The Dear Leader

The death of Margaret Thatcher has given us a glimpse of that rarest of creatures, the Great Woman Theory of History. Both friend and foe seem bedazzled by the impact that a single person had on the very warp and weft of life, which perhaps reflects her psychic importance as the first woman prime minister, or perhaps just her longevity in office. Eulogies obviously big up personal impact. You don't get up at a funeral and say "Fred was a nonentity who just went with the flow". Equally, histories emphasise the tides and currents on which our boats bob about at the expense of personal agency (and no doubt to Michael Gove's chagrin). There are pivotal moments where an individual can influence direction, but these are just oscillations in a longer trend. By and large, "management" (of which politics is a particular species) means keeping things running and not screwing up (a la James Crosby). "Making a difference" is a common ambition but a rare achievement. The flip-side of this truth is the cult of personality - the tendency to attribute inventions and great deeds to the powerful. You could have been forgiven this week for thinking Margaret Thatcher was North Korean.

The desire to credit her with near magical powers of influence produced one particularly surreal meme. Yesterday morning, Ian McEwan reminded us that before her coming you had to wait 6 weeks to get a phone extension installed. Stephanie Flanders, who may have copied Ian's homework, rolled out the same emblematic factoid on BBC News last night. Of course, the Leaderene was no more responsible for technological advance than Canute was for the waves. The key change in telephony was the widespread adoption of cordless phones in the mid-90s, which largely did away with the need for extension wiring. Warming to the theme, Philip Hensher imagined a counter-factual world in which Thatcher never came to power: "Perhaps we would be waiting six months for a mobile telephone... Perhaps there would be three TV channels and the requirement for a licence before you could use the internet". North Korea again.

McEwan guilelessly recalled a late-80s literary conference (presumably just before the Wall came down) where Italian writers (presumably Marxists) expressed frustration at the Brits obsession with the individual: "Take the larger view. Get over her! They had a point, but they had no idea how fascinating she was". I imagine the point that the Italians were making is that society is the product of long-term structural changes and literature reflects the accommodations we make with them. A focus on the individual heroine, bending history to her will, is just romantic wish-fulfilment. In other words, we need more Lampedusa and less Mills and Boon, which seems a reasonable conclusion at a literary conference in Italy, or elsewhere for that matter.

Even the more sober analysts of economic performance succumbed to the Dear Leader hysteria. Jeremy Warner in The Telegraph noted that GDP relative to France began to improve "almost from the moment she came to office, after more than three decades of decline". You can almost smell the magic, not to mention the unwillingness to credit any of this to the spadework of a prior administration. This hagiography came in the form of a critique of Paul Krugman, who asked (and admits he doesn't know the answer) whether the change in the UK's relative economic fortunes, which he sees as arriving in the mid-90s, is really attributable to policy changes 15 years earlier. In contrast, Allister Heath, editor of the City AM fanzine, claimed that blaming Thatcher for the 2008 debacle and its legacy is to "misunderstand history". Our current economic woes are all the work of Gordon Brown: "she can be held responsible neither for the state of today’s manufacturing sector, nor for the financial crisis".

He then promptly undermined his case by claiming: "Today’s ultra-efficient car industry, and its record exports, is a direct product of the Thatcherite revolution". So that's a 30-year time-lag between cause and effect, which ignores the role played from the 80s onward by technology (notably automation and logistics), the quality management revolution, and the opportunities presented by the EEC/EU. Only the last is (partly) attributable to policy, specifically Thatcher's championing of the single market. Contrary to the implied counter-factual, had Labour called and won an election in 1978, and continued in office through most of the 80s (not inconceivable as the SDP split might not have happened), the same changes (broadly) would have occurred in the UK car industry, just as they did in socialist France. There were bigger, global forces at work. The idea that we would have been stuck producing "notoriously poor" goods for the duration is, to coin a phrase, to misunderstand history.

Heath is also selective on financial services, insisting that the Big Bang was unavoidable: "The City’s old partnerships didn’t stand a chance; they would have been wiped away within a few years by meritocratic, hard-working global competitors with vast balance sheets. Thanks to Big Bang, the new players ended up being based in London, rather than elsewhere, contributing greatly to the Exchequer." This trades on the ridiculous notion, much beloved of Boris Johnson, that bankers have no reason to be based here beyond the love and appreciation of the locals. The plain fact is that deregulation allowed foreign banks and brokerages to buy up The City. They were always intent on moving in because of London's structural advantages in the money trade (notably Eurodollars and bonds). The abolition of the old restraints was not an enticement, like the introduction of a happy hour, so much as levering the pub door off its hinges. The Big Bang didn't defend UK interests, it merely allowed UK players to dip their snouts in a larger global trough. Working for Charles Schwab rather than Cazenove, or USB rather than Hambros, was an incidental detail.

Like many others this week, Heath also tried to scare us with tales of how the 70s were scarred by industrial action: "the workforce used as pawns by militant union leaders who would call strikes at every opportunity" (the man himself was 2 years old when the decade ended). It's funny how the trope of  the "undemocratic trades unions" is accompanied in my mind's eye by the image of workers in a car park voting on strike action (we only had 3 TV channels and it was wall-to-wall news). In other words, practicing the democracy that was conspicuously absent within the workplace. It is difficult to convince people today that strikes were nowhere near as prevalent as the myth has it, and that days lost to strike action didn't fall to a historically low level till the 90s, largely as a result of the changed composition of the economy. It was globalisation and deindustrialisation that primarily undermined organised labour, not anti-union law or police truncheons. The pitched battles of Wapping (inevitable technological change) and Orgreave (simple revenge for 1974) were exceptions, not the rule.

What I find interesting about the "militant unions" trope is the determination to maintain the bogey to the point of absurdity. Trying to paint Frances O'Grady as Arthur Scargill in drag is just silly. The visceral hatred of organised labour remains a significant dividing line on the right, between the small capitalists and Hayekians on the one side and the more pragmatic big capitalists and neoliberals on the other. I should point out that the "right" in this sense includes much of Labour. Talking of which ...

Another popular meme is the claim, made by Mrs T herself, that her greatest achievement was Tony Blair and New Labour. In fact, both she and he were common products of a wider tendency, not one of the other, and there were crucial differences between them. Thatcher was instinctively a champion of small capital who also benefited finance capital, though she showed no sign that she fully understood what she unleashed with financial deregulation. During the 80s, big capital was ambivalent, with the dwindling of institutional government support for industry offset by lower corporation tax and increasing privatisation. The growing rift over the EU pushed big capital towards New Labour in the 90s. Finance capital, now dependent on global flows and the need for domestic regulatory shelter, found a willing ally in New Labour and adopted an ambivalent attitude in turn. Thus the Tories were forced into a small capital laager ("moving to the right") on issues such as Europe, business regulation and immigration. Cameron attempted to obscure this with a socially liberal makeover, which predictably failed. The legacy of Thatcher is the persistent strength of this small capital core, now driving the demonisation of welfare and Europe.

The fact of New Labour's continuity is taken as evidence that Thatcher "made the weather" and "shifted the centre ground". The judgement of history will surely be that most of the socio-economic changes that came to pass in the 80s would have occurred regardless of who was PM. This is not to say she made no difference, merely that the difference is over-stated. Whether Michael Foot or Michael Heseltine, we'd still have ended up with mobile phones, the Web, Acid House, the Premier League, Channel 4 and easy credit by the 90s. We would not have been able to opt out from deindustrialisation and globalisation, any more than we could have ignored advances in technology.

It is reasonable to ask what a different leader might have exacerbated or mitigated; what a different oscillation might have looked like. Perhaps we'd still have built council houses and so avoided a property bubble. Perhaps the transition for mining communities (which was inevitable and not unwelcome - most miners hated the job) would have been handled better. Perhaps a larger manufacturing base might have been maintained and retooled. I doubt The City would have developed in any other way than it did, though the absence of a property bubble might have limited the damage of 2008, and the historic shift to a service economy was inevitable to some degree. Perhaps income inequalities and regional imbalances would not have been so stark, and perhaps the SNP would never have gained traction in Scotland (surely no one else would have been mad enough to introduce the Poll Tax). Peace in Northern Ireland would probably have come earlier, but I doubt we'd have joined the Euro. The counter-factual nostalgia of many commentaries this week is that we'd have ended up in much the same place but with less grief, less hatred, and less ugliness in our society. A bit more German, in other words. That thought alone would probably convince the old bat she was right all along.