Remembering the Iron Lady

On Monday, April 8, we woke up to the sad news that Margaret Thatcher, the former Prime Minister of the United Kingdom whose epoch changing tenure from 1979 to 1990 radically transformed her country on the basis free-market principles and reforms, died from a stroke in London at age 87.

Although it is nearly 23 years since she left office and formally ended her political career, there are few names or legacies in our times that continue to inspire as much nostalgia and passion or to elicit as much divisive rhetoric or anger as that of Margaret Thatcher. She forged a consensus on government’s proper role in society that permeated Britain’s Labor Party and served for 20 years as a model other countries would emulate in their struggle to build prosperous societies, transforming not only British politics but also her own Conservative Party.

The essence of Thatcherism—the name of the policies and attitudes that came to be most closely identified with her—is best understood in the context of the time during which it emerged as an ideological force. In 1979, Great Britain was a weak, stagnant country that was pushing further and further out into the periphery of irrelevance on the global stage. Its state-dominated economy was moribund and routinely thrown into upheaval by violent trade union protests and hugely disruptive strikes. Its state-owned companies were among the least productive and least efficient in the entire developed world. The savings of its people were being eroded by rising inflation and decreasing standards of living even as, abroad, the Soviet Union emerged as a renewed threat, and the omnipresent specter of nuclear war intensified. With firm pro-market convictions emanating from her earliest days as the daughter of a simple English grocer who taught her the value of hard work, self-reliance and virtue of entrepreneurialism, Thatcher initiated a series of controversial and initially painful reforms that privatized dilapidated industries, raised interest rates to tame inflation, clamped down on trade unions, and deregulated sectors of the economy ranging from finance to transport.

The results of the reforms speak for themselves. They were, as she and others termed them, a painful dose of medicine that simply had to be endured if Britain were to shed its terrible state. It’s true that, especially at the beginning of the 1980s, Thatcher’s reforms were hugely disruptive to the economy and presided over a period of rising unemployment and social discontent. But at the end of her tenure, all levels of income were better off than they had been in over a decade. Millions of Britons came to own shares in companies, previously moribund industries roared back to life, Great Britain became a revitalized center of finance and commerce as well as a new magnet for international investment, and—perhaps most significantly—Great Britain emerged as a self-confident nation that no longer lamented that its best days were behind her.

It was in Thatcher’s close political and ideological relationship with U.S. President Ronald Reagan that her ideological commitment to liberty was arguably most pronounced. She—together with Reagan, Pope John Paul II, Lech Wałsa, and a remarkable cast of almost providential individuals who seemed to spring up at just the right moment in history—stood up to the Soviet Union, denounced communism as an evil ideology and a failed system and encouraged the oppressed peoples of Central and Eastern Europe to stand up to their Soviet masters and rid themselves of their shackles. The legacy of Margaret Thatcher stands at the center of the great transatlantic relationship between the U. S. and Europe, particularly Great Britain.

Unfortunately, in the aftermath of the 2000’s economic crisis, the world has moved away from the Thatcherite consensus she forged and that shifted British politics toward the right. Nevertheless, Tony Blair, her eventual successor, admitted that after Thatcher, “the presumption should be that economic activity is best left to the private sector.” As this week’s edition of The Economist points out, Blair’s own Labor Party came to accept the role of markets, no longer pursued nationalization or tolerated the stranglehold on the economy previously enjoyed by powerful labor unions. The challenge in these post-economic crisis times is to remember the fundamental truth Thatcher articulated both in word and deed: the source of prosperity is not the state, but most fundamentally the entrepreneurial spirit and risk-taking of individuals who are at the heart of creation and growth. The government without a question has an important role to play as a guarantor of rights and as a safety net for those who cannot take care of themselves, but in summation the most important driver of economic life should be the private sector, not the state.

Margaret Thatcher arrived on the world stage at a time when she was most urgently needed, not just by the people of Great Britain who for decades had been trapped in the poisonous molasses of socialism and relegated to humiliating decline but by the whole human race. She, together with Reagan and others, hastened the Soviet Union’s demise and confronted it by calling it the evil that it was. She made Britain a great nation again by unleashing the entrepreneurial power of its people and saving it from the burdensome state that had made it “the sick man of Europe.” What a grand woman, a kind of hero that humanity experiences maybe once every century. May she rest in peace, and may we forever cherish her legacy and memory.

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