There is No Alternative (24 page)

We opened a bottle of champagne before going out to dinner, and when the subject of Thatcher came up, I switched on my recorder.

The transcript indicates that we did not, in fact, return to the subject, or if we did, I never turned the recorder back on.

It is not hard to see why unemployed former coal miners who are still living in poverty would fail to see the lifestyle of these two men as evidence that Thatcher created a better world. Now, you know where I stand on Thatcher—I am not saying that I agree
with them. I am just saying that if you want to know why they still hate her, look no further.

Was there an alternative? Many people still think there was. Neil Kinnock thinks so, of course.

Kinnock, as you can see, wouldn't let me interrupt him. But in the end I have the final word. In his view, and he is perfectly clear about this, the alternative to Thatcher was a planned economy.
And the evidence he offers that such an economy can create anything other than a human hell is Sweden. Let me finish the sentence he wouldn't let me finish. Socialists love analogies to Sweden. But they are always unconvincing because they are based on some
fantasy
Sweden, rather than on an actual Nordic country bordered by Norway and Finland. In this Sweden of lore, every single woman is also eighteen years old, blonde, busty, lonely, naked, and waiting for you in the sauna. Kinnock is simply mistaken about Swedish unemployment statistics. In the early 1990s, Swedish unemployment rose to 13 percent, higher than ever experienced in Britain after Thatcher came to power. In the period Kinnock is discussing, Sweden in fact experienced a precipitous
slide
in the prosperity league—from fourth place in 1970 to sixteenth place in 1998.
¹¹³
In fact, the policies Kinnock admires nearly ran Sweden into the ground. Only when they were abandoned did the Swedish economy begin to recover. You may as well argue that the command economy has been a splendid success in Narnia.

Over and over again, Thatcher's critics told me that yes, Britain's economic transition was inevitable, but “she didn't plan for it.” No, she didn't. That is precisely the point. If the government plans the economy, it is no longer free. And if it is not free, the transitions that do occur tend to lengthen the lines for bread.

So the question remains: Were the costs of the Thatcher Revolution inevitable? Was this the price Britain had to pay as a kind of entrance fee to a true market economy? I'm afraid most of them probably were. The blow of the first years would have been softened had her first governments been more deft in their monetary targeting, but the bulk of the permanent dislocation can't be attributed to this. For the most part, those whose standard of living declined as a result of Thatcher's reforms became poorer because they had previously been the beneficiaries of state support, either
in the direct form of welfare payments or the indirect form of state intervention to prop up fossilized and uncompetitive industries.

Had this system of economic redistribution been sustainable, the argument could be made that it was more humane than the one that replaced it and, therefore, that it should have been sustained. But it was not sustainable: Britain was experiencing slow but steady relative decline. Relative decline, over time, tends to become absolute decline, followed by collapse—a pattern commonly observed in command economies.

Britain is now the world's second-largest producer and exporter of services. What remains of its manufacturing sector is highly competitive. In the period since Thatcher came to power, countries such as China have liberalized their economies and transformed themselves into manufacturing superpowers. It is simply not credible to imagine that Britain could have survived as a major manufacturing power in the face of that kind of competition. Attempts indefinitely to prop up Britain's uncompetitive manufacturing sector were doomed to progressively greater failure.

In Thatcher's defense, let this be said: The transition from a command to a market economy tends everywhere to be brutal. For evidence of this claim, look at Russia. The moral responsibility for this is not with those who seek to return freedom to the markets; it is with those who thought it would be a splendid idea to eliminate it in the first place. The alternative to this brutal transition was—
and could only have been
—maintaining a command economy.

And this was no alternative at all.

The Falklands—known to Argentineans as the Malvinas—are a desolate chain of islands in the South Atlantic some 300 miles east of the Straits of Magellan. Variously disputed by the major colonial powers until 1816, they were claimed by Argentina upon its independence from Spain, then reclaimed by the British in 1833,
when a British naval force evicted the Argentineans. They were thereafter uninterruptedly settled and inhabited by the British, but certainly in no large numbers: In 1982, the Falklands were home to some 1,820 British subjects, 600,000 sheep, and five species of penguins. The islands were of no geostrategic significance: no arable land, no warm-water ports, no strategic raw materials, no multinational fruit conglomerates, nothing—just sheep and penguins.