First principles on wealth and economic growth

Shanghai – Before and after

In all human history there have been just four ways of securing the goods, services, or the wealth to purchase them, required to maintain life or a desired standard of living.

First, we can receive them freely from others as gifts or charity. Second, we can take them from others as theft or tax. Third, we can borrow them from others with the promise of repayment in the future. And fourth, we can receive them freely in exchange for a good and service we provide in return.

It is clear that the first and second methods depend entirely on someone else producing the good or service in the first place. You cannot be gifted or steal what doesn’t exist. These methods are purely redistributive and add nothing to the available stock of goods and services, the increase of which is the essence of economic growth and increasing wealth.

Method three, borrowing, is fine as long as it is used for investment to increase the stock of goods and services out of which it will be repaid. The fourth method, free production and exchange, is best of all. People secure the goods and services needed or desired by exchanging those they produce for those produced by others. People’s desire to consume more induces them to produce more. The stock of goods and services available, society’s wealth, increases.

All societies engage in a mixture of these methods, different sections of those societies relying on different methods at different times. But it is clear that societies which rely to a greater extent on the first and second method are, at best, shuffling round a stagnant stock of goods; not creating wealth but merely redistributing it.

Societies using more of the third method could be acting wisely if they are borrowing to invest, but if they are just borrowing to fund current consumption then they will be paying this back out of the same (or smaller) stock in the future. Societies more reliant on the fourth method will be increasing their wealth unambiguously.

So we can say that if the aim of society is to increase wealth it ought to be utilising lots of the fourth method, the third method only to fund investment, and the first second method as little as possible.

This throws stark light on the shift in relative wealth going on in the world today. Wealth is increasing in Asia in part because relatively large proportions of their populations are producing things people want to buy. And, in part, the wealth of the western economies is stagnating or declining because, relatively, we have a greater share of our populations receiving the goods and services they need and desire (or the wealth to purchase them) as transfers from others. We see ever more borrowing to finance current spending and ever more redistribution of wealth at the expense of its creation.

If a country has a great many goods and services available it is wealthy. If individuals are able to command a great deal of goods and services they are wealthy. The nature of increased wealth is an increased number of goods and services. The more people we have producing them and increasing this number, as in Asia, the wealthier we will be.

This article originally appeared at The Commentator

The truth about Thatcher and the steel industry

There’s an old saying: “A lie told often enough becomes the truth”. It’s one ‘comedian’ and former Socialist Workers Party member Mark Steel should know well, it comes from Lenin after all, and he certainly seems to be taking it to heart.

Steel’s recent piece for The Independent is titled ‘You can’t just shut us up now that Margaret Thatcher’s dead’. Oh, that we could! Steel has, after all, built a career out of the sort of dated, unamusing jokes about Thatcher that guarantee you steady work at the BBC. Personally I don’t know why the Indy hasn’t given Tim Vine column inches to opine on deindustrialisation, at least he’s funny.

And it wasn’t long before Steel broke out the Big Lie: “in 1980 Margaret Thatcher’s government shut down most of the steel industry, as part of her plan to break the unions”. You hear this argument a lot, as though repeating it will make it true. But a look at the facts shows that it isn’t.

In 1955 the British steel industry was working at 98 percent of capacity. But, over the following years, this declined as a result of its failure to adopt new methods (such as the basic oxygen steel-making process and continuous casting) and increased steel production in other countries. By 1966 just 79 percent of capacity was being utilised.

The following year a large chunk of the British steel industry was renationalised (it had been nationalised for a few years in the early 1950s). In 1970 the new British Steel had a record output of 23.8 million tonnes (4.7 percent of the world total, down from 25 percent in 1929).

But the industry was now being run for political rather than economic ends and massive over-manning and consequent low productivity became endemic. By 1977 output had actually fallen to 20 million tonnes (3 percent of the world total). By 1978 British Steel was operating at just two-thirds capacity. And by 1979, British steel workers were a third less productive than their French competitors and 40 percent less productive than West German steel workers.

In the fiscal year 1978-1979 British Steel lost £309 million. This rose to £545 million the following year, one in which workers struck for six weeks for a 20 percent pay rise. They got it, but my dad, who worked in a steel works in Sheffield at the time, said that by the time they went back to work their foreign customers had gone elsewhere.

In 1980-1981, British Steel lost a staggering £1 billion on turnover of £3 billion, earning itself a place in the Guinness Book of Records. By contrast the output of Britain’s small private sector steel industry doubled between 1967 and 1979, from 3 million tonnes to 6 million tonnes.

Between 1967 and 1974 employment in the British steel industry fell from 250,000 to 197,000. And by 1990 it had fallen again by 74 percent to 51,000. But other developed countries also saw drastic declines in employment in their steel industries in the same period. In France, for example, employment fell by 70 percent, while in the United States it fell by 60 percent. Even Germany lost 46 percent of its steel workforce.

What happened to towns like Sheffield or Corby was not part of some Thatcherite vendetta and instead was part of a general trend across the industrialised world. It happened in the Rhur Valley and Ohio, was Maggie Thatcher responsible for that too?

And given that the British steel industry’s problem was chronic over-manning, which caused low productivity, it is, sadly, fantasy to suggest that there was some painless cure that didn’t involve a reduction in employment.

Indeed, in the following years British Steel recovered. Whereas in 1976-1977 it had taken a British steelworker 15 man hours to produce a tonne of liquid steel, by 1986-1987 it took just 6.2 man hours and that year British Steel turned a profit of £177 million on turnover of £3.5 billion. When the company was privatised the following year it had made a profit of £410 million on turnover of £4.1 billion. By 1997 British Steel was the most profitable integrated steel company on the planet.

So British Steel was not shut down by Thatcher “as part of her plan to break the unions”; it was privatised because it was an economic basket case. Like the coal industry it was dying by the time she got elected.

This is the truth behind the Big Lie. That industries like steel and coal were ravaged is true. That it was painful for those involved is also true. But that it happened simply because Margaret Thatcher wanted to “break the unions” is false.

But maybe I’m missing the point with all this. That was certainly the opinion of some people I spoke with recently when I explained the advanced state of decrepitude the coal industry was in when Thatcher took over. “Oooooooh facts and figures. Go on then, how many miles have you walked in pit boots?” said one. Another said I was “someone who tries to hide behind certain facts and figures without giving the whole truth of the situation”.

It’s a curious argument to suggest one can get a better view of “the whole truth of the situation” by walking around in “pit boots” rather than looking at the entire industry and the economy as a whole. But then these people were from an area heavily affected by all this. For some the strength of that experience, reinforced by repetition over the years, has compromised their ability to examine the issue rationally. This is not to ignore what they say; experience is valid and should be recorded as such, but it should not be mistaken for analysis.

Perhaps Mark Steel isn’t being deliberately dishonest and this applies to him too. I’ve no idea and little inclination to find out. But you can’t blame a guy who trades on hating Margaret Thatcher for giving his routine one last airing. After all, when Maggie Thatcher died so did half of Mark Steel’s act.

I am indebted to the article ‘The British Iron and Steel Industry Since 1945’ by Alasdair M. Blair

This article originally appeared at The Commentator

Britain’s productivity paradox

In 2012 the British economy created 580,000 new jobs yet output stagnated; more work produced the same amount of stuff. Indeed, British workers were producing 2.6 percent per hour less in Q3 2012 than in Q1 2008. Labour productivity is now 12.8 percent below its pre-recession trend.

This phenomenon, of increasing inputs producing an unchanged or decreasing amount of output, which has been christened Britain’s ‘productivity puzzle’, is one of the most perplexing in current economic debate. Indeed, even Nobel laureate Paul Krugman recently declared himself stumped.  

It’s an important debate both politically and economically. Politically, because Labour can point to grim GDP figures and claim the coalition is failing while the coalition can point to impressive job growth and claim they are succeeding. Economically, because increasing productivity, producing as much with less or more with as much, is the root of increasing wealth.

The Institute for Fiscal Studies recently offered three explanations for this decline in labour productivity. First, the fall in real wages thanks to inflation has seen firms retain and/or take on more labour. Second, business investment remains 16 percent below the pre-crash peak giving workers fewer tools to work with. Third, record low interest rates and forbearance on the part of banks is propping up inefficient enterprises.

There is a grain of truth in all these explanations but we might be missing the wood for the trees. Perhaps the actual explanation for the productivity puzzle is both simpler and more profound. Labour productivity is determined by two things: the skill of labour, and the quantity and quality of the capital at the disposal of that labour. On both fronts Britain has done pretty poorly.

Britain’s labour force is losing its qualitative advantage over others, notably in East Asia, thanks to a hideously dysfunctional state education system. According to the Programme for International Student Assessment which compares students across countries, in 2000 Britain ranked 7th in reading, 8th in maths and 4th in science. By 2008 it had slumped to 17th in reading, 24th in maths, and 14th in science. Any measures which can improve this dismal performance could be expected to improve British labour productivity in the longer term.

It is a similar story regarding the capital available to its workers. In 2001 it was estimated that a British worker had 25 percent less capital to work with than an American worker, 40 percent less than a French worker, and 60 percent less than a German worker. Why is capital so vital and how might we get more of it?

There are two types of goods: capital goods and consumption goods. Consumption goods are those that immediately meet our needs, what Carl Menger called “goods of first order”. Capital goods, what Menger called “goods of higher order”, are those which meet our needs indirectly. Bread is a consumption good, the flour and the milling stone (among others) are capital goods.

If our need is to eat we can satisfy it immediately via the labour intensive method of picking apples from trees or berries from bushes. Obviously this source of food would sustain very many less people on much more monotonous diets than we have today. We are able to eat more and better because we have capital which enables us not only to produce and consume more but also to produce and consume things we couldn’t have before with purely labour intensive methods.

Thus, to borrow Murray Rothbard’s example, Robinson Crusoe could pick 20 berries per hour from a bush by hand but could shake 50 berries out in an hour with a stick. Alternatively Crusoe could make the milling stone, grind the flour, and undertake the other capital production needed to make a loaf of bread. He could enjoy something he couldn’t enjoy in any quantity at all previously.

But making the stick or the milling stone will take time, time we cannot spend either picking berries or relaxing. We must forgo an act of consumption, either of berries or of leisure. We must save, in other words. This is the essential truth of capital accumulation; it comes from saving.

So does maintenance of the capital stock. To borrow from Rothbard again, a truck with a working life of fifteen years which makes 3,000 trips can be said to be using up 1/3,000 of itself each time it participates in the transformation of bread from ‘higher order’ wholesale to ‘first order’ sandwich. If saving is not undertaken to allow for the replacement of the truck at the end of the fifteen years this production process will cease. The capital, the truck, will have been consumed in every loaf it carried on those 3,000 journeys.

This is why countries that grow rich are those that save; they accumulate the capital per worker which enables them to produce ever greater amounts. In the late 18^th century British textile workers earned six times what Indian textile workers earned because they had the capital goods to make them six times more productive. This is why we see saving nations in the Far East becoming wealthier as we wonder how our current standard of living will be maintained.

Britain, meanwhile, has some of the lowest savings rates even in the generally savings-averse developed world. We are seemingly attached to the Keynesian idea that consumption, rather than something we do when we are rich, is something we do to become rich. We have a government which can hand out leaflets on budget day telling savers they are on their side while turning a blind eye to quantitative easing and 0.5 percent base rates.

The result is that by deskilling and capital consumption we have become a lower productivity, lower wage economy. There is only a puzzle because we are reluctant to face this grim truth. Greece was recently reclassified as an emerging market. Might Britain be on its way to joining her?    

This article originally appeared at The Commentator

William Burroughs

Last week would have been the 99th birthday of William Burroughs. A great writer (in patches) and a key member of the Beat Generation Burroughs was also infamous for killing his wife, apparently accidentally, in a drunken reenactment of the old William Tell trick but with a pistol.

I loved all things Beat Generation as a teenager but it’s difficult, looking at it now, not to feel sorry for the women like Joan Burroughs who were caught up in it. None of them achieved the artistic success of the men, Burroughs, Jack Kerouac, or Allen Ginsberg. Reading Kerouac’s books now you wonder if that wasn’t because they were too busy doing all the cooking and cleaning for their oh-so-creative menfolk. The women in Beat novels are generally maids or whores, preferably some convenient combination of both. Those who aren’t, who want something more for themselves and the children the Beat writers occasionally father (and generally abandoned) come out of the Beat novels as pushy harridans cramping the guy’s creative style.

So, as I got older, one of my favourite pieces of Beat writing became Allen Ginsberg’s poem Dream Record: June 8, 1955. It is one of the few looks at and acknowledgements of the women behind the Beat Generation, who fed and watered the men, almost always anonymously and often at great cost. I figured Joan Burroughs “leaning forward in a garden chair, arms on her knees” deserved remembering today just as much as the famous man who killed her.

A drunken night in my house with a

boy, San Francisco: I lay asleep.

darkness:

 

    I went back to Mexico City

and saw Joan Burroughs leaning

forward in a garden chair, arms

on her knees. She studied me with

clear eyes and downcast smile, her

face restored to a fine beauty

tequila and salt had made strange

before the bullet in her brow.

 

      We talked of life since then.

Well, what’s Burroughs doing now?

Bill on Earth, he’s in North Africa.

Oh, and Kerouac still jumps

with the same beat genius as before,

notebooks filled with Buddha.

I hope he makes it, she laughed.

Is Huncke still in the can? No,

last time I saw him on Times Square.

And how is Kenney? Married, drunk

and golden in the East. You? New

loves in the West–

 

      Then I knew

she was a dream: and questioned her

–Joan, what kind of knowledge have

the dead? can you still love

your mortal acquaintances?

What do you remember of us?

 

      She faded in front of me–The next instant

I saw her rain-stained tombstone

rear an illegible epitaph

under the gnarled branch of a small

tree in the wild grass

of an unvisited garden in Mexico.

- Allen Ginsberg

This article originally appeared at Middlebrow Magazine

Three questions about North Korea

Kim Jong-il, former leader of North Korea and, since his death in 2011, Eternal General Secretary of the Worker’s Party of Korea, was generally considered a wily, if oppressive, old fox. When, inevitably, North Korea’s communist economics periodically led to famine, Kim II would rattle his sabre just enough to prod the West to buy him off with a little aid. As weird as he might have looked and as twisted as the society he ruled may have been, Kim II could be seen in this light as a rational actor on the diplomatic stage.

As his successor, his equally funny-looking son Kim Jong-un, engages in a prolonged and particularly bellicose bout of belligerence, the first question is whether that assessment also applies to him. Is Kim III a cynic or a lunatic?

It’s a question we can ask about North Korea more generally. When Kim II died in December 2011 many in the West giggled at the bizarre scenes of hysterical grief among the citizenry captured on camera and beamed around the world. Surely, we thought as we saw North Koreans bashing themselves over their heads and howling, they were doing it for the benefit of the gun-toting guards just out of shot. Maybe they were. But there’s a scarier possibility: they actually meant it.

North Korea, not Sweden, is the ultimate welfare state; no government promises to be so all-encompassing in providing for its people. Beyond its borders, so North Koreans are constantly told from birth, lie Yankee Imperialists and their Japanese and South Korean lackeys who are hell-bent on crushing North Korea and liquidating its people. The state, controlled by the Workers Party of Korea, and headed by Chairman of the Central Military Commission, Supreme Commander of the Korean People’s Army, First Chairman of the National Defence Commission, First Secretary of the Worker’s Party of Korea, and Supreme Leader Kim Jong-un (ably assisted by his dead father and grandfather who is Eternal President of the Republic), is all the protects them from annihilation.

North Koreans also depend on the beneficence of the State, Party, and Supreme Leader for their daily bread. From the moment they are born they are taught that they are clothed, fed, and housed at the “grace of the Chairman”. The state is the only guarantor of the welfare of North Koreans, from cradle to mass grave.

So to the average North Korean the death of Kim II probably did represent a calamity of existential proportions. These are people who have been reduced to a state of total, helpless, physical and psychological dependence on the unholy trinity of State, Party, and Leader which, like the Holy trinity, are actually all the same thing. North Koreans were suddenly faced with what they had been told was impossible, life without the Supreme Leader, and, like dependents everywhere, they collapsed mentally.

Whether Kim III is cynic or lunatic, the key to dealing with him lies with China. Without Chinese military intervention in the Korean War in 1950 North Korea would have been strangled at birth. Mao Tse Tung called the relationship between the two countries “as close as lips and teeth” and it is widely thought that what passes for North Korea’s economy is entirely dependent on Chinese aid.

If this is so, China can flick the switch on Pyongyang’s life support whenever it likes. And, if that is so, you have to wonder why they don’t, why they continue to tolerate North Korea’s behaviour.

A North Korea which is pliant to Beijing but plausibly dangerous to everyone else could actually work quite well for the Chinese. If the United States ever feels compelled to resolve the North Korean issue with a degree of finality it will need Chinese assistance or, at the very least, approval. The more dangerous North Korea is deemed to be the more Beijing can ask in return for giving it up. Is it a coincidence that North Korea is kicking off just as tension mounts between China and Japan?

This, however, all hinges on the answer to the second question: how much control does the regime in Beijing have over the regime in Pyongyang? It’s possible the answer is none or less than we think and that North Korea truly is a rogue state. Then we return to the first question: is its leader cynic or lunatic?

Either way the road to Pyongyang runs through Beijing. The third question is what will be the toll?

This article originally appeared at The Commentator

In defence of Reinhart and Rogoff

Facepalm, as they say

Academic economic papers rarely receive the sort of mass reception that brings coverage in the Guardian and the Telegraph so by the standards of its field ‘Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff’ was something of a blockbuster.

The eponymous Carmen Reinhart and Kenneth Rogoff are economists who, in a 2010 paper,  ‘Growth In a Time of Debt‘ found that “whereas the link between growth and debt seems relatively weak at ‘normal’ debt levels, median growth rates for countries with public debt over roughly 90 percent of GDP are about one percent lower than otherwise; (mean) growth rates are several percent lower.”

These results, fleshed out to book length for the successful ‘This Time Is Different’, have been quoted by George Osborne, Paul Ryan, and Olli Rehn in support of their measures to get spiralling government debts under control.

Last week’s paper by Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts Amherst claimed to have proved this wrong. They had recreated Reinhart and Rogoff’s results and found that the pair had reached their figure of a GDP ‘growth’ rate of -0.1 percent per annum for economies with government debt of over 90 percent of GDP thanks to “coding errors, selective exclusion of available data, and unconventional weighting of summary statistics.” Most embarrassingly, the ‘coding error’ was a proper schoolboy error; Reinhart and Rogoff missed some of the numbers out of their calculations.

In truth the idea that there was an Iron Law such that an economy would shrink as soon as it’s government debt hit 90 percent of GDP, the ‘strong form’ of Reinhart and Rogoff (pushed more by the political practitioners than them it ought to be said), was always iffy. It smacks of the sort of bogus causation derived from correlation which is the basis for much modern macroeconomics.

There are, for example, different types of debt. Advocates of higher spending often point to the 260 percent of GDP the British government owed in 1816, the 180 percent it owed in 1919, or the 220 percent it owed in 1945. This, they tell you, proves that Britain’s economy can bear an even greater burden of debt than the 70 percent of GDP it has doubled to in the last five years.

But you don’t have to be David Starkey to know that in 1816, 1919, and 1945 Britain had run up that debt to pay the cost of defeating a tyrant and as soon as that was done we stopped. It was an expense we had to meet and defray over time, the wartime borrowing was classic ‘consumption smoothing’.

To put it another way, when the British government started spending heavily in 1792, 1914, or 1939 there was a definite endgame for this spending: the restoration of the Bourbon monarchy, the defeat of the Kaiser, the overthrow of Hitler. The very moment those goals were accomplished spending would fall rapidly.

Our current level of government spending, by contrast, is not being undertaken to safeguard this country and its neighbours from conquest but to maintain a public sector and welfare state grown fat on borrowing and tax revenue from an unsustainable bubble in the absence of that bubble and those tax revenues. We are not smoothing consumption, we are sucking it out of tomorrow. And, unlike Pitt the Younger, Herbert Asquith, or Neville Chamberlain, present day advocates of higher spending cannot give an endgame for their proposed accrual of debt.

The point of this for evaluating Reinhart and Rogoff’s work is to note that one load of debt is not necessarily the same as another. There ought to be a little nuance to the picture, there are no magic numbers.

But even with that said it can still be argued that Reinhart and Rogoff have been hard done to this last week. They are, as they say in ‘This Time Is Different’, involved in the on-going process of growing their data set (which, rather unwisely, they have been quite proprietary about) and since 2010 they have revised their conclusions in the light of new data which Herndon, Ash, and Pollin had access to.

As Reinhart and Rogoff wrote in the Wall Street Journal, in a 2012 paper with Vincent Reinhart they found GDP growth rates of 2.4 percent for economies with government debt over 90 percent of GDP, pretty close to the 2.2 percent calculated by Herndon, Ash, and Pollin.

Indeed, and despite what some excitable commentators have proclaimed, Herndon, Ash, and Pollin have not found no correlation between high debt and low growth. They have found a weaker one than Reinhart and Rogoff in 2010 and about the same as they found in 2012, but they have still found one.

As page 21 of their paper states: if debt is below 30 percent GDP growth comes in at 4.2 percent, if debt is between 30 percent and 60 percent of GDP growth comes in at 3.1 percent, if debt is between 60 percent and 90 percent of GDP growth comes in at 3.2 percent, and if debt is over 90 percent of GDP growth comes in at 2.2 percent. Even on Herndon, Ash, and Pollin’s figures higher debt is correlated with lower GDP growth.

And there is perhaps a more profound point to note. Reinhart and Rogoff have fessed up to the coding error but the “selective exclusion of available data, and unconventional weighting of summary statistics” which Herndon, Ash, and Pollin accuse them of is, in fact, the very stuff of modern macroeconomics.

The ‘facts’ which dominate and guide our economic lives such as GDP, the CPI, or even unemployment, are not objectively given but are constructed using just such subjective methods, a prime example are the nonsensical unemployment figures of the United States. If this furore provokes a little scepticism so much the better, but it should spread much further than one paper.

This article originally appeared at The Commentator

Party over? It never got started

The lady’s not for burning

I was wrong.

It does a man good to say that once in a while, so there you go.

Coming from Sheffield I’d always heard that when Margaret Thatcher died “they’ll have to install a turnstile in the graveyard due to the amount of people entering it with their dancing shoes on”. Then came the internet.

The Facebook page ‘We’re having a party when Thatcher dies‘ has over 6,000 likes and another, ‘Is Margaret Thatcher Dead Yet?‘, has nearly 40,000. Given this I’d come to think that the day after Lady T popped her clogs I’d be picking my way to the tube station in the morning stepping over people passed out in party hats. I wrote that “people in places like Sheffield will be celebrating Margaret Thatcher’s death”, even that “the streets of Sheffield will flow with ale.”

And they didn’t. Instead 800 trouble makers, that’s 800 nationwide, many of whom wouldn’t have known Maggie Thatcher from Teri Hatcher, smashed some stuff up.

In Brixton ‘revellers’ trashed a branch of that well known exploiter of the workers, Barnardo’s. Last weekend saw a party in Trafalgar Square which, especially given the anticipation over the years, was a total washout. The revellers brought an effigy but couldn’t manage to set it on fire prompting the wonderful observation: “The lady was not for burning.” And Sheffield was quiet.

I should have suspected that the promises of wild celebrations were overdone. After all, I’ve written before about how Thatcher is actually the most popular post war British prime minister. The Guardian reported that “On the day of her death, half of all respondents, 50%, told the pollster that they look back on her contribution as a positive one for Britain. That is 16 points more than the 34% who say she was bad for the country.” (Ouch, that must have hurt!)

A YouGov poll found that “Opinion gradually becomes less positive as you go northwards, but not drastically so – even in the North 49% have a positive opinion of Thatcher, 35% negative.”  28 percent regarded Thatcher as a “good Prime Minister” and 21 percent as a “great Prime Minister” (the best laugh I had all week was a northern leftie I know explaining that these people meant great in the sense of important, not ‘really good’). The finding is repeated across the country, according to YouGov “Only in Scotland is the balance of opinion negative”.

The YouGov poll found that Thatcher is regarded as “the greatest British Prime Minister since 1945″ in every region except Scotland and London where she is pipped by another Conservative, Winston Churchill. It also found that in every region except Scotland more thought that “Margaret Thatcher’s period as Prime Minister” had been “Good for Britain” than thought it had been “Bad for Britain”.

Again, in every region except Scotland more thought that Thatcher’s period as Prime Minister had left Britain “Economically better off”. In every region the most popular view was that she had left Britain “More respected in the world” and a place with “More opportunities for women”.

In the Commons Glenda Jackson blustered “A woman? Not on my terms!” But then the question of whether you’re a woman isn’t decided on Glenda Jackson’s terms and, as the YouGov poll also found, most women disagree with her: 51 percent of women said that Thatcher left Britain a country with “More opportunities for women” against just 14 percent saying “less”.

There was some mixture in the picture. In every region the dominant view was that Thatcher had made Britain a “Less equal society”. This is undeniable. People at the top got very much better off and people in the middle got a bit better off but people at the bottom also got better off, just not by very much. When Simon Hughes put this charge to her in her bravura farewell performance as Prime Minister in November 1990 Thatcher replied:

“People on all levels of income are better off than they were in 1979. The hon. Gentleman is saying that he would rather that the poor were poorer, provided that the rich were less rich. That way one will never create the wealth for better social services, as we have. What a policy. Yes, he would rather have the poor poorer, provided that the rich were less rich. That is the Liberal policy.”

As I wrote last week: “Those who profess to hate Thatcher have committed the error of taking something they believe (or claim to, I’m not convinced many of them are actually serious), repeating it loudly and often to other people who also believe it, and assuming from this fusillade of confirmation that everyone else thinks it as well”

It would be wrong to say that there aren’t people out there who deeply loathe Thatcher and all she stood for. But it certainly seems that my friend’s dance floor won’t need waxing so often.

This article originally appeared at The Commentator

Pounds and pence

This meme popped up on my timeline yesterday…

I’m not a fan of state spending generally but I have found it rather difficult to get my knickers in a twist about the cost of Maggie Thatcher’s funeral. Not because I liked her, I did, but because of things like the fact that

“Trade unions received £85.8 million from public sector organisations in 2009-10. That is made up of £18.3 million in direct payments from public sector organisations and an estimated £67.5 million in paid staff time.

The total is up 14 per cent from 2008-09, when trade unions received £76.1 million from public sector organisations.

Direct payments include a total of £13.0 million in 2008-09 and £14.9 million in 2009-10 paid by the Department for Business, Innovation and Skills through the Union Learning Fund and the Union Modernisation Fund.

2,493 full time equivalent public sector employees worked for trade unions at the taxpayers’ expense in 2009-10.”

So, going back to the meme, £10 million could buy 1,190 nurses, 1,411 teachers, or 2,040 soldiers, or it could buy 2,493 union jobsworths.

Welcome to public sector Britain.

The left hated Thatcher because she thrashed them

Margaret Thatcher, 1925 – 2013

On Gee Street in London there is a Stafford Cripps House named after the post war Labour Chancellor. In Fulham there is also a Stafford Cripps House which contains a Clement Atlee Court named after his boss. In East London there is the Kier Hardie Estate, named after the first Independent Labour MP. In Clapton there is a Nye Bevan Estate named after the former Labour minister.

So I was baffled when, today, my various inboxes, feeds, and walls were swamped by left wing friends asking how bothered I was by the passing of Margaret Thatcher. One or two seemed rather put out when I responded that I wasn’t massively. As someone who could be considered a ‘Thatcherite’ I believe in the individual not an individual. I’ll leave the veneration of Dear Leaders to the left with their crumbling municipal buildings.

At 87 Margaret Thatcher lived a long life. Insofar as we can tell about the private life of this most resolutely political of people it was also a rather happy one. The daughter of a provincial, middle class shopkeeper, born during the Depression, she went to Oxford, became a chemist, and then became a lawyer. Elected to Parliament in 1959 after a decade of trying she rose against incredible odds to become the first female leader of a major British political party in 1975 and Britain’s first female Prime Minister in 1979. She was accompanied every step of the way by her beloved husband Denis.

Her period in office was marked by internal division and conflict of a degree not seen under any other prime minister of the century. Thatcher took on the Labour Party (three times), the Argentines, the National Union of Mineworkers, and crushed them all. By the time Thatcher left office even the Soviet Union and its miserable communism were history.

But in 1988 Thatcher gave her famous Bruges Speech in which she stated “We have not successfully rolled back the frontiers of the state in Britain, only to see them re-imposed at a European level with a European super-state exercising a new dominance from Brussels.” For the European federalists, including many in the Conservative Party close to Thatcher’s predecessor Ted Heath who had never forgiven the grocers daughter for beating the grocer, this was a step too far.

In 1990 Thatcher was finally brought down, not by a bunch of troublemakers rioting in Trafalgar Square, but by her own Europhile backbenchers, angered by her refusal to sign up to a single European currency. History has proved Thatcher emphatically right.

She brooded on this betrayal in retirement but, judging by her memoirs, she was fully aware of just what she had helped achieve, even if she was typically modest about it. She had taken Britain from an increasingly chaotic, sclerotic, and socialist place, to a place which was on the up again. Internationally she had restored some of Britain’s old standing and seen off the communist threat.

Both in Britain and abroad, with the help of her great ally Ronald Reagan among others, she had shown that the inevitable, onward march of socialism was nothing of the kind.

And, perhaps most uncomfortably for her detractors, she was popular and remains so. She won three elections on the trot. In 2011 a YouGov poll for The Sunday Times placed her firmly at the top of a list of post-war British prime ministers with a whopping 27 percent, more even than Winston Churchill.

The sainted Clement Atlee, architect of the welfare state, nationaliser of industries, and namesake of a court in Fulham, limped home with just 5 percent of the vote behind Tony Blair and, mysteriously, Harold Wilson. The much-vaunted street parties celebrating her demise might be rather more thinly attended than the guests have convinced themselves.

Those who profess to hate Thatcher have committed the error of taking something they believe (or claim to, I’m not convinced many of them are actually serious), repeating it loudly and often to other people who also believe it, and assuming from this fusillade of confirmation that everyone else thinks it as well.

These people can often give you a list of reasons they hate Thatcher, lists which are often so suspiciously similar that you have to question how many are the product of original thought and how many are just being parroted to feign an opinion. Most of them, from the mass unemployment to her supposed destruction of Britain’s industry, are easily dealt with.

But the truth is that she would have been disliked intensely no matter what she did. Owen Jones wrote recently that “Thatcher hate is not kneejerk anti-Toryism, after all, there will be no champagne corks popping when John Major dies, and there was no bunting on display to celebrate the deaths of Ted Heath, Alec Douglas-Home, Harold Macmillan or Anthony Eden.”

But remember that in 1948 Nye Bevan, one of the most venerated and overrated figures in British political history, said, “No amount of cajolery, and no attempts at ethical or social  seduction, can eradicate from my heart a deep burning hatred for the Tory Party.  So far as I am concerned they are lower than vermin.”

Remember also that Bevan didn’t say that about a Conservative Party containing right wing ideologues like Thatcher, Norman Tebbit, or Keith Joseph. He said it about a Conservative Party which contained such Keynesian, welfare-state-loving, consensus-supporting politicians as Harold Macmillan, R. A. Butler, and Alec Douglas-Home.

The left disliked Thatcher because she was a Conservative. It hated her because she thrashed them.

Margaret Thatcher is one of only two British prime ministers to coin an ‘ism’ and unlike the other, Blairism, Thatcherism actually meant something. This is why whether alive or dead she will live on. Her ‘ism’ will be a much more permanent monument than the grey, decayed concrete boxes named after various Labour no marks.

This article originally appeared at The Commentator

North Korea ups the tempo…

“You press this button for a bossa nova beat…”