Thatcher's economic legacy

Margaret Thatcher's economic legacy was prompted by the 1976 Labour government's capitulation to the IMF – but she took it much further.

It is ironic that Margaret Thatcher’s funeral is to take place at St. Paul’s in the City of London. The world around Wren’s great monument is beginning to unravel as a result of the liberalisation forces she helped unleash. Banks are bankrupt, thousands of jobs lost, and the City’s hard-won reputation for honour and fair play is now in tatters.

The most fundamental economic action of the Thatcher era was to intensify the liberalisation of the financial sector. This was dictated by the City and endorsed by early monetarist economists.

The 1970s inflation was caused originally by this liberalisation and expansion of credit, at domestic and international level: too much money chasing too few goods and services. The Lawson boom of the late 1980s in the wake of attempted government retrenchment came as the money supply again became unhinged. Since the start of the liberalisation of finance at the end of the 1960s, the world economy has been on a roller-coaster, driven by repeated cycles of financial excess, inflations, economic failure and retrenchment. The almost unanimously celebrated 1992-2007 boom was an illusion made possible only by a debt inflation of a more severe kind than that of the 1930s.

As the debate over her legacy rages, economists are loud and united in the claim that Thatcher "fixed" the economy. Economists like Professor van Reenan of the LSE make vague assertions about improvements to the supply side, or to competitiveness. These hark back to arguments deployed by the original monetarists – Samuel Brittan of the FT; Brian Griffiths now of Goldman Sachs and an adviser to the Archbishop of Canterbury; and Peter Jay, ex-economics editor of the BBC. They were arguments used to justify liberalisation, and these policies caused the economy to deteriorate in every conceivable way.   

An examination of the post-war economic experiences of Britain was included in a 2010 PRIME report, "The Economic Consequences of Mr Osborne". 1976 is a key date: the point at which the Labour Government allegedly yielded "Keynesianism" to the IMF’s "reforms" that preceded and anticipated Thatcher’s policies. 

The most obvious economic headlines pre- and post-1976 are:

  • Unemployment averaged 2.3 per cent a year before reform and after 1976 rose to average 7.7 per cent a year;
  • GDP growth was 2.7 per cent a year before reform and 2.2 per cent a year afterwards; and
  • Income distribution narrowed almost every year before reform. 

And then the real transformation occurred. "The scale of the rise in inequality over the '80s was unparalleled both historically and compared with most other developed countries" according to the IFS in a 2011 report.

It is also a myth that the Golden Age that preceded liberalisation was burdened by an overreliance on the state, or the public sector. 

Before Thatcher came to power, the UK had a thriving manufacturing sector. In 1970, 33 per cent of the economy was accounted for by manufacturing. Today that proportion is 10 per cent. Before Thatcher, the owners of firms felt confident to invest: in real terms, capital investment grew by 4.6 per cent a year before her reforms and only 2.6 per cent afterwards.

Economic activity extended beyond the state and traditional manufacturing; there was a golden age of theatre, of design and of course of popular music. Britain could afford healthcare and education for all; secondary and higher education was free; a safety net protected the few that had no work, and a working pension system looked after the old. 

Contrary to the economic profession’s consensus, since reform, the size of government has grown as a share of the economy:

  • The broadest measure of the size of government, general government expenditure as a share of GDP, grew from 37 per cent to 41 per cent, post Thatcher.
  • In terms of the public finances, public debt measured as a share of GDP fell by an average of 5 percentage points a year in the period before Thatcherism. It rose by 1.3 percentage points per year in the period afterwards. 

This growth is of course not the positive result of more government spending on goods and services or of government investment. Rather, it represents the costs of the failure of reform. As the economy deteriorated, the cost of welfare and interest payments rocketed. 

In all this debate economists forget what the economy is for. It is not for the rich, or just about "growth" or "competitiveness". Rather, it provides an outlet for human creativity, and meets humankind’s deep desire to work. It creates frameworks that nurture and protect the young, the vulnerable and the old; that ease the adversities and enhance the pleasures of life for all those that live within it.

On these terms the reforms promoted by the economics profession and implemented by Thatcher have failed the people of Britain – catastrophically.  

The Conservative front-bench, featuring Margaret Thatcher, in 1976. Photograph: Getty Images

Ann Pettifor is director of Policy Research in Macroeconomics and Douglas Coe is a researcher with PRIME

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Love a good box set? Then you should watch the Snooker World Championships

The game relies on a steady arm, which relies on a steady nerve. The result is a slow creeping tension needs time and space to be properly enjoyed and endured. 

People are lazy and people are impatient. This has always been so – just ask Moses or his rock – but as illustrated by kindly old Yahweh, in those days they could not simply answer those impulses and stroll on.

Nowadays, that is no longer so. Twitter, YouTube and listicles reflect a desire for complex and involved issues, expansive and nuanced sports – what we might term quality – to be condensed into easily digestible morsels for effort-free enjoyment.

There is, though, one notable exception to this trend: the box set. Pursuing a novelistic, literary sensibility, it credits its audience with the power of sentience and tells riveting stories slowly, unfolding things in whichever manner that it is best for them to unfold.

In the first episode of the first series of The Sopranos, we hear Tony demean his wife Carmela's irritation with him via the phrase “always with the drama”; in the seventh episode of the first series we see his mother do likewise to his father; and in the 21st and final episode of the sixth and final series, his son uses it on Carmela. It is precisely this richness and this care that makes The Sopranos not only the finest TV show ever made, but the finest artefact that contemporary society has to offer. It forces us to think, try and feel.

We have two principal methods of consuming art of this ilk - weekly episode, or week-long binge. The former allows for anticipation and contemplation, worthy pursuits both, but of an entirely different order to the immersion and obsession offered by the latter. Who, when watching the Wire, didn’t find themselves agreeing that trudat, it's time to reup the dishwasher salt, but we’ve run out, ain’t no thing. Losing yourself in another world is rare, likewise excitement at where your mind is going next.

In a sporting context, this can only be achieved via World Championship snooker. Because snooker is a simple, repetitive game, it is absorbing very quickly, its run of play faithfully reflected by the score.

But the Worlds are special. The first round is played over ten frames – as many as the final in the next most prestigious competition – and rather than the usual week, it lasts for 17 magical days, from morning until night. This bestows upon us the opportunity to, figuratively at least, put away our lives and concentrate. Of course, work and family still exist, but only in the context of the snooker and without anything like the same intensity. There is no joy on earth like watching the BBC’s shot of the championship compilation to discover that not only did you see most of them live, but that you have successfully predicted the shortlist.

It is true that people competing at anything provides compelling drama, emotion, pathos and bathos - the Olympics proves this every four years. But there is something uniquely nourishing about longform snooker, which is why it has sustained for decades without significant alteration.

The game relies on a steady arm, which relies on a steady nerve. The result is a slow creeping tension needs time and space to be properly enjoyed and endured. Most frequently, snooker is grouped with darts as a non-athletic sport, instead testing fine motor skills and the ability to calculate angles, velocity and forthcoming shots. However, its tempo and depth is more similar to Test cricket – except snooker trusts so much in its magnificence that it refuses to compromise the values which underpin it.

Alfred Hitchcock once explained that if two people are talking and a bomb explodes without warning, it constitutes surprise; but if two people are talking and all the while a ticking bomb is visible under the table, it constitutes suspense. “In these conditions,” he said, “The same innocuous conversation becomes fascinating because the public is participating in the scene. The audience is longing to warn the characters on the screen: ‘You shouldn't be talking about such trivial matters. There is a bomb beneath you and it is about to explode!’”

Such is snooker. In more or less every break, there will at some point be at least one difficult shot, loss of position or bad contact – and there will always be pressure. Add to that the broken flow of things – time spent waiting for the balls to stop, time spent prowling around the table, time spent sizing up the table, time spent cleaning the white, time spent waiting for a turn – and the ability for things to go wrong is constantly in contemplation.

All the more so in Sheffield’s Crucible Theatre. This venue, in its 40th year of hosting the competition, is elemental to its success. Place is crucial to storytelling, and even the word “Crucible” – whether “a ceramic or metal container in which metals or other substances may be melted or subjected to very high temperatures,” “a situation of severe trial”, or Arthur Miller’s searing play – conjures images of destruction, injustice and nakedness. And the actual Crucible is perhaps the most atmospheric arena in sport - intimate, quiet, and home to a legendarily knowledgeable audience, able to calculate when a player has secured a frame simply by listening to commentary through an earpiece and applauding as soon as the information is communicated to them.

To temper the stress, snooker is also something incredibly comforting. This is partly rooted in its scheduling. Working day and late-night sport is illicit and conspiratorial, while its presence in revision season has entire cohorts committing to “just one more quick frame”, and “just one more quick spliff”. But most powerfully of all, world championship snooker triggers memory and nostalgia, a rare example of something that hasn’t changed, as captivating now as it was in childhood.

This wistfulness is complemented by sensory pleasure of the lushest order. The colours of both baize and balls are the brightest, most engaging iterations imaginable, while the click of cue on ball, the clunk of ball on ball and the clack of ball on pocket is deep and musical; omnipresent and predictable, they combine for a soundtrack that one might play to a baby in the womb, instead of whale music or Megadeth.

Repeating rhythms are also set by the commentators, former players of many years standing. As is natural with extended coverage of repetitive-action games, there are numerous phrases that recur:

“We all love these tactical frames, but the players are so good nowadays that one mistake and your opponent’s in, so here he is, looking to win the frame at one visit ... and it’s there, right in the heart of the pocket for frame and match! But where’s the cue ball going! it really is amazing what can happen in the game of snooker, especially when we’re down to this one-table situation.”

But as omniscient narrators, the same men also provide actual insight, alerting us to options and eventualities of which we would otherwise be ignorant. Snooker is a simple game but geometry and physics are complicated, so an expert eye is required to explain them intelligibly; it is done with a winning combination of levity and sincerity.

The only essential way in which snooker is different is the standard of play. The first round of this year’s draw featured eight past winners, only two of whom have made it to the last four, and there were three second-round games that were plausible finals.

And just as literary fiction is as much about character as plot, so too is snooker. Nothing makes you feel you know someone like studying them over years at moments of elation and desolation, pressure and release, punctuated by TV confessions of guilty pleasures, such as foot massages, and bucket list contents, such as naked bungee jumping.

It is probably true that there are not as many “characters” in the game as once there were, but there are just as many characters, all of whom are part of that tradition. And because players play throughout their adult life, able to establish their personalities, in unforgiving close-up, over a number of years, they need not be bombastic to tell compelling stories, growing and undergoing change in the same way as Dorothea Brooke or Paulie Gualtieri.

Of no one is this more evident that Ding Junhui, runner-up last year and current semi-finalist this; though he is only 30, we have been watching him almost half his life. In 2007, he reached the final of the Masters tournament, in which he faced Ronnie O’Sullivan, the most naturally talented player ever to pick up a cue – TMNTPETPUAC for short. The crowd were, to be charitable, being boisterous, and to be honest, being pricks, and at the same time, O’Sullivan was playing monumentally well. So at the mid-session interval, Ding left the arena in tears and O’Sullivan took his arm in consolation; then when Ding beat O’Sullivan in this year’s quarter-final, he rested his head on O’Sullivan’s shoulder and exchanged words of encouragement for words of respect. It was beautiful, it was particular, and it was snooker.

Currently, Ding trails Mark Selby, the “Jester from Leicester” – a lucky escape, considering other rhyming nouns - in their best of 33 encounter. Given a champion poised to move from defending to dominant, the likelihood is that Ding will remain the best player never to win the game’s biggest prize for another year.

Meanwhile, the other semi-final pits Barry Hawkins, a finalist in 2013, against John Higgins, an undisputed great and three-time champion. Higgins looks likely to progress, and though whoever wins through will be an outsider, both are eminently capable of taking the title. Which is to say that, this weekend, Planet Earth has no entertainment more thrilling, challenging and enriching than events at the Crucible Theatre, Sheffield.

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