Thatcher Not Good for British Capialism

Thatcherism versus Capitalism?

By Gwydion M. Williams

Mrs Thatcher likes to boast that she has single-handedly turned the tide against socialism and restored Britain to its proper Capitalist vigour. The truth is, a much deeper world-wide movement away from nation-slate centrally planned forms of socialism was already under way in 1979, when she came to power. She was simply lucky. Most of her decisions have been wrong, and have helped continue Britain’s decline among the capitalist democracies. Britain manufactures less than it did in 1979, and since a greater proportion of this is now owned and managed by foreign countries, British capitalism looks sick indeed.

Between the 1950s and the 1970s, socialism needed to go forward from central planning by technocrats to something much wider and more democratic. This didn’t happen. Orthodox socialist opinion very deliberately stopped it happening, by suppressing, excluding or diverting the minority who did want it. Meanwhile, the growing capitalist world market brought prosperity to countries that were able to cope with it. Countries like Japan and South Korea, and most of the nations of Western Europe. But not to Britain. Britain has continued to flounder about, losing the superior position it once held as the creator of the industrial revolution. North Sea Oil gave us a boost, but it can’t last for long.

Thatcherism was supposed to change this, and Thatcher certainly believes that she has. I used to think that she had – world capitalism was certainly doing fine, and I assumed that Britain would do O.K. as a part of it. But the vanity of Thatcherism – not just of Thatcher herself, though she is certainly vain enough – prevented Britain from being properly capitalist. Serious capitalists knew that some central planning was necessary, that education and training was essential in the long term, that industry must be protected by low interest rates and stable currencies, that major industries must be protected from cowboys who would make short-term profits for shareholders at the expense of long-term possibilities. Silly little Thatcherites, enthusiastically backing the ‘iron lady’ decided that we were much cleverer than the West Germans and Japanese. The best brains were encouraged to go into non-productive speculation. Education was cut back. Any group of managers who tried to plan for the future would be liable to be thrown out after a hostile takeover by wheeler-dealers who could promise shareholders bigger profits for a year or three.

Thatcherism is now gripped by problems from which it may not recover. Some model Thatcherites are going bankrupt. Others have the sense to swim with the tide. Like Nigel Lawson, who after losing control of the economy has gone laughing all the way to the bank, where he has been given a job and a truly enormous salary.

This was an item in Notes on the News for March 1990.  It appeared in Issue 16 of Labour and Trade Union Review, now Labour Affairs.