Britain’s Margaret Thatcher:
Capitalism’s Warrior against the Working Class

Apr 15, 2013

Margaret Thatcher, former prime minister of Great Britain, died at age 87. Her death prompted just as many expressions of hatred as of support, at least in Britain. The “Iron Lady”–as a Russian newspaper nicknamed her in 1976 after a particularly nasty anti-Soviet speech–remains, in the eyes of the working classes, the major figure behind an offensive by big capital. Since the early 1980’s, this attack has continued to deepen social inequalities, with all of the devastating effects we see today.

In 1975, after sixteen years of a rather dull political career, Thatcher was elected leader of the Conservative Party. This happened almost by accident, since she was put forward as a diversionary candidate by the party’s right wing. Four years later, during the 1979 legislative elections, she became Prime Minister following her party’s victory. She quickly moved to show how “tough” she was, letting ten Irish political prisoners die during a hunger strike. Her surge forward on the basis of a populist chauvinism allowed her to be reelected in 1983 in the wake of the Falklands War (between Britain and Argentina.) She was then reelected in 1987. Finally, in 1990, a movement was provoked by a new tax, the “poll tax,” that was particularly unjust on the working class. This situation gave the same right-wing factions of the party that had brought her to power a pretext to force her to resign from her post.

Against Working-Class Combativeness

When she became Prime Minister, Thatcher had to deal with the legacy of the previous five years of a Labor Party government. During these years, the leaders of the unions, discredited by their support for the government’s austerity policies, had been continuously outflanked by wildcat strikes. This had come to a climax with the “winter of discontent” of 1978-1979 and its six months of strikes, which started in the auto industry and went on to paralyze the public sector.

Prudently, Thatcher avoided taking on the workers directly, instead pressuring the union bureaucracies. In the fall of 1979, the leader of the English employers’ association, who was close to Thatcher, pushed through an agreement with the Trades Union Congress (TUC). The agreement required the TUC to put an end to all strikes of solidarity, to limit the size of the picket lines, and to restrain the role of the delegates elected by workers. One year later, this agreement became the first anti-strike law passed by Thatcher’s government. This law was reinforced in 1982 when another law passed requiring advance notice and absentee voting for every strike movement. The law made the union apparatuses legally responsible for “damages” resulting from any strike conducted illegally by their members.

In reality, these anti-strike laws were only used by the government much later, and only in a small number of cases. But these laws remain to this day the main argument of the union bureaucracies to justify their inaction in the face of the bosses’ attacks. In this way, Thatcher succeeded in getting the union leaders to police their own ranks. Still, large strikes marked this period, although working-class combativeness was gradually tamed: a strike of 14 weeks in the steel industry in 1980, 12 months in the mines in 1984-1985, and 13 months in the London print shops in 1986–to name only the most important. These strikes ended in defeat–because the government stood against them, of course, but also and above all, because of the strictly corporatist character that the union leaders forced on the strikes.

Meanwhile, the TUC had changed with the ease of a chameleon, adapting to the new situation with a policy called “New Realism,” in favor of a new “partnership” with the bosses and their politicians.

Filling the Coffers of Big Capital

The year 1985 and the defeat of the miners marked a turning point in Thatcher’s rule. She had forced working class fights to retreat; then her government openly set about its goal of rejuvenating the profits of big capital. After decades of under-investment and financial parasitism in Britain’s sphere of influence, profits were at their lowest when compared with other economies of similar size.

Between 1985 and 1987, a whole series of taxes affecting stockholders, businesses, and the richest taxpayers were eliminated or cut in half. The working classes paid for the state treasury’s deficit with an increase in indirect taxes, such as the value-added tax (VAT), a kind of sales tax.

Thatcher’s government began privatizing the public sector–one of the largest in Europe at the time–on an enormous scale by selling off enterprise after enterprise at rock-bottom prices. Millions of public housing units were also “privatized,” thereby causing the number of home loans to skyrocket, all to benefit the financial sector. By the same token, the way was cleared for the real estate bubble of the following decades and for the acute housing crisis that Britain is experiencing today.

At the same time, the City, the financial center of London, was the stage for what was termed the “Big Bang”–the financial deregulation that effectively allowed all the corporations to speculate directly on the financial markets. Due in part to the inflow of big American banks hoping to use the City as a European outpost, a huge inflation of London’s financial sector began, with all of the parasitism it implies for the rest of the economy.

This policy, known as “Thatcherism,” would anticipate what happened in the rest of the industrialized world. This same financialization took place in more or less the same way, under all governments, whether on the right or on the left, for the same reasons. Every government was attempting to halt the fall in profits resulting from the chronic crisis of the capitalist economy.

Thatcher was certainly a worthy servant of the British bourgeoisie, as the first one to put this policy into practice. But as soon as her task was carried out, her nasty reputation became a political threat. Thatcher provoked tens of thousands of demonstrators to descend into the streets in protest against the poll tax, so her former protectors quickly got rid of her. In fact, the power of the “Iron Lady” stood on feet of clay.