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Instincts transformed ‘into practical theories of governance’.

WALL STREET JOURNAL – Most British policy makers of the time had no real grasp of economics: no idea what caused inflation; no idea how to run state-owned enterprises (much less that government shouldn’t run businesses at all); no idea—beyond increasing civil-service rolls—how to create jobs. Worse, the cluelessness was bipartisan. “The Tories loosened the corset of socialism,” Thatcher wrote in her memoirs. “They never removed it.”

Thatcher was different, an “instinctive conservative” whose economic philosophy drew from her father’s observations of stocking a grocery. Her memoir recalls her youthful wonder at “The great complex romance of international trade which recruited people from all over the world to ensure that a family in Grantham could have on its table rice from India, coffee from Kenya, sugar from the West Indies.” She had also, with her cabinet colleague Keith Joseph, spent years transforming those instincts into practical theories for governance.

And so it went for the next 11 years, as Thatcher and her government stopped printing excess money to kill inflation, cut marginal tax rates to unleash private incentives, privatized public housing so the poor could own their own homes, did away with currency, price and wage controls to eliminate the distortions they imposed on the economy, curbed runaway spending and sold off one state asset after another so they might be competently and profitably managed.

All this was done despite sharp short-term economic shocks and in the teeth of immense resistance, particularly from trade unions. In 1984, the coal miners union of Arthur Scargill went on strike for nearly a year. Similar strikes had brought past governments to their knees, but Thatcher, in a feat of immense courage and political skill, remained immovable and eventually won public opinion to her side. As she had famously said of herself a few years earlier (without being believed), “the lady is not for turning.”

But staring down labor unions was the least of it. In March 1979, a faction of the Irish Republican Army murdered Airey Neave, her campaign manager. Eleven years later, they murdered Ian Gow, her former private secretary.

Continued at The Wall Street Journal |

Safest faith: the stupidity of union leaders.

By PAUL JOHNSON [Wall Street Journal] – Thatcher’s long ministry of nearly a dozen years is often mistakenly described as ideological in tone. In fact Thatcherism was (and is) essentially pragmatic and empirical. She tackled the unions not by producing, like Heath, a single comprehensive statute but by a series of measures, each dealing with a particular abuse, such as aggressive picketing. At the same time she, and the police, prepared for trouble by a number of ingenious administrative changes allowing the country’s different police forces to concentrate large and mobile columns wherever needed. Then she calmly waited, relying on the stupidity of the union leaders to fall into the trap, which they duly did.

She fought and won two pitched battles with the two strongest unions, the miners and the printers. In both cases, victory came at the cost of weeks of fighting and some loss of life. After the hard men had been vanquished, the other unions surrendered, and the new legislation was meekly accepted, no attempt being made to repeal or change it when Labour eventually returned to power. Britain was transformed from the most strike-ridden country in Europe to a place where industrial action is a rarity. The effect on the freedom of managers to run their businesses and introduce innovations was almost miraculous and has continued.

Continued at The Wall Street Journal | More Chronicle & Notices.


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