Margaret Thatcher and the decline of West

Margaret Thatcher’s first high-profile political job came in 1970 when she was appointed to serve as education and science minister in the cabinet of the liberal Tory Edward Heath.

She imposed a series of brutal budget cuts, the most infamous of which was the abolition of a program left over from the Great Depression, which guaranteed a daily pint of milk to schoolchildren between the ages of seven and eleven.

This was a program which had done much good in the poorer mining, industrial, and farming towns and villages of Wales, Scotland, and the north of England, where vitamin deficiency diseases like rickets and pellagra had been an immense public health problem.

But for Thatcher, that daily pint of milk was the essence of communism, a violation of the free market. The milk distributions were stopped. Since then, Thatcher has been hated by all Britons of goodwill, and since then her nickname has been “Thatcher milk snatcher.” This is the epitaph which should be inscribed on her tomb.

The Romans had a saying, “De mortuis nihil nisi bonum” - say nothing but good things about the dead. It is good advice, but in the face of certain enormous crimes against humanity, it cannot be honored. Such is the case of Margaret Thatcher.

Thatcher offers one of the most egregious cases in recent history of a sociopath in power. She can be seen as the mother, or at least as the grandmother, of the world economic depression which broke out in 2007-2008. Thatcher was a fanatical apostle of the economic theories of the Austrian school ideologue Friedrich von Hayek and especially of Hayek’s 1944 screed, The Road to Serfdom, a raving attack on the highly successful economic methods of the Franklin D. Roosevelt New Deal in the United States. On at least one occasion, Thatcher is known to have brandished a copy of Hayek’s scribblings as her personal holy book.

Hayek had started after World War I as a hack writer in the pay of rent-gouging Viennese landlords who wanted propaganda articles condemning the evils of rent control. He was considered a very marginal academic, almost a crackpot, until he attracted the attention of economic illiterate David Rockefeller, who hired Hayek to help him in cramming for exams at the London School of Economics.

Hayek, like his co-thinker Ludwig von Mises, was an exponent of the backward and primitive Austrian school of economic theory, which had been concocted by feudal-reactionary quackademics in the Habsburg empire to undercut the prestigious German-American school of dirigism and protectionism exemplified by figures like Friedrich List, one of the main inspirations for the recent economic success of places like Japan, Taiwan, and China.

For the Austrian school, any government intervention in or regulation of economic life is automatically classed as totalitarianism. The Austrian school relies on crude slogans of deregulation, privatization, and the free market. The Austrian school is sometimes called the psychological school, since it rejects as collectivist analyses which tried to grasp the broad objectivity of a national economy. The theoretical vantage point of the Austrian school is always the sociopathic urges and desires of the individual predatory speculator.

Austrianism is therefore much inferior to the deeply flawed neo-Keynesian synthesis, which tends to reproduce the outlook of central bankers. The Austrians are even more inferior in comparison to the American System, which has its central focus in the development of the modern labor force.

Before Thatcher, the strange beliefs of figures like von Mises and von Hayek - such as their demand that government must never lift a finger to prevent or mitigate a devastating economic depression - meant that they were not presentable in polite society. If an economist claimed that a pint of milk for school children was the leading edge of Bolshevism, most people concluded that such an economist needed to be committed to a mental institution. If such an economist insisted on this point, he risked being reminded that Hitler and the Nazis had been long since swept into the garbage can of history.

Margaret Thatcher changed all that. The overall impact of her political career has been a radical degradation of the universe of economic discourse of the Western world in the direction of ideas seen in the 1950s and 60s as hopelessly reactionary, or even psychotic. In this sense, Thatcher can be classed as the unifying symbol of a retrograde cultural paradigm shift, not just in Europe and the United States, but worldwide - especially when the influence of her signature monetarist/neoliberal economics on the International Monetary Fund, World Bank, and similar institutions is taken into account.

The austerity policies today ravaging Europe under the auspices of the IMF, the European Central Bank, and the European Commission would be simply unthinkable without the massive wave of economic ignorance and barbarism unleashed by Thatcher.

A Creature of Lord Victor Rothschild

The legend of Thatcher portrays her as a self-made woman, a greengrocer’s daughter from Grantham.

In reality, the emergence of Thatcher was the work of a formidable political syndicate. One of Thatcher’s most important handlers was by any measure Lord Victor Rothschild (1910-1990), the third Baron Rothschild. Lord Vic was nominally a Labour peer in the House of Lords, but much of his influence derived from his work between 1963 and 1970 as worldwide head of “research” - meaning intelligence - for Royal Dutch Shell, the policy flagship of the seven sisters oil cartel. During much of this time, Lord Vic was a key security adviser to Thatcher. For a number of years Lord Vic also ran the Central Policy Review Staff, the de facto think tank of the British government. Lord Vic was also closely associated with Sir Keith Joseph, a Tory government minister and Thatcher’s top political brain truster.

Thatcher was for many years elected to parliament from the safe Conservative seat of Finchley. However, intelligence reports from the 1980s sometimes noted that Thatcher’s hold on this rotten borough or pocket borough had been consolidated with decisive help from Lord Vic.

Thatcher’s Gurus: Sir Alfred Sherman and Sir Keith Joseph

Another key Svengali for Thatcher was Sir Alfred Sherman, who had fought as a communist volunteer in the Spanish Civil War, but had been followed the typical neocon pattern of evolution towards reactionary ideas. Sir Alfred had been a close adviser to Israeli Prime Minister David Ben-Gurion. Sherman joined with Sir Keith Joseph and Thatcher in 1974 to found the Center for Policy Studies, and soon went on to play a key role in the Conservative Philosophy Group, which elaborated the ideology later known as Thatcherism. This was basically Austrianism with adjustments for the specific conditions of 1970s Britain.

Sir Alfred facilitated Thatcher’s transformation from an obscure backbencher to shadow Prime Minister for the Tories. Thatcher paid tribute to him in 2005, recalling that “We could never have defeated socialism if it hadn’t been for Sir Alfred.” But Sherman sometimes fail to conceal the true brutality of Thatcherism. On one occasion he told a Soviet journalist, “As for the Lumpenproletariat, colored people and the Irish, let’s face it, the only way to hold them in check is to have enough well armed and properly trained police.”

Sir Alfred also helps us to understand the real relation between Thatcher and her handlers. After Thatcher had lost power, he said of her: “Lady Thatcher is great theater as long as someone else is writing her lines; she hasn’t got a clue.” And indeed, much of Thatcher’s political career can be reduced to the obsessive parroting of not more than half a dozen primitive slogans, but with devastating effect.

Sir Keith Joseph, the son of a rich Tory grandee and Lord Mayor of London, had long held that figures like Heath were not nearly reactionary enough. Indeed, Sir Keith and not Thatcher might have become prime minister for the Tories, had it not been for one fateful outburst. Reading a 1974 speech written for him by Sir Alfred Sherman, Joseph added his observation is that, as a result of teen pregnancies among the lower orders of British society, “our human stock is threatened.”

This sounded very much like Nazi eugenics, and essentially disqualified Sir Keith from ever reaching number 10 Downing Street. Instead, both Joseph and Sherman focused their energies on installing Maggie in that post. Later, Joseph would become a point man in efforts to bust the teachers’ union, levy tuition fees for higher education, and radically cut the salaries of teachers and professors. Thus the note of brutal social Darwinism announced by Sir Keith remained throughout as a constant of Thatcher. Sir Keith also pioneered deindustrialization as an active government policy. When some Tories wanted to rebuild and modernize the shipyards on the Mersey River in Liverpool, Sir Keith argued instead for a “managed rundown.” Industrial demontage was another hallmark of Thatcherism.

Another secret of Thatcher’s success was the shameless use of advertising and marketing. Some of this was copied from American methods going back to Richard Nixon, but Thatcher elevated the demagogy of mass manipulation to an entirely new level. In her 1979 and 1983 campaigns, Thatcher relied on the Saatchi and Saatchi PLC advertising agency, which had been founded by two Iraqi Jewish brothers. The Saatchis were responsible for Conservative party advertising which claimed that “Labour isn’t working.” Based on the reputation this firm acquired through a helping Thatcher to her early victories, Saatchi and Saatchi became for a time the largest advertising agency in the world. Maurice Saatchi, now a member of the House of Lords, was made the chairman of the Conservative party.

However, even with this extensive support network, it is not clear that Thatcher ever received the support of a majority of British voters. Her ceiling seems to have been between 40 and 45%, which translated into a majority in the House of Commons only because of the British “first past the post” or winner-take-all system in each election district.

Before they were willing to accept the degradation of Thatcherism, the British people had to be softened up by many years of crisis. No country suffered more from the fake 1973 oil shock than Britain. There was a period of mass strike captivity in which the British labor movement proved it could paralyze the government, but also proved that it was incapable of seizing power and solving the main problems of society. In 1974, electric current and heating were often interrupted, and conservative Prime Minister Edward Heath put the nation on a three-day week. As I wrote about this phase in Surviving the Cataclysm, “the Sick Man of Europe appeared destined to sink beneath the waters of the North Sea, with journalists asking front-page questions like ‘Is Britain Dying?’”

Thatcher Filled the Post-Keynesian Void with Barbarism

It was good luck for Thatcher and her gang that this crisis then had to be administered by the Labour Party government of James Callaghan. The crisis of British society in the middle 1970s had an ideological as well as a practical impact. As I wrote in Surviving the Cataclysm:

“this crisis is associated with the abandonment of Keynesian economics by the British Labour Party, and by extension by the center-left around the world. At the Labour Party conference of September 1976, Callaghan remarked that ‘we used to think that you could just spend your way out of a recession… I tell you, in all candor, that the option no longer exists and that in so far as it ever did exist, it only worked… by injecting bigger doses of inflation into the economy, followed by higher levels of unemployment.’ According to one British commentator, these were the ‘words which effectively buried Keynes.’ The liquidation of Keynes left the field dominated by the primitive Viennese monetarism of von Hayek and the even more primitive monetarism of Milton Friedman and his Chicago School. Callaghan himself would soon be supplanted by Thatcher.”

In this new atmosphere, Thatcher’s governing team was full of monetarists or neoliberal ideologues who could pretend to be professing a new economic theory, rather than simply repackaging a set of cruel and stupid doctrines which had been discredited in the 1930s. This applied to figures like Norman Tebbitt, Nigel Lawson, and Norman Fowler.

Keynes had recommended a mild inflation as a cure for depression. Thatcher demanded the opposite: she wanted to bring on a depression in order to cure inflation. Inflation is a complaint of the rich, who feel that the purchasing power of their cash horde is being diminished. Deflationary depression means unemployment, and this is the scourge of people who need to work for a living. Thatcher proceeded to apply the monetarist recipe with a vengeance, following Milton Friedman’s dumbed-down version of Austrianism. Since Friedman had taught that inflation is a purely monetary phenomenon, Thatcher collapsed the British money supply in a massive exercise of deflation. The value of the British pound soared, and anyone who had any debt was crushed.

Thatcher Caused the British Deflationary Depression of 1979-81

Under Callaghan, unemployment had stood at one million. Thatcher managed to double this to over 2 million in short order. It is estimated that in the early years of Thatcherism no fewer than 2 million manufacturing jobs were permanently destroyed in Britain, and the overall level of industrial production and manufacturing output was reduced by one third. The destruction of domestic export industry was helped by the grotesquely overvalued pound. But the City of London banks were able to use the overvalued pound to buy up assets all around the world at a discount. Unfortunately for Great Britain is a nation, a massive balance of payments crisis ensued.

A constant feature of Thatcherism was the desire to shift the burden of taxation from the wealthy to the middle class, working people, and the poor. This was done through the use of regressive taxation. One such regressive tax was the value-added tax or VAT, which Thatcher raised to 15%. Real unemployment is thought to have reached as many as 5 million persons during this phase.

By 1981, there were riots in Brixton near Lambeth in south London which were widely attributed to unemployment and despair. Contemporary observers had the impression that the entire social fabric of the British Isles was being destroyed. People who might feel attracted to the rhetoric of Ron Paul and Rand Paul need to be reminded that the essential program of Austro-libertarians of this ilk is precisely to induce a massive deflationary depression along the lines of Thatcher’s infamous handiwork. The goal is to shift more wealth to those who already have it.

Traditional politicians have promised to raise the standard of living like putting a chicken in every pot. Thatcher, by contrast, was able to have a homeless person living in almost every doorway in the British Isles. Recipients of social welfare payments (“the dole”) saw their benefits gouged and were put under a slave labor or workfare regime, based on earlier US models.

Some of the less radical members of the British ruling elite now began to have second thoughts about Thatcher’s ideological fanaticism. Thatcher called these figures “The Wets,” and always suggested their main issue was the resentment of leaders who had been prominent under Heath. Lord Carrington and Lord Thorneycroft went to Thatcher in 1981 and demanded that she resign, since her economic policies were manifestly a failure. Thatcher’s response was her trademark demagogy about the need to “stay the course” and her lunatic cry that “the lady’s not for turning.”

Thatcher Saved By 1982 War with Argentina

In spite of her bluster, Thatcher would not have survived much longer in office without the Falklands or Malvinas war with Argentina in the spring of 1982. There are indications that Thatcher lured the inept ruling junta in Buenos Aires into grabbing these islands in the South Atlantic. With different tactics, Argentina could probably have administered the British fleet a crushing defeat, but incompetent counsels prevailed. The British could never have taken back the islands without comprehensive logistical and other support from the United States. This was a moment of great shame for Washington, since according to John Quincy Adam’s Monroe Doctrine, these islands were an integral part of Argentina and the United States was duty bound to oppose the British aggression.

The US had also pledged to defend Argentina under the Rio Pact. But this meant nothing to General Al Haig and the somnambulist Ronald Reagan, who did everything possible to help Thatcher. Thatcher proclaimed that she had overcome the “Suez syndrome” of 1956, meaning that Britain was back as an aggressive imperialist power. Based on chauvinist hysteria around the Malvinas, Thatcher was able to win the 1983 general election, even though she got only 42.4% of the votes.

Thatcher’s foreign policy as carried out by Lord Geoffrey Howe was worthy of the mythical reactionary Colonel Blimp. Thatcher was a great admirer of the Chilean fascist Augusto Pinochet, whose Friedmanite economic policies were essentially identical to her own. She considered Nelson Mandela as a dangerous communist, and did everything possible to prevent economic sanctions from being imposed on apartheid South Africa by the British Commonwealth. This brought her into bitter conflict with Commonwealth leaders like Rajiv Gandhi of India and Mahathir Mohamad of Malaysia. But Thatcher took the lead in promoting USSR leader Mikhail Gorbachev as a man she could do business. Later, Thatcher would gloat over the destruction of Soviet power to which she had contributed.

Thatcher’s racist and jingoistic Little England foreign policy also earned her the enmity of Queen Elizabeth II, who had her vast empire to look after. When Thatcher was denied an honorary degree by Oxford, and when she was criticized by the Church of England, it is safe to assume that those two pillars of the establishment were acting according to the wishes of Buckingham Palace. A political cartoon dating back to one of Thatcher’s elections showed Queen Elizabeth as a Labour Party agitator in the streets screaming “Tories out!”

But Thatcher’s electoral fortunes were also helped by extensive bombing campaigns by the Irish Republican Army, and organization now known to have been thoroughly penetrated and decisively influenced by British intelligence. When the IRA bombed Thatcher’s hotel in Brighton in October 1984, the Iron Lady launched a new campaign of antiterrorist posturing.

But a great event of Thatcher’s second term in office was her systematic destruction of the miners’ union during the course of a one-year strike in 1984-85. By crushing the militant miners of the National Union of Mineworkers under Arthur Scargill, Thatcher was able to put the entire British labor movement permanently onto the defensive. Thatcher destroyed not only the miners’ union, but put the entire British re-privatized coal mining industry (previously nationalized between 1946 and 1987 as the National Coal Board) on the path to extinction.

Great Britain has been described as an island of coal surrounded by a sea of fish, but Thatcher’s monetarism in service to the financial parasites of the city of London basically wiped out both mining and commercial fisheries. The conclusion is that Thatcher wanted to destroy the unions as a possible platform of mass resistance against the rule of financial oligarchs, and also welcomed the end of industrial capitalists as another group who might oppose the City of London. Britain today is a postindustrial rubble field and junkyard, largely thanks to Thatcher.

Deindustrialization through Deregulation and Privatization

Throughout her time in office, Thatcher mercilessly sought to privatize British government assets, generally selling them off to wealthy Tory clients at bargain basement prices. In addition to the National Coal Board, she also returned British Telecom to the private sector, and set into motion the process which has led to the disastrous re-privatization of British Rail.

By the end of Thatcher’s term in office, when the Chunnel or tunnel under the English Channel was nearing completion, British industrial capabilities were so weak that the London government experienced tremendous difficulty in providing a short Channel Tunnel Rail Link between London and Folkstone-Dover. Observers on the continent joked that Britain from an industrial point of view had become impotent, isolated, and irrelevant.

Thatcher was unable to privatize or abolish the British National Health Service, but she did everything possible to cripple it by drastic spending cuts which cost many lives. Labour MP Glenda Jackson has commented on the tragic state of British hospitals during the Thatcher regime.

In line with her crackpot ideology, Thatcher also fomented a reckless and irresponsible process of deregulation. One of the centerpieces of this was the 1986 “Big Bang” or complete deregulation of the London financial markets. This involved a transition from open outcry trading pits to screen-based trading, but it made London the wild West for derivatives swindles. From this point on, the British regulatory regime was even weaker than the US one. But, precisely because of this lax oversight, predatory bankers, hedge fund hyenas, and other shady enterprises crowded into London, making a success of real estate developments like Canary Wharf.

Mad Cow Disease Courtesy of Thatcher

Thatcher’s deregulation push also had very sinister consequences in the intermediate run. Thatcher was convinced that British farmers were being needlessly harassed by nosy agricultural inspectors, so she slashed that form of oversight as well. In the opinion of some informed observers, the worldwide epidemic of so-called Mad Cow disease (or BSE) can be traced back to abuses which flourished under Thatcher’s practically nonexistent regulatory regime in the British beef industry. Once again, producers paid the price: exports of British beef to the European Union were banned from March 1996 to May 2006.

Like Beppe Grillo today, Thatcher also waged war against local governments she did not like because they were controlled by the Labour Party and opposed her policies. Thatcher’s campaign to destroy the Labour-dominated Greater London Council was a case in point. Thatcher alleged that these local governments were expensive playgrounds for the “loony left.” She also targeted the local governments of Manchester, Liverpool, Sheffield, Birmingham/Coventry, Leeds, and other working-class cities.

Thatcher also cultivated an atmosphere of hatred against continental Europe. She claimed that socialism had been defeated in Britain, but could always make a comeback through the machinations of the European super-state emerging in Brussels. In reality, Thatcher was able to cripple the European project by thoroughly infecting it with her primitive and barbaric economic methods, which came to dominate the European Commission and the European Central Bank, supplanting earlier and more effective approaches based on Catholic social thought and social democratic pro-worker thinking. One of Thatcher’s ministers was the infamous Nicholas Ridley, who responded to the collapse of the East German communist regime with chauvinist-inflammatory propaganda warning of the reemergence of a “Fourth Reich.” Today’s US-UK attack on the euro is built on this foundation.

Thatcher’s Downfall: The Regressive Poll Tax

Thatcher set herself up to be ousted through her fanatical ideological commitment to regressive taxation, meaning in practice the redistribution of wealth from the middle class, working people, and the poor to the rich and super rich who were the beneficiaries of her system. The experience of human society shows that regressive taxes, where everyone pays the same amount, cut heavily into the necessities of the poor and the amenities of the middle class, while hardly touching the sybaritic luxuries of the rich. Proportional taxes do the same thing: this applies especially to sales taxes and to Thatcher’s value-added tax (VAT). The only acceptable tax is a progressive tax, which increases its percentage bite as income rises from affluent to rich to super-rich. Those with the greatest ability to pay should contribute most.

One of the worst imaginable taxes is a lump-sum poll tax, formerly used in the American South as a subterfuge to prevent poor black people from voting. In 1990, Thatcher wanted to favor her wealthy backers by switching from local property taxes based on the value of real estate owned to a lump-sum property tax that would fall equally on rich and poor. Thatcher’s poll tax was designed to hit 35 million people, rather than the 18 million who had been paying the property tax. This openly regressive and reactionary tax was tremendously unpopular, and it hit many households which had been supporting Thatcher and the Tories. Soon public opinion surveys showed Thatcher almost 19 points behind the Labour Party.

Thatcher Pushed Bush into War with Iraq

Thatcher may have seen the handwriting on the wall, and may have tried to save herself with yet another war. When the regime of Bush the Elder in the United States had lured Saddam Hussein into occupying Kuwait, the Thatcher regime was the first to demand a military counterattack against the Iraqis based on Chapter 7 of the United Nations Charter. Thatcher’s admirers claim that her desire for war with Iraq was far greater than that of the outwardly wimpy President George Herbert Walker Bush. After a key Anglo-American summit at the beginning of this crisis, press leaks inspired by Thatcher suggested that Bush - perhaps still frightened by the fate of LBJ in Vietnam - had begun to “go wobbly” on the military mobilization, and that Thatcher had been forced to carry out an emergency backbone transplant on the president.

What followed was Operation Desert Shield, the deployment of immense NATO military resources into Saudi Arabia. But since the bombing did not start until the middle of January, Thatcher’s hopes for a quick new Malvinas were in vain. Instead, in early November 1990, Lord Geoffrey Howe - a loyalist who had now gone over to the Wets - resigned from her government. Soon, Thatcher faced a challenge from Tory leader Michael “Tarzan” Heseltine. When this challenge revealed the extent of hatred against Thatcher, the Iron Lady finally quit.

Thatcher Claimed “There Is No Such Thing as Society”

One of Thatcher’s most infamous slogans was in that “there is no such thing as society.” This is because, under Austrian school doctrine, economics does not involve an objective worldwide productive process based on a worldwide division of labor, but rather studies the subjective individual psychological choices of predatory speculators. This is also what Ron Paul and Rand Paul believe. There is no society, since there are only discrete alienated individuals competing with each other. Thatcher was also convinced that money, not skilled labor, modern factories, or state-of-the-art infrastructure was the metaphysical representation of wealth. With Thatcherism, market fetishism, money fetishism and general alienation were more intense than hitherto observed.

Thatcher was, despite her chauvinist bluster, a determined enemy of the modern nation state. She was especially hated in Scotland, the site of so many industrial bankruptcies caused by her. Because of this pervasive hatred, the British Conservative Party was fatally weakened in Scotland, with the Scottish National Party and others filling the void. The ability of the British establishment to foment a separatist movement of dupes in Scotland at the present time is the direct consequence of the economic devastation wrought under Thatcher.

The general line of the Anglo-American intelligence establishment, as seen in Iraq, Sudan, and Serbia and planned for many other countries, is the creation of micro-states, mini-states, rump states, failed states, and warlords through the actions of secessionist movements and other vehicles. None of these impotent and squabbling petty entities will have any hope of resisting the International Monetary Fund, the World Bank, and the leading multinational corporations. Thatcherite economics has thus prepared a new round of anti-national subversion a quarter-century after she left government.

As we can see in this case of Scottish secessionism, the British establishment habitually uses the British Isles as a kind of show window for the policies which it wants to inflict on the rest of the world, with special regard for the United States. That was also true of Thatcher herself, who was used as a prototype for the Reagan regime in the United States. Thatcher’s mantra of deregulation, privatization, market fetishism, union busting, colonial aggression, and general sociopathic outlook was wholly taken over by the reactionary actor in the White House.

Thatcher’s Key Role in the Decline of the West

For almost half a century after 1933, the Franklin D. Roosevelt New Deal provided the model for public institutions and policy in the United States, Western Europe, Japan, and in much of the world. The New Deal state was highly successful, withstanding challenges from economic depression, fascism and communism, while unlocking the secrets of the atom, and inaugurating the era of manned space travel. But the oligarchical elites of the Western world always resented the New Deal because it placed limits on their boundless greed and lust for arbitrary power and status. As the Soviet challenge receded, these oligarchical elites began using the methods of deregulation and privatization to dismantle the New Deal institutions.

After Richard Nixon and Henry Kissinger had in 1971 wantonly deregulated the highly successful Bretton Woods economic system set up in 1944, the time was ripe for a demagogic ideologue of oligarchical privilege to emerge. That demagogue was Thatcher. Her career has unquestionably marked the beginning of a new phase of the decline of the West. Whether Thatcher’s sociopathic handiwork can be rolled back and her damage undone is the question which remains to be answered.

Source http://www.presstv.ir/detail/2013/04/23/299764/margaret-thatcher-and-the-decline-of-west/