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Thatcher Policies Failed U.k. As Productivity Weakness Persists

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http://www.bloomberg.com/news/articles/2015-06-09/thatcher-policies-failed-u-k-as-productivity-weakness-persists

Margaret Thatcher’s economic policies failed the U.K. and left the country with long-term structural shortcomings that persist to this day, according to research at the University of Cambridge.

Liberalization had very little positive economic impact and productivity growth “clearly slowed” after 1979, Ken Coutts and Graham Gudgin at the Centre for Business Research at Cambridge said in the study published Wednesday. Any fillip was due to looser financial rules and a surge in household debt, which proved unsustainable, they said.

Thatcher -- U.K. prime minister from 1979 to 1990 -- implemented free-market reforms that led to the decline of mining and manufacturing and paved the way for the rise of Britain’s now-dominant services industry. That’s proving to be an issue for Prime Minister David Cameron today as he attempts to turn Britain’s consumer-driven recovery into a sustainable expansion that increases living standards for all.

Coutts and Gudgin said while the “conventional wisdom” is that the policies after Thatcher’s 1979 election -- lower income taxes, free movement of capital and labor, privatization, trade union restraints and light-touch regulation -- remain the best model, that may not be the case.

While they don’t outline specific measures, they recommend a regime that attempts to avoid some of the socially damaging aspects of those reforms, citing the experience in Nordic economies. In addition to productivity, their research taps into the issue of inequality amid a global debate on the widening wealth gap.

New Problems

“The U.K. economy before 1980 had many unsatisfactory aspects,” they said. “Liberalization changed much about this system but without accelerating growth in GDP or productivity. Instead it exchanged old problems, such as poor industrial relations and relatively high inflation for new ones including high unemployment and soaring income inequality.”

But in neoliberalism discourse soaring income inequality isn't a problem, it means the policies are a success because the hard workers and wealth generators are being rewarded which encourages everyone else to work hard and succeed...

Although the financialisation plan was to increase household debt, although how you can continue to increase household debt with stagnant wages is a paradox which wasn't really thought about.

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Thatcher? not only a bad politician but an evil one too, no better than Maxine Carr

Child abuse cover up at the highest level

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What about Wilson's actions which created the environment which led to the three day week and ultimately allowed for the wholesale destruction of domestic industry.

You have to remember that it was Benn and Wilson that closed the bulk of the mines. Thatcher closed only half as many but as a Tory was remember for doing so. Those that were there remained silent as the real damage was done and only spoke up when a government that they hadn't elected continued the policy. The miners strike was an attempt to clear their conscience for having allowed the wholesale destruction under a Labour government.

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http://www.bloomberg.com/news/articles/2015-06-09/thatcher-policies-failed-u-k-as-productivity-weakness-persists

But in neoliberalism discourse soaring income inequality isn't a problem, it means the policies are a success because the hard workers and wealth generators are being rewarded which encourages everyone else to work hard and succeed...

Although the financialisation plan was to increase household debt, although how you can continue to increase household debt with stagnant wages is a paradox which wasn't really thought about.

That insuferable ar5e at WPP just paid himself £45m so obviously trickle up works.

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Thatcher was 25 years ago... I think Cameron's problems are inherited mainly from a rather less distant source...

Indeed. 5 years of Osborne.

Or as one wag has it, Osborne now has to deal with a £90billion deficit inherited from himself.

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Osborne now has to deal with a £90billion deficit inherited from himself.

Osborne spent more in his first 3 years than Labour did in 13 years, and that includes the bailout money Labour had to spend in 2009. By the way, I think Labour were reckless with their spending, but the Tories have been on another scale altogether. We now live in an ultra-socialist state, constructed and maintained by a Tory government.

I'm guessing Osborne had to tear up the "we've really got no ******ing money left" note when he realised he was back in the hot seat after the election.

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Indeed. 5 years of Osborne.

Or as one wag has it, Osborne now has to deal with a £90billion deficit inherited from himself.

Indeed. So much for austerity, there's more public spending than ever before.

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Nationalisation completely ruined British industry. Killed it stone dead. Privatisation didn't create much more industry because the fact is that nationalisation had ruined it so utterly and comprehensively - though economic liberalisation did give us jobs in other areas at least.

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What about Wilson's actions which created the environment which led to the three day week and ultimately allowed for the wholesale destruction of domestic industry.

You have to remember that it was Benn and Wilson that closed the bulk of the mines. Thatcher closed only half as many but as a Tory was remember for doing so. Those that were there remained silent as the real damage was done and only spoke up when a government that they hadn't elected continued the policy. The miners strike was an attempt to clear their conscience for having allowed the wholesale destruction under a Labour government.

Somehow this never gets the scrutiny it deserves. Britain requesting an IMF loan is completely forgotten.

I recall the newspaper headlines recording the business failures every week, it was a bloodbath. At least 50% of Thatchers tenure was turning around that catastrophe but her true failure was never shrinking the state, she never really faced-down the socialists embedded in local government and education.

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It's refreshing to see original ideas such as blaming everything on Thatcher.

Osborne's the one talking about making a return to Victorian values! What is it with the Tory boys and their fetish for candlelight and outdoor lavatories?

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Ha...nothing to do with offshoring most decent wage jobs...

Two things the globalists will never talk about.

The theft of jobs and purchasing power via the export of jobs and import of foreigners

The theft of purchasing power by leaving the gold standard.

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I guess if improving average health by killing the sick and vaguely sick it worked, then so be it.

'Turnaround' and proactivity such as that was not in the vocabulary. It was turn up the burners and laissez faire.

The sort of policy that works on a micro scale may well not be the same for nationally important enterprises.

And here we are trying to give anything that is close to death our money (including and especially financial services)...or we wouldn't have anything at all it seems. How things have changed.

People had been trying to turn around British Leyland for years and years. As I said, nationalisation had wrecked the industrial base. Totalled it, ruined it. Thatcher just turned off the life support.

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Ha...nothing to do with offshoring most decent wage jobs...

Two things the globalists will never talk about.

The theft of jobs and purchasing power via the export of jobs and import of foreigners

The theft of purchasing power by leaving the gold standard.

Precisely this. Globalization started (agin) after WW2 - it was the price paid to the banking cartels for the war debt. It was also the root cause of WW1.

I guess if improving average health by killing the sick and vaguely sick it worked, then so be it.

'Turnaround' and proactivity such as that was not in the vocabulary. It was turn up the burners and laissez faire.

The sort of policy that works on a micro scale may well not be the same for nationally important enterprises.

And here we are trying to give anything that is close to death our money (including and especially financial services)...or we wouldn't have anything at all it seems. How things have changed.

I really didn't understand the relevance of most of that, bar the last sentence. I think you need a coffee.

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Poor managers - the brightest were attracted to the (falsely) burgeoning financial sector rather than developing technologies and running concerns.

Complete toss. Finance was as dull as ditch-water and not that well paid until the Financial revolution in the '80s and believe me, manufacturing was a corpse by 1975. Everything in the shops went from "Made in England" to "Made in the USA" (or Japan) overnight.

You just seem to be too young to know much about this era. History didn't start with your first *****.

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Thatcher was 25 years ago... I think Cameron's problems are inherited mainly from a rather less distant source...

Almost certainly.

But New Labour were also very very neo-liberal.

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What about Wilson's actions which created the environment which led to the three day week and ultimately allowed for the wholesale destruction of domestic industry.

You have to remember that it was Benn and Wilson that closed the bulk of the mines. Thatcher closed only half as many but as a Tory was remember for doing so. Those that were there remained silent as the real damage was done and only spoke up when a government that they hadn't elected continued the policy. The miners strike was an attempt to clear their conscience for having allowed the wholesale destruction under a Labour government.

Nice theory except that 3 day week happened under Heath, not Wilson. Wilson settled and got the miners back to work, after Heath asked "Who governs the country, me or Unions?" and the people voted for Unions (marginally)

However Thatcher was a product of Wilson. The great British property frenzy was well underway before she got to power

House prices roared throughout the 60's ( my parents bought for £3k in 1963 and sold for £12.5k in 1971 hardly believing their luck). Prices roared through the 70's until Heath/Barber crashed the economy.

Difference between then now. Strong trade unions that fought tooth and nail to keep wage rises above inflation.

When Wilson left office in 1970. He left behind a balanced budget (thanks to Roy Jenkins) but here's the thing..the economy was going backwards so Heath attempted a 'Dash for growth' (the usual boom and bust in other words)

Edited by RentierParadisio

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But New Labour were also very very neo-liberal.

That'll be why they took the best economy Britain had seen in decades--thanks to the EVIL NEO-LIBERALS Thatcher and Major--and turned it into the worst.

Anyway, the whole premise of this thread is nonsense. Britain's options in 1979 were Thatcher or complete economic collapse. For all her faults, there was no better option in the real world.

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When Wilson left office in 1970. He left behind a balanced budget (thanks to Roy Jenkins) but here's the thing..the economy was going backwards so Heath attempted a 'Dash for growth' (the usual boom and bust in other words)

He devalued in later 67, his famous pound in your pocket comment. He pushed austerity to attempt to get a surplus. His final term was spent attempting to improve service whilst failing to do so despite increased expenditure, a bit like Brown after he took power.

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http://www.bloomberg.com/news/articles/2015-06-09/thatcher-policies-failed-u-k-as-productivity-weakness-persists

But in neoliberalism discourse soaring income inequality isn't a problem, it means the policies are a success because the hard workers and wealth generators are being rewarded which encourages everyone else to work hard and succeed...

Although the financialisation plan was to increase household debt, although how you can continue to increase household debt with stagnant wages is a paradox which wasn't really thought about.

now i beg to differ.

the halcyon days of british leyland show that thatcherism was a symptom and a reaction to a much wider malaise.

you had arrogant management who were trying to run the place like a sweatshop,and not invest in the right training or tools to get the employees to do more and better for the same legwork.

you had arrogant trade unions who wanted something for nothing,and were not prepared to raise their game quality,wise.

both are in the wrong.

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I guess it's just a coincidence that the people who grew up after 1979 are going to be significantly poorer than those who grew-up before.

They'd have been a ******-load poorer without her, as they fought in the streets over tins of dog-food.

Besides which, the best time to come of age in the UK since the 60s was the early 90s, when Thatcher's policies had finally turned the economy around. Then the same people who benefited from those policies voted in Labour because 'it's time for a change, innit?' and destroyed all that.

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