The Iron Lady is gone, but Thatcherism is alive and well

A portrait of former British prime minister Margaret Thatcher hangs on the wall at the Conservative Party headquarters in Finchley in north London on April 10, 2013. British lawmakers interrupted their holidays for a special session of parliament on April 10 to pay tribute to Margaret Thatcher, who died on April 8 at the age of 87 after suffering a stroke.
Andrew Cowie

PRETORIA, South Africa — The reason Margaret Thatcher’s death continues to divide opinions and arouse strong emotional reactions has to do more with the controversial legacy of her policies, in the current economic environment, than with her personal history and individual qualities.

At home, she will be remembered by many as the leader who changed the face of Britain through aggressive reforms that reduced the weight of the state in everyday life and let the market reign unbridled. Wholesale privatization of key industries and utilities, coupled by violent attacks on unions, were responsible for the rapid disintegration of entire working class communities.

While the first years of her shock therapy were followed by more than 20 years of almost uninterrupted economic growth, this came at a cost of millions of jobs lost and rising income inequality relegating Britons on low salaries to the status of “working poor.”

Her influence reached well beyond the border of United Kingdom. Her alliance with Ronald Reagan was pivotal in the global spread of neo-liberal policies that continued through the 1990s and the 2000s. She was the architect of wide-ranging deregulation of British financial markets, which spurred the rapid expansion of financial services in UK and abroad. Thatcher and Reagan’s reforms were crucial in setting the context for the 2008 global financial crisis.

In Thatcher’s vision of a post-Soviet world, a global market freed from the constraints of national intervention and the threat of communism would become the main social institution to deliver freedom and prosperity for all. She greatly helped in making free markets the ideological reality of our times, infiltrating all sectors of the national and international governance structures, filtering out all the way to NGOs and civil society.

Contemporary European leaders might lack the conviction and the doctrinal coherence of the Iron Lady, but they are de facto walking in her footsteps. As they carry out austerity programs, they advocate a similar policy rationale: the short-term traumatic effects of cutting social welfare and letting the economy adjust itself in the midst of a global recession will be written off by the long-term beneficial effects of growth.

It is within this context that the spontaneous wave of “death parties” spreading throughout Britain in the aftermath of Thatcher’s death should be understood. "Ding Dong! The Witch is Dead," a song from the Wizard of Oz, went viral as part of the “celebrations” online. These irreverent expressions captured the imagination of the media, not least because they break with the British culture of respect and propriety that sees these actions as distasteful.

But “party-goers” and protesters are not just talking about the past. They are making an important point about the future of Britain. The Tory-led government installed in 2010 launched the biggest series of spending cuts since Thatcher’s era, agitating the spectre of bankruptcy to push its agenda.

Local governments have had their state funding hugely curtailed, causing the dwindling of essential social services. An overhaul of incapacity benefits has endangered the health of many citizens. Higher education has seen a substantial reduction of state funds for teaching and research. Public sector wages were frozen for two years, and raises for the next three years are capped at one percent. The National Health Service is undergoing structural reforms heading toward increasing privatization of services.

As the effects of these cuts kick in, further reductions in welfare benefits have been announced. More and more people will be forced to fend for themselves in an economy where jobs are scarce.

It is not surprising then that the nation has been on high alert for potential public unrest following Thatcher’s death. The last few days have seen the constant streaming on national media of tributes and hagiographic narratives culminating in an expensive funeral bankrolled from public coffers. Thatcher received the same honors previously accorded to Lady Diana and the Queen Mother.

Meanwhile, millions of Britons are feeling the hit of the cuts, struggling to pay bills and feed their families. Many of them still remember the trauma of the 1980s. They are now going through it all over again as their standards of living continue to drop.

There are some important differences that make the current situation even more bleak. For one, Prime Minister David Cameron lacks the conviction and credibility of Thatcher. He is known for swift changes of opinion influenced by swings in poll ratings, and for embarking on policy campaigns of dubious efficacy.

Current debates on the future of Britain are focused on obscure numbers and unlikely projections that dress up the massive downsizing of the welfare state in inaccessible specialist jargon. People are supposed to feel reassured that, according to the Office for Budget Responsibility, the government is on course to meet its “fiscal mandate for the cyclically adjusted current budget in balance or surplus five years” from now.

What does this mean for the millions of people who are unemployed or underemployed? Where will the real economy be in 2015? Will highly qualified youth find a job that suits their skills and aspirations? Has anything been done to avoid a repeat of the 2008 financial crisis?

Cameron’s vague answers are a far cry from the promise of democracy and prosperity that filled Thatcher’s charismatic speeches. The road was clear then: liberate the markets from the yoke of state intervention, defeat communism, and all will be free and wealthy.

We now know that the utopian vision of the market played out very differently. Yet, the Tories and other advocates of austerity throughout Europe are asking their citizens to follow a similar path, without a clear vision of what will happen next.

The world might be able to weather another financial crisis, and economic growth might eventually return after a prolonged period of stagnation. If austerity is not reversed, however, only one outcome is guaranteed. The rich will get richer and the poor will get poorer.

Vito Laterza is a postdoctoral fellow in the Human Economy Program at the University of Pretoria in South Africa. His research focuses on political, economic and socio-cultural issues in Africa and the West, from a global geopolitical perspective. He tweets @vitolaterza09.