The 4th of May marks the 30th anniversary of Margaret Thatcher’s first day as PM and the start of the deeply unfashionable “neoliberal” revolution. Yet it seems in Australia this fact is not worth reflecting upon, a Google search currently brings up no news hits from Australia. By contrast both the UK and US have devoted serious column inches (or should that be serious screen real estate?) to her legacy.

Margaret Thatcher in April 1979
It is so easy to forget (or for anyone under 40 to have never known) what Britain was like before Thatcher. The country was literally broke; the IMF had been called in. Much of industry was state owned, not just the utilities like water, telecoms and power, there were car companies, steel companies, the mines of course, British Airways, and banks. Over thirty percent of the population lived in government housing. It was a different world.
Yet, “almost 20 years after she left Downing Street, the British economy is once again in deep trouble. Almost everything that Mrs Thatcher opposed – nationalisation, raising taxes, Keynesian economics – is back in fashion. One by one, the signature policies and achievements of the Thatcher years are being dismantled in Britain.” So mused Gideon Rachman in the Financial Times as he pondered the lasting and not so lasting effects of Thatcherism.
Given the clear reversals in the Thatcherism project, is it all over for neoliberalism? Thatcher is famous for her declaration “there is no alternative”. Despite the current fashion for pointing at the excesses of financial markets and blaming it all on the supposed evils of neoliberalism she is still right, there is no alternative. There is no coherent alternative to sound finance, encouraging entrepreneurship, regulating not directing markets and most of all, low taxes. For all the Blairite third way rhetoric or the newer rhetoric of Rudd & Obama, there is no integrated and coherent articulation of a different path to that of Thatcherism. The conversation is still centred on the neoliberal project with merely sniping (and nudging) from the sides.
Take the UK nationalisation of banks, there is no expectation that this is anything more than temporary. Similarly, the massive pump priming and phenomenal budget deficits being run up around the industrialised world are still a short term response. The very fact that the magnitude of this new debt will take years, if not decades, to repay is a legitimate and well-understood counterattack. Despite the hopes and aspirations of the left and greens, nobody has discovered a rebuttal to the laws of supply and demand or the evidence people really do behave in the way public choice theory suggests they will.
A most interesting a thoughtful reflection on the Thatcher years appeared in UK Prospect by David Willetts. The whole piece is very well worth reading but I just want to reflect on one aspect of it. Willetts worked for Thatcher in the PM’s policy unit. In his article, he traces the ideological underpinnings of Thatcher as she herself saw them. Two key influences were Hayek & Bastiat. Thatcher apparently discussed the works of both and mentioned Bastiat in particular as a key influence.
Another influence was much more banal. Thatcher, perhaps more than any other politician of her era understood the practical effects of wartime controls. Not only did she grow up with grocers for parents she is, obviously, a woman. As such, she saw the daily annoyances and petty humiliations of wartime rationing and post-war price and volume controls. This combination of actually reading, discussing and thinking about great liberal thinkers with the day-to-day drudgery of shopping and keeping house provided a deep understanding of the practical effects of the loftiness of The Road to Serfdom.
Thatcher was right, there is no alternative, but to properly protect and enhance her legacy we need the intellectual as well as the practical learning to rebut the soft appeal of nanny statism and ever-increasing regulation that Rudd and co. are so successfully exploiting.