Top Ten Ways Margaret Thatcher’s Policies Made our World more Unequal

The late Margaret Thatcher had an enormous impact on Britain and the world, but her legacy has been a more unequal, less prosperous Britain and world. She championed the wealthy and threw the national income to them; she systematically undermined the poor and middle classes. She championed neo-militarism and refusal to compromise in world affairs, undermining diplomacy.

1. In some part because of Margaret Thatcher’s policies, the share of British income of the top 1% had increased from 7.1% in 1970 to 14.3% in 2005. That is, the wealthiest 620,000 Britons take home twice as much of the national income every year as they did before Thatcher. The share of the working and middle classes plummeted in the same period.

2. In 2008, the top .1 percent, 62,000 Britons, received 5 percent of the country’s income, constituting a new aristocracy of wealth and privilege.

3. Half of the increase in income inequality at the top has gone to professionals in financial services, even though moving money around isn’t all that helpful to the economy compared to actually making something of value, and even though the financial sector was enabled by deregulation to engage in vast fraud and unsound investment practices, destroying the world’s economies in 2008. It was Thatcherite deregulation that laid the basis for this rise of the finance oligarchs. People celebrating that she kept the British pound and declined to enter the Eurozone, thus saving Britain from the current continental malaise ignore that the adoption of Thatcher-like policies on the continent is what produced that malaise!

4. At the same time, tax rates on the wealthy have plummeted, which means that the government cannot mitigate the consequences of the inequality, and has been forced to cut services for the poor and middle classes.

5. Current British government plans, following in the Thatcherite neoliberal direction, “would . . . lead to public sector job cuts of 710,000, more child poverty and a hike in university fees.”

6. In 1980 14% of the UK was in poverty. Today some 33% suffer multiple forms of financial insecurity.

  • “Over 30 million people (almost half the population) are suffering some degree of financial insecurity;
  • Almost 18 million people cannot afford adequate housing conditions;
  • Roughly 14 million cannot afford one or more essential household goods;
  • Almost 12 million people are too poor to engage in common social activities considered necessary by the majority of the population;
  • About 5.5 million adults go without essential clothing;
  • Around 4 million children and adults are not properly fed by today’s standards…
  • Around 1.5 million children live in households that cannot afford to heat their home.”
  • 7. In 1980, five percent of households could not afford to heat the living areas of their homes. Last winter, 29 percent had to turn the heating down or heat only one or two rooms. Thatcherism has literally made them cold!

    8. By selling off the one-third British government stake in BP, the oil giant, Thatcher’s privatization policies made the company unaccountable to any public and allowed it to pursue naked profit-seeking and disregard of the environment. The Gulf oil spill would have looked different and perhaps had a different outcome if the company had still been in part publicly owned. As it is, it is complaining about paying reparations to Gulf residents whose livelihoods it ruined! And, public ownership would have made it more open to pursuing green energy (as the governments of the UK and Scotland increasingly are) instead of doubling down on deadly hydrocarbons.

    9. Thatcher’s absolute refusal to negotiate or compromise over the Northern Ireland issue undoubtedly worsened and prolonged that conflict. Only when she was out of office did George Mitchell demonstrate that a settlement was possible, in the mid-1990s.

    10. Thatcher denied that there was any Palestine and her refusal to accept the Palestine Liberation Organization as a negotiating partner (at the time it represented almost all Palestinians) helped derail any peace process, allowing the Israelis to go ahead with the colonization of the Occupied Territories and the expropriation of Palestinian property.

    24 Responses

    1. Everything in this article, except for Northern Ireland which is Britain specific, can also be said about Reagan and the Republicans. The ironic and sad thing is that in the last election, those Britons voting for the Liberal Democrats thought they were voting for a liberal government. The Liberal Democrats and Labor together got around 60% of the vote, but Clegg sold the voters out, leading to the current coalition and the continuation of austerity and wealth transfer fostered by Thatcher. When they can’t get their way democratically, conservatives have shown they are not above stealing elections and/or using deception to get their way. The voters here and in the UK need to wake up to how their wealth and well being is being stolen from them and their children.

    2. Margaret Thatcher was certainly a historic figure. She was the first female British prime minister. She was the longest serving British prime minister in the twentieth century. Along with President Reagan, by following a very risky policy of confrontation with the Soviet Union that could have ended disastrously she managed to bring the Soviet Union to its knees. Early in Gorbachev’s career she discovered that she could work with him. She invited him to England when he was still only a member of the Politburo and later on she pushed him towards dismantling the Soviet system, although this was not what he initially had in mind, etc. So her place in history is secure.

      However, on balance, I believe that her legacy was a negative one. As a result of very dogmatic rightwing and anti-trade union policies and a lack of concern for less fortunate individuals in society she made Britain a harsher and coarser place. Her cult of individualism and faith in unchecked free enterprise made Britain, as you point out, a less equal society. In fact, she famously said that there was no such thing as society, but a collection of individuals. By her yearning for the days of Empire, which motivated her to invade the Falklands that fortunately ended well for her although it resulted in many British and Argentinian deaths, she prevented Britain from facing her current position as a medium-ranking European power. This legacy of forcing the country to punch above her weight has not helped Britain to come to terms with her present circumstances. That grandiose attitude was partly responsible for her rejection of full membership in Europe. Her fanatical enthusiasm and support for the first Gulf War after having supported Saddam Hussein to the hilt during the Iran-Iraq war led both Britain and America towards renewed dreams of empire and colonialist domination. So, on the whole, history may come to view her as someone who arrested the smooth progress of Britain towards a more equal, more democratic, and more humane society, a course that she had followed since the Second World. On the world stage too this attitude has also resulted in renewed dreams of Western domination in the world, which have given rise to so many more conflicts.

      • “By her yearning for the days of Empire, which motivated her to invade the Falklands….”

        You have your history exactly backwards. The Falklands were and have been British all along. It was Argentina that invaded the Falklands in 1982. Britain, under Margaret Thatcher, correctly defended the Falklands (as any country would when its own territory is invaded), defeated the Argentine invaders, and reestablished the status quo ante.

        • Spaniards had it first, the British Empire grabbed it when the elite there were still playing the Great Game as a Major Player. Love the mind set that says killing people and blowing stuff up as part of a claim that flyspeck “strategically important –just how, again” islands are “its own territory.” There really is something wrong with humans as a species that this kind of thinking and behavior is what rules. “Correctly defended”? Huh. And the reasons for invading Iraq and Afghanistan, again? Not “our territory,” it would seem. Must be something else, then.

          How did the kinds of creatures that came to dominate the Argentine military, using the drums of war to protect their political and economic positions, and of course their opposite numbers who ran the British forces, and who all just loved the opportunity to exercise their troops and toys, get to that place? One might hope that “we” might some day advance beyond the antediluvian, atavistic and troglodytic. Of course it’s un-Serious even to speak the wish…

    3. Dear Professor Cole

      What you omit to mention is the destruction of UK Industry under the policies of the Thatcher government. The slogan was that they would do away with the smokestack industries and replace them with knowledge industries, funded by the North Sea Oil Bonanza.

      Sadly 25 years on, the oil is declining and gas is having to be imported from elsewhere, and they haven’t the money to build nuclear power stations.

      The following from a rabidly fallacious piece in the Telegraph describes the future for UK.

      link to telegraph.co.uk

      Research from the US government, which without doubt applies equally to Britain, suggests that just one out of the top nine occupations expected to create the most jobs this decade requires a university degree.

      The picture is truly dire for the army of university graduates: only five of the top 30 fastest-growing occupations expected to create the most jobs by 2020 require an undergraduate degree (or an additional post-graduate qualification) – nursing, teachers in higher education, primary school teachers, accountants and medical doctors – and 10 of the top 30 don’t require any kind of qualification at all.

      Among the top 10 fastest-growing professions are retail sales staff; food preparation (including fast-food restaurant jobs); customer service reps; labourers and freight, stock, and material movers; lorry and van drivers; and various healthcare aides, related to the ageing population. This is the semi-secret, and devastating, story that far too few people in government want to talk about.

      This is Mrs Thatcher’s true legacy: a McJobs Economy.

    4. Tax rates on the wealthy have plummetted ? Really ? In the late 1970s the majority of the very high earners didn’t live in the UK, meaning that dropping the tax rate to 40% (eventually) brought many of them back to the UK, giving the UK more tax income rather than less.

      Again, this is a mistake the current Labour party haven’t quite grasped.

      I’m all for narrowing the inequality, but simple flailing of figures such as that one is not demonstrating anything

      • So the rich blackmailed the government into punishing the poor in exchange for coming back. Essentially the scenario of “Atlas Shrugged” – where’s the resulting libertarian paradise?

        Oh yeah, because the rich came back, their money poured into speculation and real estate bubbles. Then the bubbles burst in 2008. How do the tax revenues benefit when that happens? They don’t – the country is undergoing another round of brutal austerity to appease the rich into spending again.

    5. On balance, Margaret Thatcher’s policies were good for Britain. Prior to Thatcher’s election, Britain was fast becoming a Third World country. It had a GDP lower than Italy’s at the time. Productivity was low. The British Miners’ Union held Britain in a stranglehold, and the British public was held hostage through Union demands and strikes. As a result, in the mid and late 1970s, Britain for a while went to a three-day work-week, there were power outages and brownouts, erratic heating, and garbage littered the streets. Meanwhile, the leader of the Miners’ Union, Arthur (“Red Arthur”) Scargill would take vacations on the Black Sea coast of Bulgaria and visit his friend, Bulgarian Communist leader Todor Zhivkov. (I was living in Sofia, Bulgaria at the time and noted his presence.)

      When Thatcher assumed the position of Prime Minister, she privatized much of the inefficient and unproductive state sector and, as a result, it became more efficient and productive. GDP went up. She reined in the Miners’ Union that had been the source of so many of the problems facing the British, from forcing the three-day work-week to the power outages and lack of heating. As a result of Thatcher’s policies, Britain became competitive again and assumed its place as a vibrant, medium-sized political and economic player on the world stage.

    6. Let’s not forget Maggie’s role in the First Iraq Fiasco:
      “In the aftermath of Gulf War I, various accounts of what British Prime Minister Margaret Thatcher had supposedly said to President Bush right after the invasion of Kuwait to stiffen his Ivy League backbone emerged in the press and books about the war. Wagging her finger at the president, the story goes, the “Iron Lady” admonished him, “Remember, George, this is no time to go wobbly.”” *

      Or Second Iraq Fiasco (that sounds like a kiddie tale, ‘The Lady and the Tramp’):
      “LADY Thatcher praised President Bush’s leadership yesterday and called for the war on terrorism to focus on the “unfinished business” of Iraq.” **
      Nice of her to play the cheerleader (minus the pleated skirt, lettre sweater, and pom-poms). And, like all the other wars the Brits liked so much that they had to share with the Americans, she rode pretty much for free.

      * link to hnn.us
      ** link to telegraph.co.uk

    7. Only one good thing!She realised that the joining of the two Germanies and the destruction of the Soviet Union were NOT something to be celebrated. Events eg Superpower USA, NATO expansion and Europe’s woes, have proved her correct.

    8. Thatcher’s great jingoistic success with the Falklands war may have been a major inspiration for both Bushes and Dick Cheney.

    9. Also, she started a war in the Malvinas Island against Argentina knowing perfectly well that the U.K has no rights at all over the Islands…Many young men were killed due to her inmorality…f.r.

    10. The sad thing is, those income inequalty numbers are laughably tame compared to the income inequality numbers in the US.

    11. Nice book just came out in February “The Delorean Story” by former Delorean Motor Company executive Nick Sutton, who claims to have been involved in negotiations to rescue the automaker in late 1982 with the British government. He indicated that 1,500 workers’ jobs were lost when Margaret Thatcher refused to approve financing that would have saved the company after it had been placed in receivership.

    12. Labour took over for about two decades after her, why did they not fix this?
      Thatchers argument against socialism is so true. “They dont mind the poor being poorer as long as the wealth divide is smaller”. The divide may be bigger but we are all more wealthy than we used to be. People over £50,000 already pay 50% income tax. How much do you want from them, they pay a third of the UKs I.T. already, im not wealthy but i hope that if I meet success Ill have right to enjoy it. Socialism isnt about sharing the good its about sharing the misery.
      P.S. The UK has every right to the Falklands, there have been British people living there since before Argentina existed. Not to mention the theft of Patagonia.

      • As the divide gets bigger, your politicians cease to be your politicians. Look at America, where the rich can afford to buy both parties. As a result, we regard you Brits as hopelessly pinko, and plot to make your society even more unequal. How much US corporate money will find its way into David Cameron’s coffers in exchange for sabotaging NHS to prepare for US-run corporate medicine?

        Eventually it becomes a return to debt-based feudalism. Do you think Medieval injustice becomes tolerable because you get cellphones with that?

    13. Michael Ho

      I am originally from the UK- and so is niall Ferguson. Geography is not essential in determining insight and/or credibility.

    14. The only good thing she ever did AFAIAC was, early in her Premiership, to out Anthony Blunt as the fifth of the Cambridge spies, a secret that had been shamefully been kept hidden for two decades by the British Establishment, allowing Blunt to rise to the position of Master of the Queen’s Pictures.

      There might have been a lot wrong with Britain in the 1970s but Thatcher was the first serious politician to deliberately use mass unemployment as a tool for achieving political aims (taming the unions, making Britain safe for the fat cats). We’re still paying for the consequences of that policy now. She had a total disregard for the welfare of the bottom 50% and had the art of kicking people when they were down, eg. introducing the Poll Tax just as people were struggling with record-high interest rates on their home loans.

      Good riddance.

    15. This is interesting

      Wikipedia

      “The Thatcher baronetcy, of Scotney in the County of Kent, is a title in the Baronetage of the United Kingdom. It was created on 7 December 1990 for the businessman Denis Thatcher, the husband of Margaret Thatcher, Conservative Prime Minister from 1979 to 1990. His wife was created a life peer as Baroness Thatcher in 1992. As of 2012 the baronetcy is held by their only son, the second Baronet, who succeeded in 2003. As of 2013, the Thatcher baronetcy is the last hereditary title to be granted to someone outside the British Royal Family.”

    16. The people claiming Thatcher made Britons better off are wrong, simply because the normal advance of technology is doing that even in “socialist” countries. In fact, the standard of living of ordinary Britons was far higher in the 1960s than it had been before the war, when the Tories’ precious empire and superpower status were intact.

      Where is the proof that non-rich people are benefitting more from the Thatcher-Reagan era of letting the rich rape society, than from the increasingly egalitarian half-century that preceded it? In the era of high corporate and income taxes, people got radios, refrigerators, cars and TVs which they paid for with real wage increases. Under the neo-Victorian model, the capitalists increase their CEO salaries and investment returns by orders of magnitude, drive down the real wages of everyone else, and then find that no one can afford to buy the goods they’re selling. So the banks come along with investment and real estate bubbles and vast amounts of credit to keep rebooting the economy – for which they are well rewarded by becoming too big to be allowed to fail. Yes, technological gadgets have gotten cheaper, but they were already doing that under the New Deal model.

      Thatcher and Reagan wanted back the 19th century, forever, like the right-wingers who succeeded them. I would rather destroy civilization and let the roaches take over than have that racist, arrogant and imperialistic time be our species’ final fate.

    17. Professor Juan Cole has written an excellent article based on facts and measurable statistics. I am very glad that I see eye to eye with Professor Cole on this matter as I wrote in an article on the subject entitled “Margaret Thatcher: An Enduring Legacy of World “Class Division” and “Wealth Disparity” circulated two days ago:

      “Termed the “Big Bang” of the dismantling of the regulatory system in Great Britain, concomitantly with the privatization of public enterprises and the giving of a freeway to the Financial Center to dominate the economy, all in one go, Mrs. Thatcher, dubbed “The Iron Lady,” created a universally invasive culture of “Class Division” and of increasingly widening gap of disparities of fast accumulating wealth between the very few Haves and the increasingly impoverished Have Not.”

      Rajai Masri

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