to the global financial sector meltdown. 

Probably the single thing that stands out above all of these toxic legacies is the way that Thatcher ruthlessly reversed the gains of the post war society, cynically setting sectors of society at each others throats whilst deliberately re-extending the wealth gap.

Another of Thatcher's toxic legacies was Tony Blair. Many Tories try to deny the link between Thatcher and Blair, however the similarity is absolutely obvious to most people. Tony Blair was quite clearly a Tory in a red tie. Instead of undoing the damage that Thatcher had wrought, he intensified it with more privatisations, more dodgy outsourcing contracts, more Murdoch love-ins, more bank deregulations, more tax-dodging scams and more deliberate neglect of British industry. Even the most rabid Tory would hesitate to contradict Thatcher herself ,and when asked what her greatest achievement in politics was, her reply was "Tony Blair and New Labour". The affection between the two was mutual, with Blair providing a grotesquely uncritical eulogy to the sworn enemy of anyone remotely left-wing or socially liberal:

"Margaret Thatcher was a towering political figure. Very few leaders get to change not only the political landscape of their country but of the world. Margaret was such a leader. Her global impact was vast. And some of the changes she made in Britain were, in certain respects at least, retained by the 1997 Labour Government... As a person she was kind and generous spirited and was always immensely supportive to me as Prime Minister ...  you could not disrespect her character or her contribution to Britain's national life. She will be sadly missed."

Tony Blair was obviously saddened to hear of the death of his ideological mentor. I thought that I'd actually be much happier on the day that Thatcher finally died. However, it is absolutely clear from the shape of the UK political landscape that she is actually still alive. All three of the establishment parties are now wedded to her brand of ideologically driven orthodox neoliberalism; the scars of her economic blundering can be seen carved across the landscape and across countless communities; the gap between rich and poor is wider than ever and still growing; the post war welfare system is under ruthless attack; crony capitalism and industrial scale tax-dodging are rife and the tactic of playing elements of society off against each other in order to distract attention away from the villainy of the establishment powers is even more prevalent today than it was at the height of Thatcherism.

It doesn't matter that the woman is so reviled that her grave would need to be kept behind a security cordon to prevent it from becoming an extremely popular open air toilet. It doesn't matter that she is dead and that people are satisfied that she is gone. Her toxic legacy has not gone, in fact, the current Tory government are busy with schemes that Thatcher herself would never have dared dream of, such as privatising the NHS and simply giving away thousands of schools in England (£billions worth of taxpayer funded property and all) for free, to unaccountable private sector interests (including several major Tory party donors).

It is 34 years since Thatcher introduced neoliberal pseudo-economics to the UK and we're still paying the price now. Hell, we'll still be paying the price in another 34 years given that the entire political establishment is utterly riddled with this rotten ideology. The economic and social destruction she inflicted can never be fully repaired. Too many industries destroyed, too many taxes dodged, too many communities divided, too many lives ruined and too many generations brought up on the right-wing mantra of "greed good; social conscience bad".

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Michael Heseltine: The "national will", house prices and unemployment

In March 2013 the one time minister in Margaret Thatcher's government, turned Tory party "grandee" Michael Heseltine gave a remarkable interview with the Independent newspaper in which he tried to pin the blame for Britain's economic woes upon the country being too "well off".

I should start with a very brief biography for those of you that are a little younger than me that don't really know who Michael Heseltine is. He was a leading member of Margaret Thatcher's government but fell out with her in 1986. He challenged Margaret Thatcher for leadership of the Tory party after Geoffrey Howe's resignation in 1990 in the wake of the Poll Tax fiasco. He polled well enough in the first ballot to deny Thatcher an outright win, but he was defeated by John Major in the second ballot. He then joined John Major's cabinet serving in several roles including deputy leader of the Tory party. He is remembered with great enmity by many Tories for having played such a crucial role in the removal of Margaret Thatcher. In 2001 he retired from the commons and was immediately given a peerage in the House of Lords. It wasn't until almost 10 years later, having been appointed as an adviser to the Treasury, that he bothered to give his maiden speech in the Lords, to deliver his report on the UK economy and industrial performance.

Heseltine's interview, although utterly misguided, gives us a glimpse into the workings of the Tory mind. The main thrust of his argument was that Britain may have become lazy and complacent because people just have everything too easy, creating a national complacency which prevents us from competing with developing economies like India and China. Here's what he said:

"It's a question of whether the national will is there; whether we want it. And the richer you get the less imperative there is ... Maybe one of the problems of advanced economies is that people are sufficiently well off that they don't need to drive themselves any more."

He seems to be implying that once a nation gets to a certain level of wealth the population become lazy and unmotivated. There are several flaws in this kind of view. I'll outline just a few of them.

The first and most obvious criticism is that the view that "the richer a person gets, the less imperative there is for them to drive themselves" contrasts terribly with Tory philosophy and policies. If there is any truth to Heseltine's claims, then the Tory policy of handing an average £100,000 a year tax cut to Britain's 13,000 income millionaires (due on April 6th) would actually reduce their imperative to drive themselves wouldn't it?

One can assume that Heseltine was not trying to say that the wealthy establishment have it too easy, but instead that he's implying that the general population have it too easy. That decent welfare provisions and high wages for "the plebs" is the problem. That productivity could be improved by squeezing ordinary working people harder and rescinding more of their welfare provisions. 

This interpretation fits with the Tory austerity experiment and the fact that wages have declined in real terms every single month since the coalition came to power. If we interpret Heseltine's view this way (that "the bloody plebs have it to easy"), at least his comments actually fit with the Tory ideology of attacking labour rights and destroying welfare provisions, whilst increasing the wealth of the wealthiest. But this still leaves us with the problem of how greater wealth for ordinary people makes them lazy and complacent, yet greater wealth for the already wealthy is a fundamental element of the Tory ideology.

I believe that Heseltine's comments are actually a carefully disguised reworking of the idea that Britain must parse wages, labour rights and welfare provisions for ordinary people down towards Chinese and Indian levels in order to remain "competitive".

Of course the low labour costs and abysmal labour rights of ordinary Chinese and Indian workers play a huge part in their high relative productivity. However, it is adherence to right-wing neoliberal economic ideology that makes this production cost disparity such a threat to the Western economies. Were the UK to introduce capital controls in order to prevent the UK economy being flooded with cheap Chinese imports for example, UK industry and manufacturing would benefit enormously and the incentive for companies to outsource production to Asia would be significantly reduced.

One of the main drivers of the Chinese boom has been inward investment in infrastructure. In little over a decade, they have built a motorway network larger than the US interstate network, they've constructed hundreds of millions of houses, massively advanced their scientific capabilities and their space programme and set about building a bullet train network. In contrast, one of the first things George Osborne did when he got into power was to brutally slash UK capital investment. While China spends ever greater amounts on infrastructure, housing, education and science, the UK government have been cutting spending on all of them. British infrastructure has suffered from decades of neglect, yet instead of investing in infrastructure improvements, the Tory led government, like their Labour predecessors, are more interested in corporatisation of the state via ludicrous corporate outsourcing deals, PFI economic alchemy scams and state subsidised privatisations.

The reason the UK is in comparative decline is that the economy has suffered from 34 years of neoliberal pseudo-economics and an abject lack of coherent economic planning. I'm not the only one making this point, recently more than 60 economics professors wrote a letter condemning George Osborne's mismanagement of the economy.

Another problem with Heseltine's view that the UK is being left behind because the plebs are too comfortable is the fact that as a proportion of GDP, the wages and wealth of British workers has plummeted. British workers are worse off now, in terms of disposable income, than they have been for decades. The only way we're better off is through the exponential improvements in technology, in almost every other aspect of our lives we are significantly worse off than we were 40 years ago: Wages are lower in real terms; we have less job security; Quantitative Easing has eroded our pensions and savings; rents are higher in real terms; childcare is more expensive; utility bills, fuel prices and public transport costs have soared above the rate of wage increases for decades; and the public are more indebted than ever before. If wealth makes us less productive, then this great reduction in disposable income should have made us more productive, yet it absolutely hasn't. 

It seems Heseltine has got it completely backwards. The greater the levels of disposable income available to ordinary people, the more productive we become, since disposable income creates economic demand and provides people with the capital necessary to start small businesses (which are powerful drivers of economic growth).

One more problem with Heseltine's view is that there are many countries which have significantly higher wages and better welfare provisions than the UK, which have weathered the economic crisis much better than we have. The Scandinavian countries are the obvious examples, but other countries like Australia and Canada have significantly higher median wages, and although they are hardly booming in the wake of the global financial sector meltdown, they are not languishing in desperate economic stagnation like the UK. Surely if Heseltine's view that coddling ordinary people with decent wages makes them lose their imperative to drive themselves, then these higher wage economies would be struggling even more than ours?

Heseltine's comments about Britain's lack of "national will" were bad enough but he also made a number of other ridiculous comments that are worthy of deconstruction.


One of his comments echoed the Tory narrative that GDP figures are not very good economic indicators. I actually agree with him on that, there are much better economic indicators (the balance of trade, average disposable income, average personal indebtedness), however the things he proposed as alternatives are frankly ludicrous.

His first suggestion of "rising employment" wouldn't be so bad but for the fact that everyone knows that the headline unemployment statistics have been rigged and distorted so much by successive administrations that they are virtually meaningless. To give just one example, the ONS actually exclude the 10,000s of people on mandatory unpaid "workfare" schemes from the official unemployment statistics, despite the fact that they are earning no wages and still in receipt of unemployment benefits! If these people were included in the unemployment statistics, then the headline unemployment figures would be significantly worse. It is also important to note that long-term unemployment and youth unemployment are both continuing to soar out of control.

Heseltine's second suggestion demonstrates a staggering level of economic illiteracy. He stated that house prices should be used as indicators that the economy is recovering. If we use house prices (rather than GDP, balance of trade, disposable income, indebtedness, industrial productivity...) as one of our key economic indicators then the absurd situation is created that a massive house demolition programme would supposedly demonstrate economic recovery (due to restricted supply driving hose prices higher) whilst the construction of much needed social/affordable housing would demonstrate economic decline, as house prices fall back to more sustainable levels.

It is an absolutely clear demonstration that the right-wing have learned absolutely nothing from the global economic crisis if they think that the health of an economy can be measured in the level of house price inflation! Perhaps they are so enamoured with the Great Neoliberal Lie they keep peddling (that the crisis wasn't caused by reckless under-regulated bankers, sub-prime lending, the construction of dodgy mortgage backed derivatives, Credit Default Swaps..., but actually by supposed "excessive state spending) that they seriously believe that house price inflation could be a positive economic indicator.

I struggle to believe that they are so stupid as to believe their own "Labour caused the crisis" propaganda so there must be an alternative explanation. It seems no coincidence at all that Heseltine suddenly wants the economy to be judged on rising house prices, just days after George Osborne announced a massive (Help to Buy) subsidisation of the private housing sector which will undoubtedly cause a re-inflation of the house price bubble. 

It seems that Heseltine is simply cherry picking two supposed economic indicators that are certain to be massively influenced by Tory policy. The headline unemployment figures may well continue to fall as ever more unemployed people are coerced onto "workfare" schemes and misleadingly struck from the unemployment figures, whilst house prices are certain to rise once Osborne begins pumping £billions worth of subsidies into the market in 2014.

I believe were going to hear a lot more of this kind of thing from the Tories in the buildup to the next election. We can expect them to point to their brazenly distorted headline unemployment figures and to the scale of subsidy backed house price inflation as their key "economic indicators" because they'll be virtually the only seemingly positive economic indicators they'll be able to dig out. Sadly, millions of people are so cretinous that they'll allow themselves to believe in the government unemployment figures, just as they'll believe, against all of the evidence of the global financial sector meltdown, that house price inflation is suddenly a wonderful thing again.

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