No ordinary politician

SEVERAL prime ministers have occupied 10 Downing Street for as long as, or even longer than, Margaret Thatcher. Some have won as many elections—Tony Blair, for one. But Mrs Thatcher (later Lady Thatcher), Britain’s only woman prime minister, was the first occupant of Number 10 to become an “-ism” in her lifetime. She left behind a brand of politics and a set of convictions which still resonate, from Warsaw to Santiago to Washington.

What were those convictions? In Mrs Thatcher’s case, the quickest way to her political make-up was usually through her handbag. As she prepared to make her first leader’s speech to the Conservative Party conference in 1975, a speechwriter tried to gee her up by quoting Abraham Lincoln:

You cannot strengthen the weak by weakening the strong.
You cannot bring about prosperity by discouraging thrift.
You cannot help the wage-earner by pulling down the wage-payer.

When he had finished, Mrs Thatcher fished into her handbag to extract a piece of ageing newsprint with the same lines on it. “It goes wherever I go,” she told him.

And it was a fair summation of her thinking. Mrs Thatcher believed that societies have to encourage and reward the risk-takers, the entrepreneurs, who alone create the wealth without which governments cannot do anything, let alone help the weak. A country can prosper only by encouraging people to save and to spend no more than they earn; profligacy (and, even worse, borrowing) were her road to perdition. The essence of Thatcherism was a strong state and a free economy.

For Mrs Thatcher, her system was moral as much as economic. It confronted the “evil” empires of communism and socialism. Many things caused the collapse of the Soviet Union in 1991, but the clarity of Mrs Thatcher’s beliefs was a vital factor.

Her beliefs were fine-tuned in the political struggles of the 1970s and 1980s. But in effect they changed little from what she imbibed at her home in Grantham, a provincial town in eastern England, where she was born in 1925. The most important influence in her life was her father, Alfred Roberts, who ran the grocer’s shop above which she was brought up.

He was a member of the respectable middle classes, the petite bourgeoisie of Marxist derision. As a town councillor for 25 years, Alderman Roberts, a devout Methodist, preached the values of thrift, self-help and hard work. Young Margaret, ever earnest, was inspired by his example.

A clever girl and a hard worker, she took a degree in chemistry at Oxford, where she began to be active in Conservative politics. In order to get on in what was then a rather grand, aristocratic party, she started to distance herself from her humble origins, marrying a successful businessman, Denis Thatcher, who financed her political career. Training as a lawyer and shopping around for a safe seat, she dressed and spoke as required: as a conventional upper-middle-class woman, with a nice house in the country and the children at posh public schools. She entered Parliament in 1959 for the safe seat of Finchley in north London, and quickly became a junior minister in 1961.

Just as she left Grantham well behind, so the new post-war Britain was leaving its old values and politics far behind as well. The country shifted significantly to the left during the second world war, leading to a landslide victory for Clement Attlee’s Labour Party in 1945. Building on the forced collectivism of the war years, the Attlee government embarked on industrial nationalisation and introduced the welfare state. To a generation of politicians scarred by the mass unemployment of the 1930s, full employment became the overriding object of political life.

Mrs Thatcher, like almost all ambitious politicians of her age, went along with this. But to keep employment “full”, successive governments, Labour and Conservative, had to intervene ever more minutely in the economy, from setting wages to dictating prices. In doing so, they crowded out the private enterprise and economic freedoms that Conservatives were supposed to stand for. It was, as Mrs Thatcher’s favourite intellectual guru, Friedrich Hayek, had warned in 1944, “the road to serfdom”.

A few intellectuals and politicians, Enoch Powell and Keith Joseph among them, rallied to Hayek’s cause. But they were derided as dangerous mavericks, and Mrs Thatcher, for her part, contented herself with climbing the greasy pole. She was made education secretary in Edward Heath’s government of 1970-74. Heath tried at first to inject a more free-market approach into economic management, but he was forced into a humiliating U-turn as unemployment passed the 1m mark. The government then went on such a huge spending binge to bring unemployment down that by 1975 inflation had reached 25% and people began to hoard food.

It was then that Mrs Thatcher became a Thatcherite. She was led there by Joseph, who argued that only a free-market approach would save the country. These policies, extremely daring for 1975, became her agenda for the next 15 years.

Mrs Thatcher, a great patriot, had been hurt and bewildered by Britain’s precipitate decline since 1945. Not only had Britain lost an empire; it was, by the mid-1970s, no longer even the leading European power. Joseph’s critique seemed a way to halt, and even reverse, that decline. What Britain now needed was an urgent return to the values of enterprise and self-help.

Thus Mrs Thatcher was reborn as a Grantham housewife. Out went the grating voice, hats and pearls of the aspiring Tory grande dame; in came the softer voice, kitchen photo-opportunities in her apron, and endless homilies about corner-shop values and balancing the books. She read her Hayek (which she was also prone to produce from her handbag), but it was her new populist style that made her a winner.

The Lady’s not for turning

Mrs Thatcher won the Conservative Party leadership election of 1975, defeating Heath by a fair margin. A woman had never held any of the highest posts in British politics before. With her twin children, a boy and a girl—even that was done efficiently—her job and her energy, she seemed to be the very “Superwoman” of Shirley Conran’s bestseller of that year. The Russians tried to mock her as “the Iron Lady”. It backfired; she loved it, and used it to her own advantage.

But she was also cautious. Well aware that most of her party, let alone the rest of the country, did not support her new policies, she proceeded slowly, appointing her supporters to a few key posts, but otherwise doing little to suggest a radical break with the past. She relied more on the mounting unpopularity of the Labour Party, unable to control the trade unions during the “winter of discontent” of 1978-79, to win the election of 1979.

Once in power, however, she revealed her true colours. Government spending was curbed to control the money supply, exchange controls were abolished and the currency was allowed to continue to float (rather than joining the new European Monetary System)—all decisive breaks with post-war orthodoxies. Industrial subsidies were cut, sending many firms to the wall. Against the background of a world recession, the result was a sharp rise in unemployment. By 1981, when joblessness stood at 2.7m, police were battling Molotov-cocktail-throwing protesters on many city streets in Britain.

This was Mrs Thatcher’s low-water mark. She was, for a time, the most unpopular prime minister on record. Most of her colleagues expected her to retreat, but instead she ploughed on. “U-turn if you want to, the Lady’s not for turning,” she had cried the year before. She sacked all those ministers, the “wets”, who wanted to change course, and stocked her cabinet with ideological fellow-travellers. The 1981 budget contained more spending cuts, further depressing demand, in the teeth of the recession; 364 economists condemned her policies in a letter to the Times.

This, more than anything, saw the birth of her reputation for ruthless decisiveness. With the economy still at a low ebb, her political fortunes were turned by the Argentine invasion of the Falkland Islands in April 1982. Shocked and angry, Mrs Thatcher launched a task force to re-take the islands, 8,000 miles away in the South Atlantic. Her arguments—that she was going to defend the islanders’ choice to be British, and that she would not “appease” the Argentine dictatorship—resonated strongly with a British public disheartened by years of defeatism and retreat.

This, and the haplessness of the Labour Party under Michael Foot, won her a landslide second general-election victory in 1983, which allowed her to press ahead with core structural adjustments to the economy. In 1984 began the great round of privatisations, in which behemoths such as British Telecom, British Gas and British Airways were sold off. Individuals were encouraged to buy shares, thus creating the image, at least, of “popular capitalism”.

After vanquishing the enemy in the South Atlantic, she rounded on the “enemy within” at home: in the BBC; the universities; and in local government, much of which she simply abolished. But her first target was organised labour, which had made the country ungovernable—in particular the National Union of Mineworkers (NUM), led by Arthur Scargill.

The NUM had cowed Heath’s government with its militant tactics. The inevitable showdown came when the NUM went on strike in 1984-85. Mrs Thatcher outlasted the miners, arguing that it was a battle for the right of management to manage over the arbitary use of union power, and her victory broke the unions for good. From a British perspective, it was the most important thing she ever did.

At the same time, she had not lost her talent for pragmatism. The Irish Republican Army (IRA) brought out the iron in Mrs Thatcher’s soul: she was unmoved by members of the movement starving themselves to death over their demand to be treated as political prisoners, and similarly undaunted when in 1984 the IRA retaliated by blowing up the hotel where the Tory Party was holding its annual conference, almost killing her. Yet in 1985 she put her feelings aside and signed the Anglo-Irish Agreement, devolving some power to Northern Ireland and preparing the way for a later peace settlement.

That year was perhaps the apotheosis of Mrs Thatcher’s premiership. The success of her policies at home and abroad made her, together with Ronald Reagan, the most distinctive advocate of a revived capitalism in the world. Under her, the Anglo-American special relationship was an exercise in mutual adoration. She was a staunch cold-war warrior, lauded wherever she went behind the Iron Curtain as a herald of freedom, which she often was.

An act of regicide

The third term culminated in personal humiliation, though not at the hands of the British electorate. At home Mrs Thatcher set about reforming the welfare state, attempting to introduce competition among health and education “providers” and to hand day-to-day decision-making to schools, hospitals and family doctors (thereby sidelining hated local-government bureaucrats). Abroad she was confronted with the “European problem”—the fact that the European Common Market (which she had embraced) was becoming an ever-closer European Union.

Mrs Thatcher’s domestic reforms pitted her against much wilier opponents than Mr Scargill. Middle-class trade unions like the National Union of Teachers and august professional bodies like the British Medical Association argued that Mrs Thatcher was hell-bent on dismantling the welfare state even as real spending on the public sector rose. Many middle-of-the-road voters were now nervous, as well as rank-and-file Tory MPs. Suddenly “their people” were complaining about “that woman”. And their nervousness was increased by ever-sharper divisions in the party between Europhiles and Eurosceptics, which could no longer be papered over.

Adding to all this was Mrs Thatcher’s increasingly imperial style. After her third victory she became inclined to refer to herself as “we” and to ride roughshod over any opposition. She used a clique of fellow-believers to design policy and sidelined backbench MPs. And she habitually asked colleagues whether they were “one of us”. Even the Tory Sunday Telegraph accused her of “bourgeois triumphalism”.

In October 1989 Nigel Lawson, her chancellor, resigned, infuriated that she was trying to undermine his policy of shadowing the Deutschmark. She lumbered her party with a “poll tax” which required both dukes and dustmen to pay exactly the same for their local-government services—a tax so unpopular that her Tory successor rescinded it. She addressed the European question with increasingly high-octane rhetoric, as in Bruges in 1988: “We have not successfully rolled back the frontiers of the state in Britain only to see them re-imposed at a European level.”

This led to a rapid succession of tactical mistakes that eventually persuaded her own party to sack her, an act of regicide that deeply shocked her and took the party a generation to get over. In November 1990 Geoffrey Howe, the last remaining giant from her 1979 Cabinet, resigned as deputy prime minister over her refusal to agree on a timetable to join a single European currency. As he left, he summed up in the Commons the difficulty of trying to work with her: “It is rather like sending your opening batsmen to the crease only for them to find, the moment the first balls are bowled, that their bats have been broken before the game by the team captain.”

Michael Heseltine, her most charismatic foe from the left of her party, immediately mounted a leadership challenge. Mrs Thatcher won the first ballot, but not easily enough to avoid a second one. Her cabinet ministers eventually persuaded her to take a bullet for the good of the party.

A long shadow

Judged from the grand historical perspective, Mrs Thatcher’s biggest legacy was the spread of freedom—with the defeat of totalitarianism in its most vicious form in the Soviet Union, and with the revival of a liberal economic tradition that had gone into retreat after 1945.

Her combination of ideological certainty and global prominence ensured that Britain played a role in the collapse of the Soviet Union that was disproportionate to its weight in the world. Mrs Thatcher was the first British politician since Winston Churchill to be taken seriously by the leaders of all the big powers. She was a heroine to opposition politicians in eastern Europe. Her willingness to stand shoulder to shoulder with “dear Ronnie” to block Soviet expansionism helped to promote new thinking in the Kremlin. But her readiness to work with Mikhail Gorbachev, the Soviet leader, also helped to end the cold war.

Mrs Thatcher’s privatisation revolution spread around the world. Other EU countries followed her example, if not her rhetoric: in 1985-2000 European governments sold off some $100 billion-worth of state assets, including national champions such as Lufthansa, Volkswagen and Renault. The post-communist countries embraced it heartily: by 1996 Russia had privatised some 18,000 industrial enterprises. India part-dismantled the licence Raj, and unleashed a cavalcade of successful companies. Across Latin America governments embraced market liberalisation. Whether they did this well or badly, all of them looked to the British example.

At home, her legacy was more complicated. Paradoxes abound. She was a true-blue Tory who marginalised the Tory Party for a generation. The Tories ceased to be a national party, retreating to the south and the suburbs and all but dying off in Scotland, Wales and the northern cities. Tony Blair profited more from the Thatcher revolution than John Major, her successor: with the trade unions emasculated and the left discredited, he was able to remodel his party and sell it triumphantly to Middle England. His huge majority in 1997 ushered in 13 years of New Labour rule.

She was also an enemy of big government who presided over a huge expansion of it. Her dislike of the left-wing councils that dominated many British cities was so great that she did more than any other post-war prime minister to bind local governments into an ever tighter net of restrictions. She had no time for the idea of elected mayors who united real power with real responsibility. Britain became much more like highly centralised France than gloriously decentralised America.

Yet her achievements cannot be gainsaid. She reversed what her mentor, Keith Joseph, called “the ratchet effect”, whereby the state was rewarded for its failures with yet more power. With the exception of the emergency measures taken after the financial crisis of 2007-08, there have been no moves to renationalise industries or to resume a policy of picking winners.

Thanks to her, the centre of gravity of British politics moved dramatically to the right. The New Labourites of the 1990s concluded that they could rescue the Labour Party from ruin only by adopting the central tenets of Thatcherism. “The presumption should be that economic activity is best left to the private sector,” declared Mr Blair. Neither he nor his successors would dream of reverting to the days of nationalisation and unfettered union power.

The Lady still casts a long shadow. She was a divisive figure, and the issues that she addressed continue to confront and divide. The British state has gone on expanding after a period of continence. Deficits have exploded. The relationship between some companies (this time banks rather than manufacturers) and government has become too close. Margaret Thatcher and the -ism that she coined remain as relevant today as they were in the 1980s.

Correction: This article originally stated that Mrs Thatcher allowed the pound to float in 1979. In fact the pound was already floating, but Mrs Thatcher abolished exchange controls and chose to keep the pound out of the European Monetary System. The article was clarified to reflect this on April 12th.