Thatcher: The right leader for her time

Margaret Thatcher, Prime Minister of the United Kingdom from 1979 to 1990, passed away on Monday. Thatcher reasserted Britain’s place in the world as a military power when she defended the Falkland Islands, a British territory in South America, from an Argentinian invasion. She also allied with Ronald Reagan to fight the spread of communism and establish the world order we have today.

Thatcher is a controversial figure within Britain because of her domestic policy. However we must remember that leaders should be judged in the context of their own time.

In 1979, Britain was aimlessly wandering in the doldrums of post-imperial mediocrity. Labor strikes were common, public services were failing, inflation was sky-high, and tax rates on the rich were near confiscatory levels. Thatcher assumed power with a mission to revitalize Britain.

Thatcher’s mission began with an effort to break the power of unions. She made it easier to work without joining the industry’s union, required unions vote to approve strikes, and held her ground in labor negotiations. While today‘s unions have only moderate power, in Thatcher’s time they dominated the economy. By prying power from their hands, Thatcher greatly improved Britain’s economic efficiency.

Thatcher also embarked on a new course for dealing with inflation and taxes. Thatcher dropped tax rates on the rich from 83% to 40%. Thatcher also used aggressive monetary policy to wrestle inflation down from 22% a year in 1980 to 4.2% in 1987. Today we take for granted that the highest tax rates are around 50% and inflation usually doesn’t exceed 4%, but these were major changes at the time.

We also take for granted the relatively hands-off nature of government in the economy today; but in pre-Thatcher Britain, the government owned everything from British Petroleum to public utilities to Jaguar. Many of these state-run corporations acted more as employment agencies than efficient businesses and most of them lost money and increased the deficit. Thatcher quickly privatized them. While many employees lost their jobs, the businesses’ efficiency improved dramatically and they became profitable.

Thatcher also reformed housing and healthcare. She introduced competition to improve the efficiency of the National Health Service. Thatcher also allowed those living in public housing to buy their homes from the government. This not only reduced the size of government, but also turned 1.25 million public housing tenants into property owners who then had a stake in society.

At the beginning of the 1980s, Britain was in desperate need of Thatcher’s reforms. 83% tax rates and inefficient state-owned companies illustrated that the Left had sacrificed practical concerns for ideological ones. When one ideology becomes powerful and complacent, society needs a reformer to come in and shake things up. In 1979, Britain needed a right-wing reformer to change its course. In 2013 America, a developed nation without universal healthcare coverage and decaying infrastructure, what kind of reformer do we need today?

 

This article originally published in The Daily Gamecock

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