A lot of the attacks and street parties in the U.K. celebrating Margaret Thatcher's death have come from people too young to remember what she did. Judging by their photos, some of her harshest critics on Twitter weren't born yet when she was prime minister. I find this odd.
You would think they'd mainly be bemused by all the fuss over an 87-year-old who left power 23 years ago. As @cagssoc offered: "For those under 25's who want to understand #Thatcher's legacy. I'll use a Harry Potter analogy. She was a 'death-eater.'"
It's a testimony to the way Thatcher was larger than normal politics that her personal brand has lasted in this way. Some of the most common arguments being made are that she destroyed the U.K.'s industrial base through privatization; atomized a once communal society; and freed the banking sector to follow the irresponsible lending policies that have now brought the economy to its knees.
Some of the commentary has been brilliant -- like comedian Russell Brand's piece in the Guardian today, in which he digs back to his young memories of Thatcher's era. Some has been grotesque. Some has been right on the money -- such as the lingering anger over her description of Nelson Mandela's African National Congress as terrorists.
But a lot of the criticism by younger people angered by the financial crisis seems based on a factually problematic rewriting of history: for example, the very common view that Thatcher decimated the U.K. manufacturing industry, in particular coal mining, and thereby destroyed high-wage jobs that would otherwise exist today.
If you look at the World Bank's figures, the share of manufacturing in the U.K. economy has indeed halved since the 1970s, to 11 percent. Yet this is far from unique -- that progression and the 11 percent figure are identical in France, which never had a Thatcherite revolution. With the exception of Germany and Austria, the European countries that still have manufacturing industries worth above 20 percent of the economy are in the ex-communist bloc east, where labor is cheap.
The complaint that Thatcher single-handedly destroyed the coal-mining industry is particularly thin. In 1947, when the U.K. coal industry was nationalized, it employed 700,000 people working 980 pits. By the time Thatcher confronted the unions in the miners' strike of 1984, the U.K. only had 169 collieries and 221,000 miners. Coal had gone from 90 percent of all primary fuels used in the U.K. to 31 percent, in the same period. So the industry was already in rapid decline when Thatcher showed up.
Many of the remaining mines would have closed already by the time Thatcher came to power but were kept alive by subsidies. Governments couldn't afford them -- the U.K. went to the IMF in 1976 -- but they were intimidated by unions who could cripple the economy with strikes (there were 29 million work days lost to strikes in 1979). The same story of secular decline applied to the steel industry and to the U.K. car industry, which the government part-nationalized in 1974, rather than allow the uncompetitive part to die. These were often zombie companies, already dead. Thatcher removed their life support.
The coal industry never rebounded -- there are now just a handful of working pits employing about 3,500 miners in the U.K. Steel also remains weak. The car industry, by contrast, was completely rebuilt by non-U.K. carmakers and is now one of the healthiest in Europe. The U.K. produced 1.6 million vehicles last year, only a little shy of the 1.9 million in France, which held onto its national car makers.
It's true that U.K. governments since Thatcher, Conservative and Labour, haven't done enough to encourage a resurgent manufacturing base. For a while in the 1990s and early 2000s people thought a "post-industrial" economy was desirable. Now that idea seems unbalanced, to put it kindly.
On banking, Thatcher did liberalize the city of London with the so-called Big Bang reforms in 1986. She destroyed the kinds of restrictive practices that we all now laugh at in Greece (pharmacies) and Italy (taxi drivers), complete with fixed-brokerage commissions. But it's odd to blame the 2008 crash on those decisions.
The technology and complex products that drove the financial crisis didn't exist in 1986. Decisions and regulatory failures in the years since Thatcher bear the responsibility: The repeal of the Glass-Steagall Act in the U.S.; the breaking-up of the U.K. regulatory structure under then Chancellor Gordon Brown; and the abject failure to regulate a quickly changing industry seem much more likely candidates than Thatcher's Big Bang.
Thatcher did a lot wrong. But it makes no sense to look at the weakness of today's economy and ascribe all the blame to decisions she made in the 1980s. To do that, you either have to be ideologically blinded, or too young to remember what happened.
(Marc Champion is a member of Bloomberg View's editorial board. Follow him on Twitter.)