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Ear to the Ground

Michael Hudson Remembers What Margaret Thatcher Did

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Posted on Apr 9, 2013
R_SH (CC BY 2.0)

The deceased prime minister’s 11-year rule over the U.K. “was historic mainly by posing the conundrum that has shaped neoliberal politics since 1980: How can governments nurture and endow financial kleptocrats” with the consent of the people?

Thatcher’s political legacy was a carved up and privatized public services sector that had taken over a century to build via enormous taxpayer investment. Economists Michael Hudson and Jeffrey Sommers confirm she did this by conning voters into believing that they—rather than large financial institutions—would be the big winners.

But it wasn’t so. One of many consequences was the forcing out of London’s low-income employees to faraway neighborhoods that offered cheaper housing, from which they were compelled to take expensive, privately owned railroads to get to work. Another was the rise in England’s child poverty rate, from one in seven to one in three. These and other terrors were necessary precedents to the appearance of opposition movements like Occupy London in 2011. Musician and activist Billy Bragg said the subsequent loss of working-class jobs and income that he witnessed compelled him to become a socialist.

“There is no such thing as a free lunch,” Thatcher told voters, citing neoliberal University of Chicago economist Milton Friedman. But a free lunch was exactly what she gave to British bankers and those who came to own large shares of the nation’s previously socialized real estate properties. Meanwhile, the banks were given more and more power to decide the shape and direction of England’s economy.

It is all too clear that Thatcher’s rule was not a one-off. The policies she advanced in her own country were becoming popular around the globe, and the class of international elites they created are now presiding “over today’s descent into neoliberal austerity.”

—Posted by Alexander Reed Kelly.

Michael Hudson and Jeffrey Sommers at Michael Hudson’s website:

Throughout the world, the damage wrought by this financialized economy has been immense. By “liberating” national money from the constraints of taxing authorities, the Middle East stopped much of its projects for industrial development. After 1990 the Soviet bloc was deindustrialized to become an oil, gas and mining economy. And for Britain, trillions of dollars in global tax revenues that could have been used for industrial and social development were routed though London, where the UK has lived off the fees from this free-for-all. So despite Mrs. Thatcher’s admiration for Milton Friedman, famous for claiming that There Is No Such Thing As A Free Lunch, she made Britain’s economy all about obtaining a free lunch – eaten by the world’s financial managers who flocked to its shores.

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