Thatcherism is dead. Boris Johnson’s love of big infrastructure projects conflicts with her preference for markets and caution about spending public money. His pulling out of the single market contrasts with her hailing it as “a fantastic prospect for our industry and commerce.” His increase in bus subsidies conflicts with her antipathy to public transport. (She never actually said that any man on a bus after the age of 30 should consider himself a failure, but the fact that it is so widely believed that she did so reveals something about her). And, of course, whereas Thatcher chose free market ideology over the wishes of northern (now post-) industrial towns, Johnson is making the opposite choice.
John Harris has quoted a senior minister as saying that “some very prominent strands of Conservative thinking were now in retreat” and that “some of the things we’ve celebrated have led us astray”. Those things are Thatcherite ones.
It’s not just the political climate that is anti-Thatcherite, however. So too is much of the intellectual climate. Thatcher regularly invoked Hayek and Friedman as intellectual influences. Not only does Johnson have no such equivalents, but perhaps the two most prominent economics Nobelists today – Paul Krugman and Joe Stiglitz – are hostile to Thatcherism. And Banerjee and Duflo’s latest book, Good Economics for Hard Times, is a flat rejection of her naïve faith in free markets, with its message that economies are sticky and slow to respond to shocks.
All this reflects the fact that the facts are now anti-Thatcherite. She hoped that deregulation, privatization, lower top taxes and the smashing of trades unions would lead to not just to an economic renaissance but also to a revival of what Dierdre McCloskey calls bourgeois virtues. But they haven’t. In fact, productivity growth was much slower in the Thatcherite era than it was during the post-war years. As I’ve said, there are many ways in which neoliberalism caused the productivity slowdown.
Nor have we seen a flourishing of bourgeois virtues. Thatcher hoped to create a society of men like her father, but left us one with men like her son. The assertion of “management’s right to manage” has led not to a healthier economy but merely to more expropriation. An under-appreciated sign of her legacy can be found on daytime TV. Programmes such as Homes Under the Hammer, Bargain Hunt and Antiques Road Trip show that the British public prefer to make money from rising house prices and selling tat rather than from graft, innovation and entrepreneurship*.
You might object here that one legacy of Thatcherism lives on – inequality. True. But of course, inequality and its defenders long pre-dated Thatcher. In many ways, what most distinguished Thatcherism is now gone.
Herein, though, lies a wonderful paradox. It is not the Conservative party that has suffered most from the death of Thatcherism. It has successfully reinvented itself, helped in part by not suffering the handicap of having principles or feeling the need to think deeply.
Instead, perhaps the biggest casualty have been centrists. The collapse of Change UK, or whatever they called themselves, means that their parliamentary presence now matches their intellectual heft. My biggest beef with them – and indeed with the Labour right – has been their total lack of any worthwhile economic ideas.
There is, I suspect, a reason for this. Centrists were keen to accept “economic realities” when these were Thatcherite ones of fiscal “credibility”, tolerance of the wealth and power of the 1%, and faith that the capitalist economy could grow nicely with only little state help. Now that the realities are anti-Thatcherite – that inequality does real damage and that capitalism is stagnant – they are as helpless as a whale left on a beach after the tide has gone out.
The old jibe against the Labour right had some truth – that they were capitalism’s second XI. And why would anybody want a second XI when the first XI have made themselves fit for selection?
* This worked for me: most of my wealth has come from tax-free capital gains on housing.