Margaret Thatcher was much more respected outside Britainthan she was in her own country. In the United States, but also in CentralEurope, she is recognized as a hero, especially in the fight for economic andpolitical freedom.
That vision of freedom and dynamism was never really allthat popular – or understood – by the British people. In the end, Thatcher’sachievement was also distorted by her own mistakes in dealing with the complexpolitics of a Europe that was rapidly changing in the aftermath of the collapseof communism.
As Prime Minister, she was widely disliked in Britain,mostly for bad reasons. Throughout her political life, she fought a two-front battle: against socialism, butalso against the Establishment.Sometimes the two theaters seemed to merge.
The British Establishment had adhered to a pact rooted inthe experience of the Great Depression and World War II. It would accept hightax rates and enormous redistribution of resources in exchange for beingpermitted to retain its quirky rituals, antique hierarchies, lofty titles, and fine distinctions. The result was widespreadinefficiency, an appallingrecord of labor unrest, low productivity, and economic stagnation.
Thatcher wanted to remake Britain according to the bestaspects of the American way of life: a belief in the potential of individualinitiative and entrepreneurship, and a can-do approach to life.
There was an element of fortuitousness about Thatcher’s politicalexperiment. She had been elected as Conservative Party leader because the moreplausible and better-known right-wing candidate had ruled himself out with an ill-judged andcontroversial speech.
She played ruthlessly on her femininity. As leader of the opposition, she visited the oldestand most conservative college at the University of Cambridge in order toaddress the rather small minority of conservative-inclined academics. The wood-paneled room was litin the evening only by candles, masked behind reddish-yellow shades. She began by remarking thatthe room looked more like a night club than a university, and then she took herjacket off and whirledit around her head as if she were about to begin a striptease.
She was quite intolerant of other women in politics, andliked to be surrounded by men. Part of her standard mode of political operationdepended on flirting.Personal emotions were also part of her foreign policy. She got on very wellwith German Chancellor Helmut Schmidt, a Social Democrat, but notoriouslypoorly with the Christian Democrat Helmut Kohl. (Indeed, the obvious personalchemistry between her and Schmidt led one staffer to observe that, had this not been theBritish prime minister and the German chancellor, they would have gone off hand in hand to thebedroom.)
As for the other side of the Rhine, she intensely disliked the snooty and aristocratic PresidentValéry Giscard d’Estaing, and developed quite good contacts with the initiallyvery radical socialist François Mitterrand. Above all, she had a great rapport with the charmingand courteousex-film actor Ronald Reagan, and a poor one with the patrician conservative George H.W. Bush.
The strength and unconcealed character of her personal feelings should not leadto the assumption that her politics were entirely instinctual. She also understood politicalpsychology and political practice. In driving Britain to fiscal good sense, shenever allowed a pure market ideology to undermine the interests of her keypolitical constituencies.
There was also a good deal of old-fashioned morality. At atime when Western European politicians, and the British foreign-policyestablishment, were worried that Solidarity in Poland would endanger stable relations with theSoviet Union, she boldly and correctly recognized that engaging the Polishopposition was an opportunity to promote freedom there.
The critical part of her fiscal and economic legacy came atthe beginning, in her first term in office. Faced by a worldwide recession inthe early 1980’s, she nonetheless insisted on a rigorous budgetary retrenchment. Academiceconomists were outraged,and a letter signed by 364 prominent scholars, protesting against the folly of Thatcher’sapparently pro-cyclical policy, appeared in The Times of London, then theEstablishment’s journal of record.
Moreover, her successful liberalization of British industrybecame an inspiration for Central Europeans wrestling in the early 1990’s withthe economic legacy of communist central planning. But not only there.Thatcherism also looked like a plausible model for policy stabilization inFrance in 1983, following two crisis-ridden years of experimentation. JacquesDelors’ success as French Finance Minister then set in motion a process of rapprochement betweenFrance and Germany.
On a European level, the British vision of liberalizationalso formed a crucial ingredient of the 1986 Single European Act, which wasdecisively influenced by Thatcher’s appointment of Lord Cockfield as Britain’sEuropean Commissioner. Delors’ European Commission took competition veryseriously as a way to boost economic growth and prosperity.
Logically, though, the Single European Act also required anew approach to monetary policy on the European level. Belief in the power ofthe market and competition thus underpinned a powerful new push in thedirection of European integration, something that Thatcher deeply andinstinctively distrusted.
When Thatcher fell from power in 1990, it was a consequenceof a revolt by herown party, caused by the deep policy divisions produced by Europeanintegration. In a way, she was the victim of her own policies’ success as amodel for other countries – and as a challenge to the European order.
Today, it is tempting to see parallels between the firstfemale British prime minister and Angela Merkel, the first female Germanchancellor. Both have been widely ridiculed, especially by economists, for their attachment towhat have been called simple-mindedideas of fiscal rectitudein adverse circumstances.
Making the case for fiscal discipline and market economicsis not a guarantee of political success. In the European context, it is notonly difficult domestically, but also inevitably leads to hard choices aboutthe future of the integration process.