Showing posts with label Thatcher. Show all posts
Showing posts with label Thatcher. Show all posts

Tuesday, April 9, 2013

"The Wicked Witch is dead": John Weeks on Thatcher's Legacy



WEEKS: First I should say I think think there are a lot of Americans who think that Margaret Thatcher may have been extremely conservative or reactionary. But she was actually sort of a major figure. These are probably people who went along and saw the film about her with Meryl Streep and so on. First thing you have to realize is that Margaret Thatcher had no positive side. It was my son who said [incompr.] the Wicked Witch is dead. She was an unrelenting opponent of the working class. She took as her major task as prime minister of Britain the crushing of the trade union movement, which she was, I regret to say, extremely successful. The war with Argentina [incompr.] sideshow is terrible for the Argentines. But the main function of it in Britain was to get her reelected in 1983 when her ratings were very low. And she was from beginning to end, as we say over here, a very nasty piece of work indeed....

See interview here: Real News Network: Under Thatcher, Poor Became Poorer

Thatcher in one graph

Income share of the top 1%. The other 99% can go...
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The real legacy of Mrs. Thatcher

Nicholas Crafts has published what is probably the mainstream view of Mrs. Thatcher economic legacy. For him higher Total Factor Productivity (TFP) and a lower NAIRU (natural rate of unemployment) are the results of her policies. I have discussed in other posts the problems with both concepts, so I won't delve into that right now (also not much time to deal with anything now). I just want to point out her legacy in terms of what Crafts calls 'ending the Trade Union veto.'
Graph above shows the fall in unionization rates and the share of wages in total income. The former fell around 10%, from around 50% of the labor force to below 40%, while the latter fell 5% or so. Higher unemployment, no negotiation with unions, lower taxes for the wealthy (marginal income tax rates) and higher for the poor (higher Value Added Tax, VAT), all combined to bring labor into line (end its veto power). That's her legacy. The rest is confusion, or worse just concealing the truth.

PS: A more critical perspective from Krugman here.