Breaking news: Margaret Thatcher has died

[Ed Anger]

This picture always amused me, in how it subtly told a story that was likely true:

Everybody got hookers and booze except poor Jimmy.

[Admiral Yi]

Yet somehow following the 2008- economic crisis Britain is entering a lost decade whilst Germany is doing wonderfully.

You can't seriously be suggesting that if only Britain had held on to its state-owned industries it would be flourishing as Germany is.

Britain's industries were bloated dinosaurs kept alive by government handouts.  Nobody was buying your coal.  The Jap's were building ships for half your price.  Every penny ante developing country was setting up textile mills and steel furnaces.  And your workers were striking half the year on the misguided notion that the only thing that determined their wages was the toughness of their negotiating.

Germany has made money by nurturing a tradition of quality engineering and production and German workers have had the insight that blue collar industries are a goose that will lay the occaisonal golden egg as long as it's not choked to death.

[garbon]

Yeah it's somewhat bizarre, younger Yanks tell us who actually lived through those times what it was like.   

Can you highlight a post? I haven't seen that, I don't think.

[Sheilbh]

Britain's industries were bloated dinosaurs kept alive by government handouts.  Nobody was buying your coal.  The Jap's were building ships for half your price.  Every penny ante developing country was setting up textile mills and steel furnaces.  And your workers were striking half the year on the misguided notion that the only thing that determined their wages was the toughness of their negotiating.

They also had 50 years of chronic under-investment, dreadful management and a system of technical education that remains pretty poor.

[mongers]

Yeah it's somewhat bizarre, younger Yanks tell us who actually lived through those times what it was like.   

Can you highlight a post? I haven't seen that, I don't think.

See Shelf's excellent post further up, quite a few people in this thread are reading the history written by 'victors' and assuming that Thatcherism and it's reforms were inevitable.
Whereas there were other historical probabilities and if you look at UK domestic politics from early 1981 to early 1982 you'll see the desperate political position the conservative government found itself in, at that point they were staring electoral defeat in the face in 2 years time. 

[Legbiter]

Were these hipster activists even born when Thatcher was in power?  I wouldn't be surprised if they're middle class and that their parents did well out of Thatcher's conservatism. 

[Admiral Yi]

They also had 50 years of chronic under-investment, dreadful management and a system of technical education that remains pretty poor.

They were, for the most part, overpriced, low-skilled labor,  commodity businesses.  Did you see saavy private firms swooping in to buy up Britain's textile mills and coal mines, to turn them into gold mines with their investments in sleek new machines and managements smarts?  Of course not.

[OttoVonBismarck]

Now, I will say the best answer to Britain's problems was certainly not "lets become the financial capital of the world." I do not think it hurts that London is the financial capital of the world, but finance never adds as much real value as actually producing things and creating products. Companies like Google or Microsoft or Oracle show the products don't have to be rolled steel or whatever but I think it is dangerous to assume a large economy can survive on financial services alone. Britain needs vibrant and successful creators of value, including both light to heavy industry and technology firms.

If you look at Germany, a lot of issues that in the United States are covered under state worker's laws or Federal labor laws are actually handled by German unions and their agreements with employers in Germany. That's not a reflection of Germany having weak labor laws (it doesn't, they're stronger than in the United States) but that it leaves a lot of the hammering out of details up to the unions and management entities themselves. In Germany, and I'm now diverging into speculation, we do seem to have a culture a people or whatever that for whatever reason labor is able to understand that the company they work for has to be profitable. That doesn't mean they happily bend over and take whatever they'd told to take, but there is a recognition that on some level labor and management are in a partnership, and it simply is not possible for a going concern to operate at a loss forever. In Britain there was an expectation of just that, with the government making up the shortfall. That's unrealistic.

In the United States unions are much less of an issue than they were 40 years ago to the point of being irrelevant in many areas, but our unions tend to be closer to the British model, in that to them they do not view it as a partnership but an adversarial relationship with management in which they are entitled to money and benefits and increases in both regardless of the long term profitability of the company they work for. There are extremes and of course there are also what I'd call "good" unions in the United States that regularly make necessary concessions. If anything our worst unions are actually public sector unions (which FDR warned against and never should have been legally allowed to exist), which literally refuse any concessions even for governments so deep in the red they'd have to destroy the entire municipality/county with apocalyptic taxes to ever pay the union demands.

Sadly with the union climate in the UK and the US the only right answer is to kill as many of them as possible. In Germany, while there are issues (such as it being far too difficult to fire problem employees) they've taken a different, more mature path. That allows for them to much more easily have manufacturing and heavy industry domestically. There are serious fears of operating heavy industry in the United States if you can't do it in a right to work State where the company can easily quell unionization efforts.

[OttoVonBismarck]

They also had 50 years of chronic under-investment, dreadful management and a system of technical education that remains pretty poor.

They were, for the most part, overpriced, low-skilled labor,  commodity businesses.  Did you see saavy private firms swooping in to buy up Britain's textile mills and coal mines, to turn them into gold mines with their investments in sleek new machines and managements smarts?  Of course not.

Good point as well, the German manufacturing sector is largely made up of what I deem "good" heavy industry where high skilled workers and quality control mean a lot. This tends to be "high unit price" industries. These industries can and are still profitable even with first world wages. That's why we build a shit ton of heavy engines, farm equipment, cars, turbines, locomotives and etc in the United States.

The textile industry in the United States largely went to shit around the 1970s, that's not coincidental but a reflection of how that industry is always going to be very difficult to protect from low skilled labor countries if you have low trade barriers. In the United States extractive industries like coal can and do survive (but have suffered due to falling demand) because we have a lot of domestic need. We mine a lot of coal that gets onto trains and goes straight to power plants, used to have a lot going straight to steel mills. The traditional steel country was where it was because you had coal mined nearby rolling right up to where it was needed, rivers for shipping stuff and etc. But when the finished product--a lot of that went away because despite good geographical layout to have an efficient steel industry we just couldn't beat really low labor costs in the developing world.

In the modern world "dumb" industry only stays in high labor cost areas when the costs of offshoring are too high relative to whatever you're doing. This is why cans for soup will typically be made in the United States, not because they can't be made cheaper in China but because it will never make sense to ship empty cans across an ocean. It also doesn't make sense to just import the finished canned soup because most of the actual food going into it comes from the U.S. so you'd be shipping food out, having it canned overseas and then shipped back. That's an example of a low-skilled industry uniquely protected by economics, but textiles and steel mills and coal mines won't operate that way.

[Ed Anger]

Those people in the pics:

Take away their benefits.


P.S. UKIP!

[garbon]

Yeah it's somewhat bizarre, younger Yanks tell us who actually lived through those times what it was like.   

Can you highlight a post? I haven't seen that, I don't think.

See Shelf's excellent post further up, quite a few people in this thread are reading the history written by 'victors' and assuming that Thatcherism and it's reforms were inevitable.
Whereas there were other historical probabilities and if you look at UK domestic politics from early 1981 to early 1982 you'll see the desperate political position the conservative government found itself in, at that point they were staring electoral defeat in the face in 2 years time. 

I'm not sure I see those as the same. I think the people so far who have argued historical inevitability said that politicians could have tried it sooner or later. I don't think they said that it would be well received at any point.

[derspiess]

I'm a little surprised.  These celebrations are seriously fucked up. 

The England I grew up learning about is dead.  Not that this was the first sign

The England you grew up learning about probably never quite existed just like that. The working classes of England have long been known for their boisterous qualities.

I'm surprised your love of ska didn't make that clear to you, or were you never into second wave 80s 2-tone?

Ghost Town from The Specials comes to mind:

http://www.youtube.com/watch?v=1WhhSBgd3KI

Or maybe... Maggie's Farm

Jake: I started with 3rd wave & worked my way backwards.  But yeah, I listened to a lot of Specials and other great 2nd wave groups.  None of it, not even the political stuff, led me to expect crap like what we're seeing.

[derspiess]

I doubt it ever existed.

Very deep statement, but I'm pretty sure it did. 

[CountDeMoney]

but our unions tend to be closer to the British model, in that to them they do not view it as a partnership but an adversarial relationship with management

It is an adversarial relationship, Otto.

Sadly with the union climate in the UK and the US the only right answer is to kill as many of them as possible.

Says the NICE Council member.

[Sheilbh]

They were, for the most part, overpriced, low-skilled labor,  commodity businesses.  Did you see saavy private firms swooping in to buy up Britain's textile mills and coal mines, to turn them into gold mines with their investments in sleek new machines and managements smarts?  Of course not.

Well I always agreed with Keynes that the best thing that could've happened in the war was if the Americans, it was too late to ask anything of the Germans, accidentally destroyed most of our factories with only the directors getting injured. You're right but firms like that changed in other countries and were able to specialise in new sectors - but also Britain did have, for example, a big auto industry years ago which could've survived.

Edit: In addition in the post-war era we had aerospace, heavy machinery, electrical engineering and so on. We weren't just coal mines and textile mills.

But really what I mean is that again there's a tendency to letting the victors write history. The failure of British industry is pinned on the workers and the trades unions - and they contributed. But there were other significant problems that lead to relative decline.

I think the biggest one was class. It fostered the hostility in industrial relations, so the unions never became a partner for change as they did in Germany. At the same time it allowed for amateurish management of companies because people went to the right college or whatever. Similarly engineering or any sort of 'technical education' of the sort Germany excels at were disdained really, which again led to amateurism - there's that great stat in a Peter Hennessy book that in 1945, when the UK was nationalising many industries, there was one trained economist working in the Treasury. Another consequence of that was that unlike most continental European countries we never really developed an Economy Ministry that would try and devise economic policy. I still think the best thing to get an idea of post-war Britain is to watch 'I'm All Right Jack' and it's a great comedy with a young-ish Peter Sellers as the union shop steward 'ahhh, Russia. All them corn fields and ballet in the evening.'

You add things like trying to maintain the Sterling industry, the decline of imperial markets and capital flight over that period (not helped by the occasional currency crisis) to all of the above and to increasingly militant unions and you have a bit of why Britain's industry declined.

One of the successes of Thatcherism was, in the City, to destroy that class hold. The City before Thatcher was unmeritocratic and inefficient. After her, if nothing else, it was fiercely interested in talent regardless of the background and far more effective as a financial centre.

Edit: And I think Thatcher herself was fiercely meritocratic. She was a lower middle class girl who studied chemistry and law and took over the Tory party when there were still truly grand grandees running it. One old Tory derided her cabinet (stuffed with new money like Michael Heseltine) as being made up of 'the sort of people who have to buy their own furniture'. Similarly I've always thought there's a slight class-based sneer in MacMillan's remark about her privatisations that she was 'selling the family silver'.