Myths From The Left: Thatcher, The Economy & Unemployment

The biggest stick the Left always uses against Baroness Thatcher and her governments are the unemployment figures between 1982 to 1986, which stood at over 3 million during the period. Baroness Thatcher stands accused by her extremely vocal and vicious critics of callously destroying the British coal and manufacturing industries with her uncompromising monetary policies. The truth however is far more complex and damning of the Left’s role in this chronicle than they would care to admit.

In her autobiography, The Downing Street Years, Baroness Thatcher attributed the rise in the unemployment figures to “past overmanning and inefficiency, strikes, technological change, changes in the pattern of world trade and the international recession” amongst other factors. It is clear to me that the rise in unemployment was in large part due to unsustainable levels of jobs artificially created by an interventionalist state within an already bloated public sector. Successive pre-Thatcherite governments created jobs purely for the sake of creating jobs in much the same vein as the Soviet Union. This combined with the inability of the state-owned industries to adapt working practices to both incorporate and exploit the benefits of new technology meant these industries’ produce were unable to compete with its (often private sector and international) rivals that had kept pace with these changes to reduced overheads.

This industrial stagnation and inefficiency was made worse by unsustainable wage increase demands from the trade unions that were well above the rate of inflation. These demands created a catch-22 situation whereby in order to pay for these wage increases, the cost of produce had to be increased, pushing inflation upwards. As inflation wiped out the real value of workers’ wages, the trade unions made further extravagant wage demands, pushing both costs and inflation up further still at a time when Britain’s international competitors were able to reduce costs while managing to increase wages at a sustainable rate in real teams thanks to the exploitation of new technologies and the implementation of more efficient working practices. In other words, both the nationalised industries and the British economy were living well beyond their means.

Thatcher knew that things could not continue as they were and that drastic action had to be taken to improve the heath of the economy. She also knew that to achieve this would be a painful process that would increase unemployment in the short-to-medium term in order to reduce overmanning, inefficiency and inflation. Such a course of action would and did leave her open to accusations from loony lefties of callously destroying Britain’s industrial base and ruining people’s lives for the sole benefit of the greedy, the strong and the powerful, but despite the black propaganda peddled about her, her policies and her motives, what Thatcher did was right, necessary and brave. Thatcher saved Britain from what Friedrich August von Hayek had termed the “fatal conceit” of socialism and for that, we should all be grateful.