Think Again

Think Again: Margaret Thatcher

The former British prime minister was a transformative politician. But her public image as an unblinking Iron Lady fails to do justice to her complexity.

As a trip to any London newsstand this week will tell you, Margaret Thatcher's political mission was an inherently polarizing one. To her fans she remains the very embodiment of self-assured conservatism, the woman who unapologetically celebrated the values of patriotism and free enterprise. To her foes she remains Thatcher the Milk Snatcher, the sneering prima donna who slashed away at the British welfare state, spared little time for the poor, and opened the way to an era of excess and greed.

Both of these images are caricatures. Yes, the late Thatcher was a leader of extraordinary single-mindedness -- she had to be, given her status as a woman who aimed to have her way in the overwhelmingly male world of British postwar politics. She won election as British prime minister in 1979 and held onto the office for 11 years -- longer than any of her democratic counterparts during the twentieth century. Her calculated flintiness cemented her popular image as the "Iron Lady" (a nickname originally bestowed her by a Soviet newspaper that was attempting to mock her, but which she characteristically embraced instead). In reality, however, she was also a practical political operator with a sharp sense of the limits imposed by public opinion. Indeed, not all of her policies were as radical as her myth suggests. Here are a few misconceptions:

"She Hated Big Government."

Up to a point. One of Thatcher's signature achievements was her privatization program, which took some of the key industries that had been nationalized by the Labour Party in 1945 and restored them to private ownership. British Gas, the telephone company, and industrial firms were removed from state control, their shares sold off to investors. The idea was to get government out of the direct day-to-day management of companies that were better off exposed to the bracing discipline of the markets. A similar logic motivated her policy of selling off hundreds of thousands of public housing units to the people who lived in them -- transforming them from tenants to homeowners. Bureaucratic regulation of any kind of economic activity was a red flag to her, and she slashed away at red tape wherever she found it. One of her most important moves after becaming prime minister in 1979 was the abolition of exchange controls, an important precondition for the later "Big Bang" (her late 1980s deregulation push that almost instantly transformed London into a major European financial center.)

All of this was dramatic enough, and certainly reduced the extent to which the government intervened in the lives of ordinary people. And yet she pointedly shied away from any radical restructuring of the core institutions of the "cradle-to-grave" welfare state that the Labourites had established three decades before her. She was especially reluctant to take on the National Health Service, the all-encompassing health-care system that remains a mainstay of British society today. Though she attempted a few piecemeal reforms of the NHS, she notably refused to expose it fully to market discipline, all too aware that the British public would never stand for that. Nor did she attempt any substantial changes in the system of old-age pensions or unemployment insurance.

Free-market economist Milton Friedman once described Thatcher's economic philosophy as that of a "19th-century liberal," but he couldn't have been more wrong. She was a thoroughly 20th-century reformer who understood that some functions of big government defied political remedies. And there was another problem: Thatcher's hatred of socialism sometimes clashed with her urge to reduce government involvement in the lives of citizens. Many city councils in Britain at the time were dominated by far-left Labour politicians, and Thatcher often found herself persuaded to use the powers of the national government to counter them -- thus sometimes drawing London into realms where it had previously remained aloof. Critics such as journalist Simon Jenkins note that, in this respect, she often proved more closely wedded to the "nanny state" than she was often willing to admit.

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"Thatcherism Was All About Cutting Taxes."

Sort of. Britain became notorious in the 1970s for its astonishingly high rates of tax on top earners, prompting many a rock star and CEO to seek more hospitable financial climes. One of the Thatcher's first moves after her election as British prime minister in 1979 was to slash income taxes. (In 1979 the top rate was an astonishing 83 percent, which her government cut to 60 percent.) By reducing the tax burden on earnings, she aimed to unleash long-suppressed entrepreneurial impulses and to make it easier for Britons to get back into business for themselves. And she certainly succeeded. Post-Thatcher Britain has a far livelier and more diverse capitalist culture than it did before she came long.

In stark contrast to today's Republicans in the United States, though, Thatcher acknowledged that it was impossible to balance the government's books without raising revenues elsewhere -- which she did, in her first term, by boosting taxes on consumption. Though government finances during her early years received a huge boost from the flow of North Sea oil (which had begun not long before she became prime minster), the share of revenue from taxes remained high throughout her prime ministership. As Jenkins notes, taxation as a share of non-oil domestic product actually rose, from 35 percent in 1979, to 37 percent by the time she left office in 1990.

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"Thatcher Was a Dyed-in-the-Wool Social Conservative."

Not really. It was TV journalist Andrew Marr who came up with one of the best one-liners about Thatcher: "Margaret Thatcher was a child of the sixties -- the 1860s." Thatcher loved to invoke images of a halcyon Britain where people relied on their own individual initiative to get ahead, where the needy received care from private charity, and where values of thrift and hard work reigned supreme.

In many ways, however, she was entirely a creature of the second half of the 20th century. Though she was the product of a strict Methodist upbringing that emphasized individual responsibility and respect for traditional values, her record as a Conservative Party parliamentarian shows that she approved of legal abortion and also voted for a landmark law in the 1960s that decriminalized homosexuality. (To be sure, she later angered gay rights advocates with her support for a 1988 measure that prohibited schools from teaching "the acceptability of homosexuality as a pretended family relationship.") She might have found some common ground with today's U.S. Republicans over capital punishment, of which she strongly approved. Yet it's hard to imagine that her other views on social issues would have proved amenable to the American conservatives who today hold her in such high regard.

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"Thatcher and Ronald Reagan Were Political Soulmates."

Not always. There's no question that Reagan and Thatcher shared many of the same political instincts -- including a conviction in the superiority of free markets and private initiative, a suspicion of big government, and respect for organized religion. Their awareness of this basic philosophical overlap served as the basis for a remarkable partnership that has yet to find its equal in the long history of the U.S.-UK "special relationship." The common front that the two were able to build against the Soviet Union certainly helped them to navigate one of the most dangerous phases of the Cold War in the early 1980s.

And yet the public image of a serenely harmonious "power couple" obscures more than it reveals. Both were fervent defenders of their countries' respective national interests, which sometimes clashed. As Thatcher biographer John Campbell notes, Thatcher was profoundly disappointed when the Reagan administration failed to take her side after Argentina invaded the Falkland Islands: The White House pushed her to seek mediation rather than a military solution to the conflict. She also harshly criticized Reagan for failing to get the U.S. deficit under control. In the late 1980s, Campbell observes, Thatcher was also strongly critical of Reagan's "Star Wars" missile defense plan, though she succeeded in keeping her misgivings relatively quiet.

But perhaps the worst (and most visible) disagreement between the two came in 1983, when the United States invaded the Caribbean island of Grenada. The leader of the island was a Marxist named Maurice Bishop, and the Americans were worried that the Cubans were maneuvering to expand their influence there. But Grenada, a former British colony, was a member of the Commonwealth, and the British strongly objected to the American failure to warn them before the intervention. In the end, Thatcher and Reagan managed to weather the disagreement.

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"She Didn't Change All That Much."

Dead wrong. Believe it or not, some revisionists have tried to argue over the years that Thatcher's impact is vastly overrated. There are the Marxists who claim that we exaggerate her effect as an individual, since she was merely responding to the social and political conditions of her time. There are the conservative purists who insist that Thatcher didn't really change Britain in the ways that mattered. But this is an especially hard argument to make.

Andrew Marr comes much closer to the truth in his excellent TV series History of Modern Britain. "Don't think of her as a politician," he says at one point. "Think of her as a one-woman revolution, a hurricane in human form." Thatcher transformed her country beyond all recognition. During her time in office, she succeeded in dismantling the "postwar consensus" that had dominated British politics since the end of World War II. In 1945, the Labour Party won a landslide victory by promising voters a new vision of Britain based on a comprehensive welfare state (including single-payer health insurance), public ownership of key industries, all-encompassing regulation, and a prominent decision-making role for trade unions. Arriving in office at a moment when rampant inflation and industrial decline had made the limits of this model all too apparent, Thatcher proceeded to implement her own ideas of what Britain should be -- to dramatic and lasting effect. "We still live in the Britain that Maggie built," as Guardian columnist Jonathan Freedland notes. Love her or hate her, it's impossible to imagine modern Britain without her.

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Think Again

Think Again: North Korea

North Korea is a lot more dangerous than you think, but that doesn't mean that Kim Jong Un is insane.

"North Korea's not that dangerous."

Wrong. There is no threat of war on the Korean peninsula because the United States and South Korea have deterred the regime for over six decades, or so the thinking goes. And the occasional provocation from Pyongyang -- full of sound and fury -- usually ends with it blowing up in its face, signifying nothing. So why worry? Two reasons. First, North Korea has a penchant for testing new South Korean presidents. A new one was just inaugurated in February, and since 1992, the North has welcomed these five new leaders by disturbing the peace. Whether in the form of missile launches, submarine incursions, or naval clashes, these North Korean provocations were met by each newly elected South Korean president with patience rather than pique.

The difference today is that South Korea is no longer turning the other cheek. After the North blew up the South Korean navy ship the Cheonan, killing 46 sailors in 2010, Seoul re-wrote the rules of military engagement. It has lost patience and will respond kinetically to any provocation, which could escalate into a larger conflict. Second, North Korea crossed a major technology threshold in December, when it successfully launched a satellite into orbit. Though the satellite later malfunctioned, the North managed to put the payload into orbit with ballistic missile launch technology that is clearly designed to reach the United States.

This development appears to validate former U.S. Defense Secretary Bob Gates's January 2011 claim that the regime was only five years away from fielding a missile that could threaten the continental United States. To make matters worse, Pyongyang conducted a third nuclear test in February, which appears to have been more successful than the previous two. Within President Barack Obama's second term in office, North Korea could well be the third nation (after Russia and China) to field a nuclear-tipped ballistic missile targeted at the United States. Moreover, the North has sold every weapons system it has developed to the likes of Iran, Pakistan, and Syria. That's worth losing sleep over.

But there's another point that is often overlooked: North Korea today can threaten all of South Korea and parts of Japan with its conventional missiles and its conventional military. The North can fire 500,000 rounds of artillery on Seoul in the first hour of a conflict. Stability has held for 60 years because the U.S. security alliances with South Korea and Japan make it clear to the North Korean leadership that if they attacked South Korea or Japan, they would lose both the war and their country. And, for half a century, neither side believed that the benefits of starting a major war outweighed the costs. The worry is that the new North Korean leader might not hold to the same logic, given his youth and inexperience.

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"Kim Jong Un is insane."

Don't bet on it. It was easy to make fun of his father, Kim Jong Il, with his bouffant hairstyle, awkward social skills, and dislike of public events. Kim Jong Il was clearly an introvert, and an odd one at that. But most politicians are extroverts -- they love a crowd and love attention, and Kim Jong Un fits the profile: he has a pretty young wife, likes to appear in public and give speeches, he watches basketball games, and visits amusement parks. Much of his behavior may be political theater aimed at convincing his own people that the young general is comfortably in charge, but it is also a contrast with his father's ruling style. Kim Jong Il paid no attention to the public aspect of ruling, whereas his son's visibility and embrace of popular culture appears to be aimed at convincing North Koreans that changes may actually occur under him.

Authoritarian rulers don't long survive if they're truly out of touch with reality. They need to read palace politics, reward friends and punish enemies, and manage competing interests that are vying for power. Kim Jong Il lasted from 1994 until his death in December 2011 without any obvious internal challenge to his rule, a mark of his political acumen and mastery of factional politics. Although Kim Jong Un is inexperienced, he has held power for over a year and appears to have the acquiescence -- for now -- of the most powerful actors in Pyongyang.

More important than asking whether Kim Jong Un is insane is determining whether he is cautious or a risk-taker. Any major shift in North Korean foreign policy will involve enormous hazards. If Kim moves beyond the political theater of the past 60 years -- chest-thumping, name-calling, threatening to turn Seoul into a "sea of fire" -- and actually risks a major military strike against South Korea or even the United States, he is putting his own neck, as well as his country's, on the line.

Kim faces just as many risks if he meaningfully reforms domestic, economic, or social policy. Even within a totalitarian dictatorship, there are different factions, coalitions, and bureaucratic interests that will be injured by any change in the status quo. Economic reforms, for example, may ultimately help the country but will risk chaos in the markets, weaken powerful stakeholders within the vast bureaucracy, and potentially unleash rising expectations from the general public.

An adventurous Kim Jong Un may or may not be good for North Korea and its relations with the outside world. On the other hand, a cautious Kim, who simply pursues the status quo, would mean that North Korean policy will muddle along, with no real change to the frustrating, dangerous, decades-long game of brinksmanship.

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"North Korea is poor because sanctions are working."

Not even close. North Korea is poor because of an outmoded economic policy and self-imposed isolation from the world. The latest round of U.N. and U.S. sanctions, implemented in March, only target the elite. They ban the export of luxury goods and clamp down on individuals and companies that are financing proliferation activities. It's safe to say that the average North Korean does not own a yacht or wear a Rolex.

Blame lies with five bad decisions North Korea has made in the management of its economy. First, in the aftermath of the Korean War, Kim Jong Un's grandfather -- President Kim Il Sung -- focused exclusively on heavy industry development and the military while expecting the country to be self-sufficient in agriculture. In a country that only has 20 percent arable land, that was a huge mistake. Second, rather than seek technologies and innovations like the Green Revolution that helped nations like India make enormous gains in agricultural productivity in the 1960s and 1970s, the North tried to substitute longer work hours and revolutionary zeal. Given the broken infrastructure, this was like squeezing blood from a stone. Third, rather than trade with the outside world, the North went deeply into debt in the 1970s, borrowing and then defaulting on hundreds of millions of dollars in loans from European countries, which forever lost them lines of credit with any country or international financial institution. Fourth, in the 1980s and 1990s, the North undertook extremely wasteful mega-projects, building stadiums, hydropower projects, and tideland reclamation projects -- most of which failed or were never completed. Finally, after the Chinese and Soviets stopping giving aid to the North at the end of the Cold War, Pyongyang relied on humanitarian assistance as a form of income, instead of trying to fix their economy.

One could not have imagined a worse economic plan. This country has allowed an ideology that prizes autarky to dictate economic decisions rather than taking advantage of the benefits of trade, technology, or innovation -- which is why North Korea is one of the only countries in the world to have suffered a famine after industrialization.

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"China won't let North Korea collapse."

For now. Maintaining a close relationship with Pyongyang can be very frustrating for Beijing, and Chinese support for the latest round of U.N. sanctions was a public rebuke. The Chinese leadership has consistently urged its North Korean counterparts to reform its economy, yet Pyongyang just as consistently ignores Beijing's advice. Although there is an increasingly vociferous public debate within China over what to do with its maverick neighbor, the Chinese leadership has so far continued to conclude that propping up North Korea is better than withdrawing its support.

The relationship might not be strong, but it remains. China is North Korea's major trading partner and provides most of the Hermit Kingdom's energy needs; moreover, it has never seriously implemented any of the four rounds of sanctions the U.N. has passed targeting North Korea. Although it agreed to the most recent U.N. resolution, China would actually have to substantially change its approach to Pyongyang to make the sanctions work, and it probably won't.

China has more influence over North Korea than any other country, but less influence than outsiders think. Beijing-Pyongyang relations haven't been warm ever since China normalized relations with South Korea over 20 years ago, and both sides resent the other. But Beijing has few options. Completely isolating Pyongyang and withdrawing economic and political support could lead to regime collapse, sending a flood of North Korean refugees across the border, and potentially drawing all the surrounding countries into conflict with each other -- which could see the devastating use of nuclear weapons. And China fears that any conflict, or a collapse, could put South Korean or even U.S. troops on its eastern border. As a result, Beijing -- much like Washington -- is faced with the choices of rhetorical pressure, quiet diplomacy, and mild sanctions. As long as China continues to value stability on the peninsula more than it worries about a few nuclear weapons, it will not fundamentally change its policy towards its unruly neighbor.

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"Enough carrots can make North Korea give up their nukes for good."

If only it were that easy. Since Ronald Reagan's time in office, successive U.S. administrations have put forward the idea that if insecurity and relative deprivation drive North Korea's obsession with nuclear weapons, then surely the answer is for the United States and neighboring countries to guarantee a peaceful peninsula, and provide money, food, and political recognition to the regime. This has been the basis of the agreements reached with North Korea in 1994 under Bill Clinton and in 2005 under George W. Bush. From 1989 to 2010, U.S. presidents, their national security advisors, and secretaries of state have given written and verbal assurances of non-hostile intent and a willingness to engage to the North over 33 times. Pyongyang acknowledged, rejected, and ignored these assurances, all the while continuing with their nuclear and weapons programs. In fact, the record of U.S. engagement is pretty impressive. In addition to massive amounts of food, energy, and other economic assistance given over a period from 1994 to 2008, two former U.S. presidents (Clinton and Carter) have visited with the North Korean leadership to express U.S. good intentions, as have (in less formal contexts) the New York Philharmonic, Google Chairman Eric Schmidt, and of course Dennis Rodman. Presidents Clinton, Bush, and Obama have each written personal letters directly to the North Korean leader about a willingness to make a deal. And when North Koreans have visited the United States, they have been hosted by everyone from Gov. Bill Richardson to Henry Kissinger, and been given the company of luminaries such as Paul Volcker, Winston Lord, and Bob Hormats.

Clearly, this charm offensive hasn't worked. Signing a peace treaty in advance of denuclearization would recognize and legitimize Pyongyang's nuclear status, leaving it little incentive to shed those weapons. North Koreans have said to me that a peace treaty is just a piece of paper; why would they give up their cherished nuclear program for that?

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