There has been almost universal admiration for the strength of character, warm good humour and support for her fellow contestants that was displayed so disarmingly by Carol Thatcher in the 2005 series of the TV show “I’m a celebrity get me out of here”. I’m sorry to hear that Carol’s mother Margaret has passed away this week.

No figure in UK politics raises emotions quite like Margaret Thatcher. Yesterday we had a family gathering where three generations (with ages from five to seventy-two) were all yelling simultaneously about her. Personally, I have tremendous admiration for the steadfast manner in which Margaret Thatcher thwarted all attempts to create a Euro currency that included the UK (yes the idea of the euro was already being touted back then) (see page 14 of this pdf for how the Euro is broken by design). Her good sense when it came to monetary sovereignty can be contrasted with the previous fiasco where the Callaghan government borrowed USD from the US treasury in a goofy attempt to prop up the value of GBP and predictably left the UK in the clutches of the IMF.

When Margret Thatcher came to power the UK was sliding towards an abyss of destructive class conflict. It was not a choice between choosing one stable steady state or another. By the end of the 1970s a very rapidly developing dynamic was hurtling the economy towards calamity. Margaret Thatcher had to wrest control of a runaway train. The shame is that we had a government that aimed to “win” the “class war” rather than constructively resolving it*. In the process the UK economy was financialized and large sections of our country have become economically excluded (for an explanation of how Thatcherism worked, see section “Isn’t a financialized economy the goose that lays our golden eggs?”  on page 10 of this pdf ).

Of course it is all very well bringing hindsight to criticism of the past but we have our own problems today. Our problems today have some curious parallels with the situation in the late 1970s even though the issues today stem from the dynamic set in place by Thatcher. Then labour unions had a stranglehold of power and were able to stop anything being done. As union action rendered industries unworkable for the private sector, they were nationalized and the unions delivered further disruption of the now nationalised industry. Management became focused on labour relations and the idea that industry actually had customers to serve was long forgotten. Thatcher dealt with the unions but now banks have taken on the role of the economic sector that acts purely in the interest of elite bank employees -gutting the economy in the process. Now banks have been taken into state ownership because the action of bankers rendered the banking system unworkable for the private sector. The personalities involved even have an eerie similarity. Arthur Scargill’s battle to have a London second home for life seems much like Fred Goodwin’s pension controversy though of course the bankers grasp an order of magnitude more.

* The section “How direct economic democracy could optimise the economy” on page 7  of this pdf discusses how an employee ownership structure (such as in the John Lewis Partnership) might help to solve this issue.

Related material on the web:

The 1981 Budget – Facts and Fallacies, Session One: Emerging from the 1970s

Mrs. Thatcher’s Mean Legacy- Michael Hudson.and Jeffrey Sommers

Margaret Thatcher’s Gigantic Con Trick- Ramanan

Hidden profits, hidden rents- Interfluidity

Society buckled and is damaged but has never disappeared- Bill Mitchell

And all UK media too

Maastrict and All That -Wynne Godley (link added 12 June 2013)