Britain in the early 1970s was decayed, ungovernable and globally irrelevant, done in by the cumulative effect of postwar socialist reforms. Margaret Thatcher, who came to power as the nation’s first female prime minister in 1979, returned Britain to the realm of the great powers. Worshipped, feted, loathed and mocked, she is one of the most controversial figures of the 20th century. And now Thatcher, as interpreted by Meryl Streep, will be coming to a theater near you in the movie “The Iron Lady.”
But even those most sympathetic to Thatcher tend to misunderstand her personality, her governing style and her accomplishments. Let’s examine these misconceptions.
• Myth No. 1:The Iron Lady never backed down
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Not true. Her genius was her gift for choosing her battles wisely and avoiding those she couldn’t win. In 1981, for example, the National Union of Mineworkers – Britain’s most powerful union – threatened to strike. Despite urgent warnings from her advisers, Thatcher had made no preparations to withstand a conflict with the miners, and she capitulated immediately to their demands. She spent the next three years preparing to take them on: Her government stockpiled coal, devised schemes to smuggle strategic chemicals into power stations, changed the trade union laws and infiltrated MI5 spies into the miners’ inner circle.
When another strike loomed in 1984, she was ready. Previous mining strikes had ended after only weeks. Not this one. Over the course of a year, as Britain waited to see who would break first, Thatcher proceeded to crush the strike with a brutal, calculating ruthlessness that stunned the public. Neither labor nor the unions ever recovered.
• Myth No. 2:
Not at all. As a number of her colleagues told me, she has a ribald sense of humor and was quite unconcerned when her ministers got themselves into sordid adultery flaps. One of her civil servants, for example, remembered desperately trying to finesse a compromise between Thatcher and her chancellor, the Cabinet minister responsible for the economy, during a dispute over the budget.
His delicate diplomacy was upended when Thatcher came back to 10 Downing Street from the House of Commons, apparently quite drunk, and discovered her chancellor holding a secret strategy meeting. She strode in uninvited, kicked off her shoes, tucked her heels under herself and declared, “Well, gentlemen, let’s just settle this now, shall we?” She “held court like a queen bee,” the civil servant said — and thus was it settled in her favor.
Afterward, the others could be heard muttering among themselves, “Phwoar, wasn’t she sexy tonight?” French President Francois Mitterand is said to have famously called her Brigitte Bardot with Caligula’s eyes.
• Myth No. 3:She was against European unification
Yes, she is known as the great Euroskeptic. But the peculiar truth is that for most of her career, she was a passionate advocate of European unification. In 1975, she led the Tory faction of the “Vote Yes” campaign in referendum to determine whether Britain should stay in the Common Market, the precursor to the modern European Union. The Single European Act of 1986, which revised the Treaty of Rome to expand the power of the European Economic Community, as the Common Market was then known, was her initiative.
Thatcher was an ardent Europhile, in fact, until the issue of the single currency came up. That, she believed, would require one European economic policy, leaving Britain without access to the key economic instruments of a sovereign government.
In October 1997, then-Labor Chancellor Gordon Brown announced that the Treasury would set five tests to ascertain whether the economic case for joining the euro had been made. Thatcher might as well have written the test. The case was never made. History has obviously proved her right.
• Myth No. 4:No one would meddle with Britain if she were still in power.
It is often said that if only Margaret Thatcher were in power, Britain wouldn’t be in this mess – “this mess” being whatever has just gone wrong. When the British Embassy in Iran was stormed recently, many in the British media rushed to insist that this would never have happened if Thatcher were in charge. GOP presidential candidates Newt Gingrich and Michele Bachmann have invoked her legacy to imply their ferocity when asked how they would formulate policy toward Iran.
But in 1979, President Carter asked Thatcher for “the strongest possible remonstration or action” to pressure Iran, asking Britain to reduce its diplomatic staff in the country. Thatcher responded that she did not believe it “wise to make a political point of any reduction, partly because we doubt whether the Iranians would be much impressed and partly because of the risk of retaliatory action against those remaining.” In 1984, Moammar Gadhafi loyalists opened fire on demonstrators from the second floor of the Libyan Embassy in London, killing a young British policewoman. The shooters were permitted to leave the country. They were not arrested and tried, despite howls of outrage from the British media.
Why not? Because Thatcher feared reprisals against British citizens in Libya. This is precisely the sort of thing that would never happen if Thatcher were still in power, except that in this case, Thatcher was in power.
• Myth No. 5:“Thatcherism” caused the global financial crisis
This is among the most muddled ideas about Thatcher. It is true that failure of regulation was a significant factor in the 2008 financial collapse, and it is true that Thatcher promoted deregulation. She once interrupted a droning speech by a fellow Tory about the “middle path” the party must follow. She extracted a copy of free-market thinker Friedrich von Hayek’s “The Constitution of Liberty” from her briefcase, held it up before the audience, then slammed it on the table. “This,” she said, “is what we believe!”
But the deregulation she pursued had nothing to do with the lack of oversight that contributed to the meltdown on Wall Street. Before Thatcher, commissions of civil servants decided, for example, what sorts of cars Britons should drive. That was the kind of regulation she ended. She was a passionate proponent of regulation that makes free markets function properly – otherwise known as the rule of law.
Thatcher supported stringent bank regulation. Consider the 1986 Financial Services Act. Contrary to its reputation, it closed loopholes in investor protection laws, boosted the enforcement power of regulators, and applied the same investor protection standards to a broad range of securities and investment activities.
Thatcher stood for thrift, sound money and balanced budgets, powered by private enterprise. The uncontrolled explosion of debt in Western economies that followed her time in power would have appalled her.