The Lady Wasn't For Turning (Thank God).

Tyler Cowen takes a look at Paul Krugman's book and says Krugman isn't prepared to think broadly on the question of why conservatism triumphed in the 1980s:

Conservatism rose in the 1980s in large part because the mid to late 1970s were such an economic mess and because American had lost so much relative status internationally.  Krugman won't face up to that; instead he blames the Republican manipulation of "the race card," even though at the time racial tensions arguably were lower than ever before.  Of course in a relatively close election any single factor can be called decisive but I found this discussion well below the standards of the political science literature, even the popular political science literature.

Krugman calls for single-payer health insurance, tax hikes, and raising the minimum wage.  He doesn't come off as all that radical.

His theory of government failure is that wealthy right-wingers hijack the state to redistribute wealth to themselves, and that's all we hear on what's wrong with government.  That's the part of the book I find hardest to swallow, but if you're asking "should I read this?" the answer is yes.

Tyler then asks:

Is Paul Krugman willing to come out and simply pronounce: "Margaret Thatcher turned the UK around and for the better"?  If so, how does this square with his broader narrative?  And if not, why not?

Matt Yglesias says perhaps that's because the US and UK are different countries and then says that:

even after Thatcher Britain has a health care system that's so statist virtually nobody on the American left will defend it.

Well, Thatcher never tried to dismantle the NHS. It is to British politics what Social Security and what have you is to American. The untouchable shibboleth that will destroy anyone who tries to reform it.

Now it's true, of course, that Reagan's battle with the air traffic controllers has assumed totemic importance in histories of the Reagan years. And it's equally true that the 1970s were tough times on both sides of the Atlantic.

I have no real  - or at least no political - memory of life before Thatcher but it's easy to forget how grim things were in Britain. The retreat from Empire was accompanied by a domestic malaise that seemed destined to confine Britain to basket-case status in perpetuity. The country was the basket case of Europe.

The 1970s had begun with a three-day week and ended with the Winter of Discontent. Inflation reached 25% at one point. In 1974 Prime Minister Ted Heath, buffeted by industrial action from the miners, asked "Who governs the country?" The electorate replied: "Not You, Mate". The unions destroyed one Prime Minister and would make life impossible for Heath's Labour successors. In 1976 Britain took it's begging bowl to the IMF for a vital loan, amidst fears that the entire economy faced the prospect of "liquidation". That then necessitated wage restraint (almost impossible, mind you, since wages were linked to prices and inflation was rampant) and spending cuts - leading to the infamous Winter of Discontent. Nearly 30 million work days were lost to strikes in 1979. Most infamously, the gravediggers went on strike in Liverpool. Elsewhere garbage went uncollected. The country was falling apart and the government seemed clueless. Poor old Jim Callaghan may not have quite said "Crisis? What crisis?" but people believed he had. No wonder Labour were out of power for 18 years.

It didn't end in the 1970s of course. In some respects the 80s only began in 1984-85 after another miners' strike - aimed at toppling another conservative government - was defeated in vicious and unpleasant circumstances that, yes, led to the destruction of old mining towns. The unions brought their destruction upon themselves however and if they were treated harshly by the Thatcher government, well, few could plausibly say they had not had it coming. But it's a testament to how much has changed that in the mid-1980s the annual Trades Union Congress was guaranteed as much television coverage as the party conferences and the General Secretary of the TUC was a household name, known even to 12 year olds in the Scottish Borders. Now? Well, not so much.

In that respect then, the battles of the late-1970s and the early to mid 1980s weren't just questions of economics, they were fundamentally about politics. Who runs Britain, indeed. The rest of it - privatisation of hopeless companies such as British Airways and British Telecom etc etc - would come later. But that's basically why she's considered the greatest Prime Minister of the past 50 years.

Comments

[Steve Sailer]

The old Labour Party suffered a fundamental conflict of interest as a governing party: as the Government, it was supposed to run the nationalized industries in the interest of the nation; but as the Parliamentary representative of the labour unions, including the huge unions at the bloated and money-losing nationalized industries, it was supposed to help unions extort as much in wages and goldbricking as possible from management (i.e., the Labour government) and shareholders (i.e., theoretically, the British people). The result was economic chaos: inflation, strikes, blackouts, garbage heaped up in the streets, etc.

By privatizing many nationalized industries and by taming union power in the battle with Stalinist Arthur Scargill's coal miners, in the mid 1980s, Thatcher made possible the New Labour Party that, freed from this fatal contradiction, has done so well for itself.

[jerzy cow]

No, Thatcher is not considered by people in the UK at least as their greatest post-war PM. Her party is so unpopular that it no longer controlls a single MP seat in Scotland, Wales, or Northern Ireland. And virtually none on the northern industrial regions of England.

The economy was not that bad in England either in the 1970's, just bad in comparison to the very fat years of the 1960's.

And much of the good economy in 1980's britain was because of the discovery of large amounts of oil in the North Sea, not any privitization plan.

I agree with your point that old Labour was overly dominated by militant trade unionists at the time, and that is what rightly led to its downfall.

But France's left party, the Socialists, also moved to the right economically during the 1980's, without losing power, so what Thatcher did might have happened anyway under a more left-wing Conservative government or under a Labour PM.

[Nathaanel Nerode]

Greatest post-war PM? That would be the one right after Churchill. Clement Atlee. Spectacular success at reconstructing a ravaged Britain; dismantled the Empire, more successfully than any other decolonizer; *established* the NHS, nationalized the Bank of England, etc., etc.

He may have gone too far with nationalization, but frankly all Thatcher did was to roll back a few of Atlee's changes; most of them remained intact.

Frankly, even PM Wilson's accomplishments have proved more lasting and satisfying than Thatcher's.

Thatcher is remembered positively because she was PM when Britain came out of 1970's stagflation. Same reason Reagan is remembered positively, really. It's actually unclear whether she or Reagan had anything to do with getting out of the 1970's economic disaster, but they get credit for it regardless.

[Nathanael Nerode]

Actually, long term the much-maligned *John Major* was a better PM. His reforms -- focused on basic competence and accountability in government, something Thatcher never paid much attention to -- have stuck.

[Mark]

Never tried to dismantle the NHS? Having spent many a day picketing the Thatcherite Conservative conferences in defence of Health Service workers, that's not how I remember it...

[Godfrey Wind]

Some extraordinary comments here! Mark is sure he recalls the much vaunted "Tory Cuts" into the NHS - how does he square this with the unavoidable fact that real terms spending on the NHS increased massively under Thatcher? I suspect he is applying wishful thinking here - even self-delusion is preferable to admitting that he wasted so many of those days stood out in the cold holding placards.

And as for Nathaanel Nerode's hilarious contributions - keep taking the pills, my friend. Or perhaps you're the author of a brilliantly satirical alternative history of the post war period? Atlee did his level best to absolutely stop Britain from recovering from war, so much so that we retained rationing for about a decade after the war ended.

I especially liked the comic touch of giving credit to the achievements of Wilson! I suppose he did give the Beatles MBEs, that was something.

And John Major reformed competence and accountability in government, and it stuck?! He brought in PFI, which (whatever the original intentions) New Labour have turned it into a scheme for redirecting billions of pounds straight to their cronies, while hospital beds stay filthy and schools slowly turn into medium-security day care centres for teenagers.

[Mark]

Well, Godfrey, here's what I remember from my own health district -
1. Replacement of Mental Institutions with the shining beacon of Thatcher health care policy 'Care in the community' , also known as 'putting the mentally ill on the streets'.
2. Closure of rural health facilities. emergency treatment for an agricultural injury goes from a 10 minute car trip to the cottage hospital to a 45 minute ambulance journey into town.
3. The introduction of layer upon layer of administration, which incidentally is where most of the real spending increases were.
Whats interesting was that viewed from this point in time, the NHS had an enviably lean management structure, with hands-on management (remember Matron), that has never been replicated, yet this was the focus of the the Conservative attacks on the Health service, that somehow the 4% administrative cost was inefficient.