Originally Posted by donsutherland1 If one wants to argue that the manufacturing industry fared uniquely badly largely on account of Prime Minister Thatcher's governance, then one has to be able to reject the hypothesis that the contraction in that industry that coincided with the 1979-81 recession was worse than should have been expected.

Instead, what the data reveal is that the decline in manufacturing had commenced well prior to Margaret Thatcher's becoming Prime Minister.

A large part of the story for the stickiness in unemployment can be attributed to the secular decline in manufacturing.

Rather than pointing blame at the political leaders with whose policies one might disagree given the mismatch between the start of manufacturing's decline and her becoming Prime Minister...

In any case, as the manufacturing industry's relative decline began in the 1970s, one cannot lay blame for a phenomenon that has much more to do with larger economic forces than politics, at the feet of Prime Minister Thatcher.

No. One needs to get to the origin of when the problem commenced. Moreover, a rapid decline in manufacturing employment was not unique to Margaret Thatcher's tenure.

The following graph (with periods for various Prime Ministers transposed) illustrates what was going on with respect to manufacturing employment.



Key:
1. Prime Minister Harold Macmillan (1957-63), Conservative
2. Prime Minister Sir Alec Douglas-Home (1963-64), Conservative
3. Prime Minister Harold Wilson (1964-70), Labour
4. Prime Minister Edward Heath (1970-74), Conservative
5. Prime Minister Harold Wilson (1974-76), Labour
6. Prime Minister James Callaghan (1976-79), Labour
7. Prime Minister Margaret Thatcher (1979-90), Conservative

Source of Graph: Bernard Alford, "De-industrialisation," Economic History Society, Autumn 1997.

Several points are clear:

1. The decline in manufacturing employment commenced more than a decade before Margaret Thatcher became Prime Minister.
2. The general decline continued throughout the period prior to Margaret Thatcher's tenure with a few brief periods where employment declines leveled off or rose slightly.
3. The general decline in manufacturing employment continued under the watches of both Labour and Conservative Prime Ministers.

In the end, the data (both with respect to trends in real manufacturing output and manufacturing employment) demonstrate that even as a matter of ideology one might wish to apportion blame on a given Prime Minister, the secular decline in manufacturing was on account of forces that transcended politics. Regardless of which party governed, the decline in manufacturing was ongoing and pronounced and that all but rules out political policy playing a major role in that decline. Arguably, the strongest explanation for that secular trend is the fundamental economic transition toward a more services-oriented economy that commenced around 1970 +/- a few years.

Originally Posted by donsutherland1 One needs to get to the origin of when the problem commenced. Moreover, a rapid decline in manufacturing employment was not unique to Margaret Thatcher's tenure.

...the secular decline in manufacturing was on account of forces that transcended politics.

Regardless of which party governed, the decline in manufacturing was ongoing and pronounced and that all but rules out political policy playing a major role in that decline.

One witnessed a similar phenomenon during and after the 1973-75 recession. One cannot delineate the Thatcher era as uniquely suffering from negative deindustrialization while ignoring similar economic behavior (output and employment trends in manufacturing) that preceded the Thatcher era.

Originally Posted by donsutherland1 One witnessed a similar phenomenon during and after the 1973-75 recession.

Had the 1973-75 recession been as deep as the 1979-81 recession, one would almost certainly have seen a contraction in real manufacturing output that rivaled that which occurred during that recession. That showed up well in the Beta figures, both for the post-1948 recessions and for the 1973-75 one.

Moreover, it should also be noted that a share of Britain's manufacturing jobs may well have been preserved during the 1970s only on account of nationalization of firms. If so, such an outcome represented a "massaging" of the employment situation via public intervention to retain a larger number of jobs than would otherwise have existed. On March 20, 1976, The New York Times revealed, "About two years ago...British policy shifted strongly to taking over companies often severely troubled ones, primarily to preserve the jobs of their workers. A machine-tool company, an electronic company, a newspaper, and last year, the country’s biggest automobile producer, British Leyland, were nationalized in the face of independent studies showing little hope for the companies."

On July 24, 1977, The New York Times noted of the British economy, "In three years, output has not risen, prices have increased by about 80 percent, the pound has lost close to half its value and unemployment has risen… The underlying questions remain unsolved: unusually low productivity, especially as compared with Britain’s rivals such as Japan, the United States, and West Germany; a manufacturing plant that is in large part antiquated; a tax structure that has tended to discourage the formation of capital and investment in new equipment."

All said, there is little doubt that--both from the UK National Statistics information provided earlier throughout this thread and the news reports of the time--Britain's manufacturing crisis, so to speak, began prior to Margaret Thatcher's tenure. Negative deindustrialization was occurring before Prime Minister Thatcher took office. However, while political policy e.g., tax disincentives to capital formation, likely made a modest contribution to the pre-Thatcher erosion of Britain's manufacturing sector, larger economic forces that transcended politics probably played the far larger role, prior to, during, and after Prime Minister Thatcher's tenure.

Originally Posted by donsutherland1 Had the 1973-75 recession been as deep as the 1979-81 recession, one would almost certainly have seen a contraction in real manufacturing output that rivaled that which occurred during that recession. That showed up well in the Beta figures, both for the post-1948 recessions and for the 1973-75 one.

On March 20, 1976, The New York Times revealed, "About two years ago...British policy shifted strongly to taking over companies often severely troubled ones, primarily to preserve the jobs of their workers. A machine-tool company, an electronic company, a newspaper, and last year, the country’s biggest automobile producer, British Leyland, were nationalized in the face of independent studies showing little hope for the companies."

All said, there is little doubt that--both from the UK National Statistics information provided earlier throughout this thread and the news reports of the time--Britain's manufacturing crisis, so to speak, began prior to Margaret Thatcher's tenure.

I will not ignore that the deterioration in manufacturing real output (which never recovered to the pre-1973-75 recession peak prior to the onset of the next recession) and manufacturing job losses (that had commenced following the mid-1960s) all were underway well before Margaret Thatcher assumed office. The data toward that end are conclusive.

Furthermore, the magnitude of what took place in terms of the decline in real manufacturing output during the 1979-81 recession was to have been expected given the magnitude of the recession.

Therefore, there is no need to try to hold Prime Minister Thatcher solely responsible for negative deindustrialization, as that process began prior to her gaining office as Prime Minister. Moreover, if one examines broader policy outcomes ranging from British foreign policy to economic privatization, Prime Minister Thatcher left Britain quite a bit better than she had found it upon coming to office in spite of the magnitude of difficulties she had to confront along the way. In sum, that is why the respondents to the poll hold such a high opinion of the former Prime Minister. In my view, the public's ranking is both not surprising and it is quite well-deserved.

Originally Posted by donsutherland1 I will not ignore that the deterioration in manufacturing real output (which never recovered to the pre-1973-75 recession peak prior to the onset of the next recession) and manufacturing job losses (that had commenced following the mid-1960s) all were underway well before Margaret Thatcher assumed office.

Therefore, there is no need to try to hold Prime Minister Thatcher solely responsible for negative deindustrialization, as that process began prior to her gaining office as Prime Minister.

Moreover, if one examines broader policy outcomes ranging from British foreign policy…

…to economic privatization

In my view, the public's ranking is both not surprising and it is quite well-deserved.

Aside from reversing Argentina's invasion of the Falkland Islands and Britain's reliable and important contributions within the framework of NATO, Prime Minister Thatcher also played an important behind-the-scenes role in paving the way for the peaceful conclusion of the long-running Cold War.

Indeed, later former Soviet President Mikhail Gorbachev recounted:

Margaret Thatcher did much to support our perestroika... she genuinely wanted to help us and to mobilize the efforts of the Western countries in support of our policies...

Margaret Thatcher was not an easy partner for us, and her fierce anti-Communism would often hinder her from taking a more realistic view on various issues. Still, one must admit that in a number of cases, she was able to substantiate her charges with facts, which eventually led us to review and criticize some of our own approaches. All in all, she was a strong advocate of Western interests and values, indeed.

With respect to one of the clashes they had over Prime Minister Thatcher's "fierce anti-Communism," Gorbachev wrote:

Mrs. Thatcher had maintained that the Soviet Union aspired to 'establish Communism and domination worldwide' and that 'Moscow's hand' could be seen in virtually every conflict in the world... Looking back I must admit (and it seems to me that I have already done so) that our policy towards developing countries had been highly ideological and that, to a certain extent, Mrs. Thatcher had been right in her criticisms.