Thatcher's Politicial Legacy.

[Razgovory]

I dunno.  It happens all the time.  Cities will attract a business to the area by not collecting property tax for a certain amount of time.  If that counts as a handout, then vast number of businesses receive handouts.  Another trick is for a city to build road and sewer service out to where a business is promising to relocate.

[Razgovory]

Oh, and here's another one, what about a business that provides services to a "handout business".  Like a business that provides roofing or legal services for a business that gets subsidies?  Are they receiving a handout?

[Agelastus]

I dunno.  It happens all the time.  Cities will attract a business to the area by not collecting property tax for a certain amount of time.  If that counts as a handout, then vast number of businesses receive handouts.  Another trick is for a city to build road and sewer service out to where a business is promising to relocate.

All of which are handouts; beneficial and worthwhile ones on the face of it*, but still handouts. A handout isn't neccessarily a bad thing as part of an overall plan - I find Tyr's point exaggerated (there's only certain industries with that kind of major knock-on effect, the most famous one being automotive) but I agree with his point that there are sometimes valid reasons for giving handouts/government support. Once again I suspect he and I would differ greatly in the application of said policy...



*I say on the face ot it since I can remember reading recent articles that suggested that once you started giving out these handouts to attract the business a lot of them keep coming back for more handouts every few years in order to stay there - thus reducing the value gained from the initial handout. To be honest I suspect the article was posted on Languish - I remember thinking that I hoped that the local authorities concerned understood that it's perfectly legitimate to say no if the costs escalated beyond the benefits.

[Razgovory]

This would make pretty much every manufacturer in the US a recipient of handouts, which is something that is anathema to the GOP.

[Agelastus]

This would make pretty much every manufacturer in the US a recipient of handouts, which is something that is anathema to the GOP.

It may be anathema, but "euphemisms" are a very useful tool in this case I would imagine; surely it's the very basis of so-called "Pork Barrel" politics that I was under the impression both sides indulged in?

"A handout by any other name..."

Out of interest, where would you draw the line for the term "handout"? With just the ones you think are bad or unneccessary as most modern politicians seem to do these days or somewhere else? I'm curious.

[Razgovory]

Honestly, I don't concern my self with being critical of handouts.  I think it's the governments job to help out occasionally.

[The Minsky Moment]

Manufacturing and mining was going to decline in Britain no matter what.  But there is a difference between a gradual decline that allows space and time for the workforce to adjust and sudden catastrophic drops that decimate entire working communities.  The problem here re Thatcher was not so much the staredown of the more militant unions (which I agree had to happen) but a disasterous anti-stabilization macro-economic policy that engineered a depression at the same time.  In effect, overnight she doubled the trend rate of unemployment and the UK economy never really recovered from that until after she was gone.

As for fahdiz's argument that work for its own sake should not be valued, I accept that as a theological proposition, but not an economic or sociological one.  Long term unemployment, particularly if concentrated geographically, can have devastating long-run hysteresis effects in terms of eroding worker skill bases and permanently reducing the the skill levels and work habits of the next generation.  As to whether those effects could justify temporary policies of subsidization of employment, I think that is at the very least an open question.

[Valmy]

Manufacturing and mining was going to decline in Britain no matter what.  But there is a difference between a gradual decline that allows space and time for the workforce to adjust and sudden catastrophic drops that decimate entire working communities.

I can accept that. 

My only question would be was that possible under the political circumstances?  This sort of reminds me of the idea that we can gradually reduce the budget deficit and that just means we increase it less quickly.  Sometimes the band-aid has to be pulled off when you have the chance.  Maybe you are right, but in my experience gradual transitions to unpopular policies are next to impossible because of political resistance.

[crazy canuck]

God. Work, for its own sake, is SO NOT a virtue. That's one of the most disgusting leftovers of Protestantism.

I disagree, I think work's a virtue. I think it's better for people and communities than either permanent welfare or Downtown Abbey.

I agree.  In my experience there is nothing more soul (psychological not theological) destroying then not being able to work.

[crazy canuck]

Manufacturing and mining was going to decline in Britain no matter what.  But there is a difference between a gradual decline that allows space and time for the workforce to adjust and sudden catastrophic drops that decimate entire working communities. 

I am not sure what you are advocating for here.  Coal mining had been nationalized since, I think, the 40s.  I am not sure how one ends state control and subsidy of that sector "gradually".

[The Minsky Moment]

My only question would be was that possible under the political circumstances?  This sort of reminds me of the idea that we can gradually reduce the budget deficit and that just means we increase it less quickly.  Sometimes the band-aid has to be pulled off when you have the chance.  Maybe you are right, but in my experience gradual transitions to unpopular policies are next to impossible because of political resistance.

This wasn't about different methods of pulling off band-aids; it was just bad policy based on bad theory. 
Thatcher's advisors decided it would be neat idea to make the UK into a giant laboratory to test Milton Friedman's theory that you could run economic policy by simply targeting broad monetary aggreagates.
That turned out to be a terrific contribution to academic macro because the empirical experience established pretty definitively that this didn't work.  Unfortunately the UK economy paid the price for this experiment.

[The Minsky Moment]

Manufacturing and mining was going to decline in Britain no matter what.  But there is a difference between a gradual decline that allows space and time for the workforce to adjust and sudden catastrophic drops that decimate entire working communities. 

I am not sure what you are advocating for here.  Coal mining had been nationalized since, I think, the 40s.  I am not sure how one ends state control and subsidy of that sector "gradually".

Focusing narrowly on coal mining, seems to me state control makes that easier . . . 

[crazy canuck]

Manufacturing and mining was going to decline in Britain no matter what.  But there is a difference between a gradual decline that allows space and time for the workforce to adjust and sudden catastrophic drops that decimate entire working communities. 

I am not sure what you are advocating for here.  Coal mining had been nationalized since, I think, the 40s.  I am not sure how one ends state control and subsidy of that sector "gradually".

Focusing narrowly on coal mining, seems to me state control makes that easier . . .

Again, I am not sure what you are advocating for.   The coal mines and associated industries that were profitable remained open.  Earlier you said that her "stare down" with the union was necessary but now you seem to be suggesting that it was not and that she should not have tried to close down the money losing pits.

[The Minsky Moment]

Again, I am not sure what you are advocating for.   The coal mines and associated industries that were profitable remained open.  Earlier you said that her "stare down" with the union was necessary but now you seem to be suggesting that it was not and that she should not have tried to close down the money losing pits.

Sorry if I was unclear.  I do think the overall policy on the coal mines was sound as I understand it: gradually reduce employment levels, focus investments in the more profitable mines, and phase out the others.  I also think she had not other good options in the mid-80s strike.  My gripe is with the destablizing macro policies of the earlier period 79-81, which impacted all industry.

[crazy canuck]

My gripe is with the destablizing macro policies of the earlier period 79-81, which impacted all industry.

Ok, I understand you point now.  But could you provide a brief description of those macro policies and the alternative policies that would have been better to implement?