Tuesday, 9 April 2013

What's wrong with much of the UK after Thatcher's legacy?

Few can be surprised at the sight of handfuls of people cheering Thatcher's death, although the ones seen in Glasgow yesterday must have been remarkably political active in their nappies, as virtually all were in their 20s.   Just goes to show how education is so powerful in transmitting not just knowledge, but ideology.

Journalists have been seeking out Thatcher haters, in Liverpool (where half of those broadcast by the BBC liked her), Durham, Glasgow and other towns where Thatcher's government finally pulled the plug of taxpayer subsidies and protectionism on the sunset heavy industries of coal, steel, shipbuilding, car assembly and the like.  Industries where the militant Marxist-Leninist trade union movement had fought any redundancies, any liberalisation of labour practices (consider industries where multiple unions protected individual parts of the production line, none letting any workers combine processes even if technology made it possible) and stubbornly refused to allow any form of industrial democracy, in the form of secret ballots.  Preferring the rule of the mob and the bullying of any dissenters, their ever increasing demands for higher pay without higher productivity gutted these industries.  They could no longer sell their products competitively, when faced with more efficiently produced imports from Europe and elsewhere, and so needed other taxpayers to prop up their sunset industries.  It was 30% more expensive to buy British coal than import coal

For whilst Labour politicians talked of the tripartite union-business-government cozy deals that they witnessed in some countries in western Europe, the unions were more interested in the philosophy being applied in eastern Europe.

So the subsidies ended, businesses that could never be internationally competitive, and couldn't even compete on domestic markets, closed, and whole towns lost their major employer.  

It's easy to argue that maybe more could have been done for these towns and cities, indeed there have been more than a couple of attempts at "regeneration" for some.  "Regeneration" meaning taking taxpayers money to tidy up public spaces, refurbish old buildings, maybe put in some new road or other transport facility, and hoping some new businesses arrive.  However, more often than not they didn't.  The legacy has been a generation or two of towns with declining populations, as those with aspiration leave, and others remain - their children raised on legends and teachers spreading their bile that Thatcher "destroyed" their communities.

What did they do to rebuild them?

It's been 30 or so years since the ending of industries that Phelan described rightfully as being on their knees already.  Thatcher didn't destroy the industries out of hatred, indeed there were offers of redundancy that Arthur Scargill rejected.  You see Arthur Scargill, who went on to form his own Socialist Labour Party, was not on the side of liberal democracy.  He was, and still is a communist.  He opposed the Solidarity trade union in Poland, and he would have been saddened by the collapse of the Marxism-Leninist authoritarian regimes across eastern Europe.

For they had all endured decades of the policies he embraced, of state owned industries, manufacturing according to centrally planned targets and only making what it was thought people needed, and ensuring full employment in the process.

Yet after all those regimes collapsed, they lost virtually all of their heavy industries.  Industries largely to produce 1950s grade machinery, weapons, railway equipment, ships and shoddy consumer goods were almost all unsalvageable.  Consider the worst examples, like Romania, which had been rendered bankrupt by Nicolae Ceausescu's megalomania, and his Corbusier style rebuilding of downtown Bucharest at vast expense, as he tried to replicate Kim Il Sung's personality cult.  

It is difficult to exaggerate about the complete destruction of industries and jobs seen in east Germany, Czechoslovakia, Hungary, Poland, Romania, Bulgaria, and indeed the increasingly bankrupt former Yugoslavia and Albania.  With few exceptions, such as Skoda, the brands and the state owned businesses of  eastern Europe were decimated, with millions made unemployed in a snap, and the euphoria which came from real freedom - freedom of speech and freedom of movement, was tempered as many faced having their livelihoods ended.  

West Germany bailed out east Germany by completely reconstructing its infrastructure, the utilities, building roads, railways and pouring a vast fortune into saving the third of Germany that had spent 55 years under totalitarianism.  The rest did have development loans, but their main approach was to reform, from scratch.  They abolished almost all monopolies, created brand new legal frameworks for property rights, contracts, commercial law, and shrank the state sector dramatically.  Most established low flat taxes, simple ones that were often based on the Laffer curve, maximising revenue, by minimising evasion and maximising growth.  They transformed.  After twenty years, the per capita GDP of much of eastern Europe has caught up with the bottom end of western Europe.  The Czech Republic has GDP per capita (PPP) higher than Greece or Portugal, with Slovakia, Estonia and Poland akin to that of Portugal.   Most of the others are not far behind that.

They had decades of the kind of economics the National Union of Miners supported, and it destroyed them. Their virtually useless industries were then destroyed and they rebuilt industries and businesses from scratch, with a positive attitude, a first class work ethic and none of the dependency culture, blaming and moaning that is characteristic of much of post-industrial Britain.

For Poles, Czechs, Hungarians could all have blamed the USSR, later Russia, for destroying them.  Had Stalin not decided the end of World War 2 was a chance to drape half of Europe with his soulless dark totalitarianism, then they would all have economies at the same level as much of western Europe.  They could have harboured intergenerational hatred of Russians, they could even have blamed Gorbachev for coming along, and setting them free and destroying their safe jobs.   Yet they don't.  Was it because the alternative was not to sit around on welfare watching TV and going to the pub to moan about politics, but to have nothing?

Today you'll find plenty in eastern Europe who acknowledge that under socialism, life was safe, but grim, oppressive, tedious and going nowhere.  Few are prepared to hark back to those times, fewer blame Gorbachev or other politicians at the time for freeing them.

Yet in Liverpool , Glasgow, Durham, Sheffield so many harbour venal resentment, and so many blame the current stagnation and relative decline of those cities on Thatcher.  None think that it was ever their responsibility to rebuilt their economies, to start up new businesses, to be entrepreneurial.

What a contrast.

From the late 1940s to 1989, entrepreneurship was illegal in eastern Europe. With the exception of a few minor craft businesses and some retail outlets, virtually all business was state owned.  Nobody could ever think of setting up a new business anywhere at all, indeed suggesting such a thing would put you at risk of surveillance by the secret police.  In the less oppressive states you'd get a warning that it isn't a good idea, in more oppressive ones (like Romania led by Nicolae Ceausescu, knighted under a Labour government in 1978) you'd get taken away, tortured in prison and find life a lot more difficult from then.  Entrepreneurship was opposed and considered evil.  Yet now it flourishes.

Never in Britain was it remotely as oppressive as it was in eastern Europe, but a culture of entrepreneurship seems rather vacant in post-industrial Britain.  Instead there is a culture of dependency.  As if the men who lost their relatively menial jobs could only ever wait for someone else to employ them, none of them having the inspiration or wherewithal to employ themselves.  The government didn't impose that, the community did.

It is a self perpetuating cycle though.  That culture depresses and oppresses.  Those who do have a sense of individual spirit to get somewhere simply leave, they move to one of the bigger cities, inevitably south and often to London.  They add to the GDP of the cities that welcome such attitudes, and take that little bit away from those that reject them

In retrospect, it is hard to see what could have been done to prevent that.  Certainly Thatcher did relatively little to wean education out of the hands of the Marxist teaching unions, and promote diversity in education which may have helped.  It may also have helped to set up vast areas as true enterprise zones, completely absent of almost all taxation, with planning laws reduced to private property rights only, giving them a kick start by exposing them to true free market capitalism.   However, you can lead a horse to water and all that.

It's a damning legacy of the British left that it maintains the rhetoric against Thatcher and maintaining the scapegoat of her reforms as the reason why a whole generation in certain areas have done nothing with their lives.  Much of Europe turned around economies damaged far more thoroughly by socialism and the collapse of socialist industries than the north of the UK or Scotland. 

The millstone of past glorious heavy industries needs to be removed from the "collective consciousness" (for that is what it is promoted as) of much of the East Midlands, the North, Scotland and Wales.  

You've not been that hard done by, relatively speaking, to much of the world. Stop blaming those who have long past from power and start taking responsibility for your own lives.

You don't see Poles, Czechs, Latvians, Slovaks and Romanians moaning and whinging endlessly about how hard done by they were by Stalin, Khrushchev and Brezhnev on one hand, and by the politicians they elected that destroyed their bankrupt economic "bases" on the other.

Can't those in the North of the UK move on?


  1. Excellent post. The difference is the countries of Eastern Europe, with the exception of eastern Germany, did not have comprehensive welfare to fall back on.

  2. Communism ended in Eastern Europe - but has not ended in the "Welfare West".

    Comprehensive measures of freedom show that most people were more free in communist Hungary or Poland, able to smoke, drink, burn wood and coal, an live in many ways how they liked - then they are in the nanny state welfare west

    Marxism has been destroyed everywhere execept in the Welfare West - Western Europe, UK, Canada, Aus & NZ. In spite of Maggie's best efforts, the UK remains a communist country today.