I was a ten year old child growing-up in France when I first heard the name Margaret Thatcher. Maggie, as she came to be known, had just liberated the Falklands (which French journalists insisted on calling “Les Malouines”). Mitterrand gave full support to Britain in that war (including vital information on French missiles sold to Argentina), and his feelings toward “La dame de fer” oscillated between admiration and envy (“Je l’admire. Ou je l’envie?” he confessed to his advisor Jacques Attali).
When it came to economics, however, the socialist President thought he knew better. He privately derided Thatcher as “a shopkeeper,” echoing Napoléon’s dismissive description of the British as “a nation of shopkeepers.” As a child, I thought Mitterrand was right. As an adult, I know he was wrong.
In a way, Britain gave liberalism and conservatism to the world. John Locke, Adam Smith and David Ricardo were liberals (in the original and British sense of the word) because they believed that there could be no political freedom without economic freedom. Edmund Burke was a conservative because he doubted the feasibility of Rousseau’s grand social designs and because he firmly believed that no society could function without cherished traditions and shared beliefs.
Both liberalism and conservatism took a blow in the 20th century, though. The economic crisis of the 1930s made people wonder where the “invisible hand” was hiding. European fascism discredited nationalism. In post World War Two Europe, economic thought and policy were dominated by Keynesians, and political discourse was nearly monopolized by Marxists (“The opium of the intellectuals” as Raymond Aron pointedly spat).
The 1970s changed the fortunes of the Keynesian and Marxist duopoly. The enduring “stagflation” put Keynesians on the defensive, and the lowering of trade barriers within the EEC and the GATT turned demand side economics into a “help thy neighbor” policy. In addition, Alexander Solzhenitsyn’s revelations about the Soviet Gulag embarrassed the European Left. The time was ripe for liberalism and conservatism to make their case again.
The task was daunting. The fact that Keynesianism was no longer delivering and that Marxism’s true colors had been revealed did not produce an overnight Umwertung. Indeed, Germany’s Willy Brandt was busy appeasing the Soviets with his Ostpolitik, and in France Mitterrand added Communists to his Socialist government. Liberalism was in need of leadership. Margaret Thatcher provided it.
When Margaret Thatcher was elected in 1979, the British economy was in decline and the West was in retreat. In 1979 alone, the West suffered three international humiliations (mostly thanks to Jimmy Carter): the Soviet invasion of Afghanistan; the Islamic revolution in Iran; and the Sandinista coup in Nicaragua.
Thatcher faced those challenges by battling for freedom both in economics and in foreign affairs. Her outlook on economics had been influenced by Friedrich von Hayek and by Milton Friedman. Her conduct of foreign policy was based on Churchill’s warning that whoever chooses dishonor to avoid war ends up with both dishonor and war.
Hence did she pass an unpopular budget in 1981 despite calls from within her own party to operate a “u-turn” (“You turn if you want. The lady is not for turning”). And hence did she deal with the miners’ 1984-1985 strike with unflinching determination. Thatcher lowered Britain’s punishing income tax, privatized government-owned behemoths, took away from the unions the power of shutting down the country, and stopped throwing taxpayer money into industrial black holes. While her reforms put many people out of work in the short run, they lowered unemployment in the long run. As a result of her policy, Britain has less unemployment and more economic growth than France. Indeed, London has become a refuge for French entrepreneurs who flee punishing taxes and unaffordable labor laws.
Her reforms have served as a model of economic liberalization in India, in South America, and in Eastern Europe. Even Israel’s 1985 economic stabilization program was pure Thatcherism –except for the ironical fact that in Israel Thatcherism was introduced by Shimon Peres while he served as Labor Prime Minister.
Thatcher was also right not to join the Euro. The European monetary union has become a trap for growth-prone and disciplined countries (Germany, basically) who end-up supporting profligate and irresponsible ones. Indeed, the Euro is like a dysfunctional couple that wants to separate but is deterred by the cost of divorce.
Thatcher’s foreign policy was also a change for the better. In lieu of the moral relativism and diplomatic appeasement of the European Left, she proudly proclaimed the moral superiority of democracy and made it clear to tyrants that she was out to get them. She ordered military action against the Argentinean junta and brushed aside calls for caution and conciliation. As a result of Britain’s victory, the junta fell and democracy returned to Argentina. Argentineans may revile Thatcher, but they owe her their freedom.
She rightly believed that there could be no peace with Russia without a victory over the Soviet regime. She allowed US nuclear missiles to be stationed in the UK in order to boost the West’s deterrence vis-à-vis Moscow. She made it clear to Gorbachev that he had to free his country before expecting the West’s largesse. The Soviet Union may have been doomed to implode, but Thatcher and Reagan decisively accelerated the process that brought the Evil Empire to its knees.
Thatcher had no patience either for the clownish reincarnations of Saladin. She supported the bombing of Tripoli in 1986, severed diplomatic ties with Iran in 1989, and convinced George Bush senior to use military force against Saddam Hussein after the invasion of Kuwait. She stepped down shortly before the Gulf War, but that war might never have been fought if she hadn’t been on board from day one.
Like everyone else, of course, Thatcher had a less savory side. Her tolerance for Chile’s Pinochet and for South Africa’s Apartheid government is unforgivable.
But, on balance, she gave back to liberalism and conservatism their lettres de noblesse. The struggle is far from being over but, thanks to Maggie, it is no longer hopeless.