From England over the past couple of days come images of angry demonstrators celebrating the death of Lady Thatcher. Here is an example:
I just don't understand the thinking. Clearly, these people disagree with the Thatcher economic program. But just what is the economic program that they advocate that will not lead to economic decline?
Let's have a review of the bidding. For better or worse, I am old enough to remember the late 60s and 70s, and the situation in the UK at that time. From 1964 to Thatcher's election in 1979, the UK was governed by a series of Labor/socialist governments, with the exception of a stretch of about four years from 1970 - 74 under Tory leader Edward Heath, who wasn't much different from Labor. Much of Britain's economy at that time was nationalized -- the steel industry, the telecom industry, the defense industry, much of the auto industry. Government spending increased dramatically as a percent of GDP. Labor unions had favored status in the economy, and strikes were rampant. The government repeatedly tried Keynesian so-called "stimulus" programs, only to see the economy stagnate. Inflation took off, and the government, rather than recognizing it as a monetary phenomenon, attempted to control it with what was called an "incomes policy," otherwise known as price controls.
And how did that all work out in economic performance? According to a BBC summary of the period of the 60s and 70s, "Virtually all European countries, except for Britain, had so-called 'economic miracles.' Britain was often described as the 'sick man of Europe.'" According to Wikipedia, the UK's economic growth for the period was about half that of Germany and France. Wikipedia refers to the late 70s in the UK as a period of "extreme industrial strife along with rising inflation and unemployment."
And then came Thatcher in 1979. What were the new policies? From the same Wikipedia summary, they included monetary policies to reduce inflation, cuts to government spending, extensive privatization of previously nationalized industry, and confrontation with the labor unions. The immediate result was a sharp contraction from 1980 to 1982. But then the economy started to grow strongly. By the late 1980s the UK "saw [annual] growth of over 4%," leading to "contemporary claims of a British 'economic miracle.'"
I don't know of any way of looking at the UK's economic history for the period of the 60s through the 80s without recognizing that the policies of the governments preceding Thatcher had led to economic stagnation and decline, and then Thatcher's policies led to revival and growth. It's easy to learn from study of the UK during that period what works and does not work in economic policy. Doesn't work: high government spending, Keynesian "stimulus," price controls, nationalized industries, encouragement of labor unions. Works: lower government spending, control of inflation through monetary policy, privatization, limits on labor union power.
So I return to my question: What is the economic program advocated by these people celebrating the death of Thatcher? Return to socialism and price controls? And why the anger? Perhaps because Lady Thatcher, by drawing such a clear distinction between her policies and those of her predecessors, and by getting such spectacular results so quickly, made it so abundantly clear what works and what does not. But the problem here is that the results of that experiment are long in, and the demonstrators must know that the program of high government spending and unionism is one that leads to stagnant incomes, a particular problem for the struggling working class. Why are they advocating for that result? Or are they really totally ignorant of the economic history of such a recent period?