It is wicked for the British Left to celebrate Baroness Thatcher’s death, but even wickedness has its reasons. She removed state subsidies for coal mining and other inefficient state-supported industries and turned the entrepreneurs lose. The entrepreneurs exploited Britain’s comparative advantage as a global metropole for finance and trade.
Proportion of UK GDP by Sector
Industry (including energy) fell from 35% of GDP in 1980 to just 15% today, while finance rose from 17% to 34%–a staggering GDP contribution, according to OECD data. The world’s investment banking talent poured into London, and the trading floors of the global firms became polyglot pirate ships. London became the great center for derivatives and structured products in particular.
In 2004 a Bank of America colleague invited me to hear the triennial piano competition at Leeds, the largest city in Yorkshire. Once a great northern industrial city, the great mills of Leeds were now clubs where the city’s youth drank and vomited out their weekly stipends every Saturday evening. The north of England is for the most part a post-industrial moonscape of poverty and ruin. The great wealth of the financial sector in the southeast never made it to the north–which explains why Thatcher’s Conservatives have become a southeastern party.
England was especially hard hit by the financial crisis of 2008, given the economy’s huge dependency on financial services. Even so (as the diagram below from the UK statistics office shows) the rest of England suffered far more than London and its environs.
This was not Baroness Thatcher’s fault. The jobs were there, but the people of the de-industrialized north left them to immigrants, preferring to remain state dependents. London became a paradise for upwardly-mobile, enterprising young people from all over Europe and beyond, but a monument of envy for the rancorous north. History, to paraphrase Friedrich Schiller, brought forth a great moment, but the moment encountered a mediocre people. A large part of the British population sees no benefit from the growth that Thatcher’s free-market reforms set in motion. Don’t bother to explain to them that without the entrepreneurial boom in banking, Britain would not have had the money to keep them on the dole. Don’t bother to explain to them that the same trends continued under Tony Blair’s Labor government. They will still hate Baroness Thatcher to the point of dancing on her grave.
It is disturbing to think that Margaret Thatcher might have led the last wave of British national feeling. Her body was presented today at the altar of St. Paul’s Cathedral, the national shrine where Britain interred its greatest military heroes, Nelson and Wellington. It is getting harder hard to find Britons who are still patriots, that is, who still believe in their nation’s special virtues.
If we become a nation of takers, as Nicholas Eberstadt titled his 2012 book on the explosion of state dependency, we will emulate our mother country in its decline. I don’t want to go to London any more. It frightens me.