Thatcher's Enemies

By John C. Goodman

Saturday, April 13, 2013

 

In Britain they are mourning the death of Margaret Thatcher. They are also celebrating. Celebrating? Yes, celebrating.

 

"Ding Dong the Witch is Gone," reads one sign. "I Still Hate Thatcher," reads another. Then there is "Rejoice, Thatcher is Dead" and "The Bitch is Dead." Try this link if you're up to viewing a lot of sickening photos and a lot of disrespect for Britain's greatest leader.

 

Granted, any crazy person can create a sign. But this is a good time to remember the conflict in Margaret Thatcher's Britain was not just about slogans on signs. She was actively engaged in a war of ideas.

 

Most of us have a good idea of Thatcher's political philosophy. Could you explain the political philosophy of her opponents? I think the basic beliefs of the left in Britain are not all that different from the beliefs of the left in this country. Yet you almost never hear it spelled out in clear detail.

 

So let me give it a try.

 

Let's start with what the left does not believe. Do they believe the political system should make everyone have the same income and the same wealth? No. Do they believe in the Rawlsian principle that public policy should always favor the least well off? No. Do they believe that government should intervene in the economy if and only if intervention increases GDP? No. Do they believe that government should intervene in the economy if and only if…?

 

Ok. Let's stop. The problem with all the ideas in the preceding paragraph is that they would restrict political decision making to a principle. If politicians were restricted to a principle — any principle — they would have very little discretion.

 

Let's suppose that we wrote the Rawlsian principle into the Constitution. Then we can imagine a Supreme Court striking down any law that did not benefit the least well off. Is this something that would appeal to the anti-capitalist mentality?

 

Here's what you need to understand about the political left. The last thing in the world they want is to take discretion away from government — at least in the economic realm.

 

So what do they believe in? Two things.

 

First, government should have virtually unrestricted authority to intervene in the economic sphere. It should be able to set prices, control output, dictate quality standards, nationalize companies, create cartels and restrict entry into markets for any reason whatsoever. In particular, they believe that government should have unlimited ability to intervene in the market to help Peter at the expense of Paul, regardless of who Peter is and regardless of who Paul is. By that last point I mean that Peter can be rich and Paul poor, or vice versa. Peter can be young and Paul old, or vice versa. Peter can be happy and Paul can be sad, or vice versa. Peter and Paul can be anybody.

 

Second, people should be able (and even encouraged) to form special interest groups to pressure government for the express purpose of taking from Peter to benefit Paul. Further, there should be almost no limit on what kind of favors interest groups should be able to extract from government.

 

To understand the contrary point of view, consider the case of New Ice House vs. Liebmann (1932). In that case Oklahoma City granted a monopoly to one firm and refused to allow any other firm to deliver ice to consumers. The Supreme Court, however, was unable to find any legitimate purpose behind the regulation. There was nothing showing that the ice house monopoly in any way was promoting the "general welfare." Therefore, the Court struck down the regulation on the grounds that it unconstitutionally interfered with the natural liberty the Constitution is presumed to protect.

 

Now if you listened to the rhetoric of the left, you would think that this decision would be lauded at every Democratic national convention. Here is a greedy (for-profit) ice house that undoubtedly convinced friendly politicians to give it exclusive control over the market for ice. Its monopoly profits were at the expense of consumers, including working class folks struggling to get by. If you favor the little guy over the vested interests, how could there be any question about what is the right side?

 

Yet, it is an article of faith on the left that the Supreme Court decided this case incorrectly. The left, to repeat, wants virtually no restriction on government's ability to intervene in the economy.

 

The only thing that differentiates the radical left from the more moderate left is the degree to which they are willing to allow special interests extort favors. In the "winter of discontent" (1978-79), the British economy was ground to a halt by the labor unions. As Megan McArdle writes:

 

Trash piled up in the streets. The truck drivers who ferried goods all over Britain went on strike — and the ones who didn't, like oil tanker drivers, began feeding their destinations to "flying pickets" — mobile groups of strikers who would go from location to location, blockading them so that workers couldn't get in and goods couldn't get out. The BBC called them the "shock troops of industrial action" and that's an accurate picture; effectively mobilized, flying pickets can grind the wheels of industry to a halt…

 

In Liverpool, the gravediggers went out, leaving bodies unburied for weeks. By the end of January, half the hospitals in Britain were taking only emergency cases. Full of righteous fury, the unions flexed every muscle, demonstrating all the tremendous power that they had amassed by law and custom in the years since the Second World War.

 

These were the excesses that brought Margaret Thatcher to power. If there is any criticism on the left it is only that these activities were "excessive." Almost no one on the left disagrees with the principle that government should be able to grant a monopoly to a labor union — just as the Medieval guilds monopolized their trades in earlier times. Almost no one on the left disagrees with the idea of a picket line — an extra legal activity designed to intimidate and coerce private citizens. Rarely will you hear any criticism on the left of the unions' discrimination against outsiders — of their long history of excluding women, blacks and other minorities. The difference between the British Labor Party and liberal Democrats in the United States is similarly only one of degree.

 

As I have written before, unions are not formed to help those at the bottom of the income ladder. They are organized against the lowest paid workers. A union can succeed in obtaining above-market wages only if it can keep other workers out of the market.

 

Unions are not about altruism. They are about the raw pursuit of self-interest. What we generally call "liberalism" is about accommodating that pursuit of self-interest. Think of the political sphere as a special kind of Hobbesian jungle in which each group tries to rig the rules of the game in order to enhance its share of the economic pie at the expense of everyone else. During the administration of Franklin Roosevelt, the federal government tried to codify this process — economy wide:

 

At [Roosevelt's] behest, Congress passed the National Industrial Recovery Act (NIRA), which attempted to regulate the entire economy, based on the Italian fascist model. In each industry, management and labor were ordered to collude to set prices, wages, output, etc. (acts that today would be a criminal violation of the anti-trust law). So intrusive were these regulations that what in retrospect seems like an incredibly silly regulation made it all the way to the Supreme Court, which responded by declaring the entire scheme unconstitutional.

 

Roosevelt was among the most collectivist (anti-individual rights) presidents the United States has ever had. And not just in the economic realm. Although Abraham Lincoln and Woodrow Wilson before him had suspended constitutional rights in the time of war, Roosevelt went further than any president before or since. On his orders Japanese Americans were rounded up and forced into detention camps (for no other reason than the fact that they were of Japanese ancestry) for the duration of World War II. ("What is Classical Liberalism?")

 

One more thing. The left is devoted to process, not to results.

 

When Britain turned Hong Kong over to the Chinese (1997), per capita income in Hong Kong was higher than it was in Britain. Think about that. This former British colony has no natural resources. It is basically a large rock sitting in the sea. Its citizens are mainly refugees who immigrated with little or no wealth. The only thing Hong Kong had going for it was that it had the freest economy in the whole world.

 

So how many people in the Labor Party said "Hong Kong's political economy works better than the political economy of the mother country"? Not a one.