Thatcher Fallacy (3)


“Thatcherism destroyed communities”

This is wrong. It was the development of the international economy that progressively rendered industry uncompetitive and their communities redundant. Industries that were once profitable were superseded in terms of commercial viability by identical industries in foreign countries.

Incidentally, lots of industries become uncompetitive for a plethora of reasons. These can be economic, technological, social, climatic and so on. The handloom for instance became uncompetitive when the steam powered loom was invented. Here a technological innovation makes the former industry redundant. ‘Displacement’ happens on a day-to-day basis around the world.

The effect is particularly acute when a town is built to support one industry. The economic and social consequences of a ‘staple’ industry’s decline can be severe.

In the 1980s, the Thatcher government simply realised the inevitable and refused to support failing industry with the taxes of successful industry. Instead state owned industry was privatised, private sector operating practices were imposed, and it was made clear that the State would not step in to save industry.

In fact one could make the case that the futile attempts of previous governments to sustain uncompetitive industry gave their communities false hope and only postponed the inevitable re-alignment with the market. Intead these communities should have been helped over a much longer period to readjust to the changes.

Despite the shock treatment, during the 1980s British production and productivity increased markedly, creating new employment opportunities and new communities.


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