Politics The right will deny it but Thatcherism’s day is done Only Labour has the values and the vision to respond to the public appetite for an end to market fundamentalism and gross income inequality. Print HTML Always an overachiever, Margaret Thatcher has managed something in death that evaded her in life: she united Britain. The unity is not, of course, over the individual acts of her tenure, the cold-eyed dismantling of the coal industry or the privatisation of public goods, but in the acknowledgement, by left and right, that hers was an historically significant part in our politics and public life. Thus the adulation and rage that has been heaped on her memory in equal measure, have shared that assumption that her policies, and the political economy and philosophy she came to embody, were defining of their age and have overshadowed those that followed. However, amid the avalanche of comment that has followed her passing, one further, common conclusion should be discerned, though many on the right will deny it: her day, Thatcherism’s day, is done. And the politician or party that most closely grasps that essential fact and frames a future predicated on its truth will shape the next chapter in our public life, as she shaped hers. Her era ended definitively, not in 1990 when she left office, nor even in 1997 when Tony Blair entered Downing Street and ushered in a period of Labour government which ameliorated the settlement left by Thatcher, but failed to fundamentally transform it. No, the moment the music stopped for Thatcherism was on 15 September, 2008, when Lehman Brothers filed for Chapter 11 bankruptcy, its foundations fatally undermined by the forces of financial liberalism and the selfish, greedy culture she legitimised, indeed sanctified. Some have been slow to recognise that fact, unsettled by the 'strange non-death of neo-liberalism', even in the teeth of its evident failure. I suspect, however, that Thatcher would have sniffed the wind and been among the first to sense its turning, to note the public discontentment with an era just ending and the demand for a vision of what might replace it. That, in part at least, was her great skill: her ability to sense that frustration with the economically constrained world of 1970s Britain could be translated into support for a dynamic, if destructive, mandate for change. For our modern Labour Party, that lesson is perhaps the most important of all to be drawn from the legacy of Margaret Thatcher: that radical change is possible, even within our innately conservative, democratic culture, but only when the people are ready for change and only if the prescription on offer looks set to meet their demands. For Thatcher, those demands were for economic security through price stability and industrial harmony, for a return, if you like, to the era of consistent growth, rising prosperity and cultural innovation which evolved through the 1950s and 1960s but which seemed to falter, then stall, in the stagflation and stultification of the 1970s. Her prescription was not so much new, of course, as new to Britain. Right wing economists and politicians, from Hayek, through Friedman to Minford and Joseph, had long advocated a radically liberalised, market-driven economy with a shrunken state counter-balanced and energised by powerful, individual consumers and asset holders. In this respect, Thatcher was not so much progenitor of the philosophy to which she lent her name but rather a sharp-witted vector for ideas whose time she thought had come. What is the core demand of our age? And who is beginning to frame it? Not David Cameron, that’s for sure, with his millionaires’ tax cut laying bare his warped priorities. His economic strategy of reducing public spending as stimulus to hitherto ‘crowded out’ private investment is planted in the arid soil of Thatcherism, and is predictably failing to take root – as £750bn of corporate hoardings bear incontrovertible testimony. Nor indeed, in truth, is the issue of deficit reduction the only defining malady of our age. It is a symptom, and it must be treated, of course, but the British patient is far sicker, and the cure must be further reaching and longer lasting than any Thatcherite quack can prescribe. No, deeper than debt and deficit is a fundamental issue of economic injustice, the debilitating condition of gross income inequality and the yawning social, class and cultural divisions that are calcifying in modern Britain. And though reducing the deficit is a vital step towards creating the circumstances in which a more holistic cure might be administered, it alone is not enough to bring about the fundamental fairness in our economy that would mark its sustainable return to health. Even some among those who marched for Thatcherism and who advocated trading equality for freedom in the name of economic reward are beginning to accept that the price was too high. As Ferdinand Mount, once policy director in Maggie’s Den, poignantly puts it: "it no longer seems adequate to excuse inequality as the inescapable consequence of market forces. For we were told that over time market forces would trickle all the way down to reach the worst off. That is not how it looks to the worst off today." In a Britain where 'Sids' in Surbiton have given way to Hedgies in Mayfair, where the new right’s promise of regional renaissance in our post-industrial heartlands is bitterly broken, the dream of a property owning democracy has become a deception for those priced out of the market or onto the street. And where a decline in the union strength she once has held up as the disease of her age has mirrored the rising inequality that scars our own. The people know that, as Thatcher once put it herself, enough is enough. Ed Miliband knows it too. That’s why he describes David Cameron as the last gasp of the old politics. That’s why he’s talking about reforming capitalism to reinstate fairness. That’s why he wants to build a Britain in which people earn a wage that allows them to live a life worth living, a Britain that competes abroad but also provides opportunity and equality at home, a Britain informed by our past mistakes of economic planning and statist solutions but one also aware of the crucial, modern role for public investment and renewed social solidarity. A One Nation Britain which heals the scars of the past by setting us on the path to a more equal future, in which everyone has a stake. Labour is setting out clearly the policies we need to change our economy and realign finance towards productive deployment in the real economy, leading to living wages, high employment and long-term investment and to supplant the culture of flexibility, corporate cronyism and short-term return that have become the norm. We need a progressive tax system and strengthened representation for the people – in the boardroom, on the shopfloor and in Parliament too. We need to show the confidence and the conviction in our politics that the woman whose passing we mark today always had in her own. Inequality is the scourge of our society today, a society we believe in just as strongly as she repudiated it. Only Labour has the values and the vision to do something about it and in Ed Miliband we have a leader with the faith and the strength to get it done. In that respect, if in no other, he’s a true heir to Thatcher and the right man to finally consign her legacy to the past. Owen Smith is shadow secretary of state for Wales (@owensmithmp) › In death, Thatcher has been reborn into myth David Cameron leaves at the end of the ceremonial funeral of Margaret Thatcher in St Paul's Cathedral. Photograph: Getty Images. Owen Smith is shadow welsh secretary and Labour MP for Pontypridd. 12 issues for £12 Subscribe More Related articles Banishing safe seats, and other proposals to bridge the democratic divide No, Jeremy Corbyn is not antisemitic – but the left should be wary of who he calls friends Can power-sharing in Northern Ireland be saved?