April 17, 2013
The Great Albion is bidding farewell to the Iron Lady on this day. Thousands came to show their respect for Lady Thatcher while her casket, covered with the union flag, was carried from the Palace of Westminster to St Paul’s Cathedral. Margaret Thatcher, who was the most famous of the twenty prime ministers of the Twentieth Century, was one of the few handfuls who changed the world. She is the only female British Prime Minister ever and the only one who held the office for three terms.
Lady Thatcher, who was originally from a poorer district in London’s east, enrolled at Oxford University where only the wealthy attended. She majored in chemistry and later on, in 1955, became a politician. After entering politics, she brought about reform, not only to the Conservative Party, but also to British politics. Her privatization policy started revolutionary changes all around the world. The Soviet Union collapsed because of rebellions against dictatorship. The Economist newspaper wrote that Winston Churchill won a war, but he never created an “-ism” like Thatcher did. After leaving office, Margaret Thatcher was made a Baroness by the Queen and became a peer in the House of Lords.
There are several important lessons from Thatcherism that could make substantial contributions to the development of Mongolia.
ONE. A GOVERNMENT MUST BE SMALL
Margaret Thatcher rescued the British economy from a recession in the 1970s. Her legacy even made former Prime Minister and Leader of the Labor Party, Tony Blair, conclude that economy was better off in the hands of private sector.
A small government has smaller taxes. The Telegraph Newspaper wrote that the average income tax rates imposed on a British company were more than 80 percent in 1979 and were reduced to 40 percent by 1990 when Thatcher left office. This was achieved by encouraging the private sector, expanding businesses and tripling the national tax revenue.
The size of the government is determined in comparison to the ratio of government expenditure to GDP. It is viewed that this ratio should be no more than 20 percent in a market economy. On the other hand, in a socialist economy, this ratio is more than 50 percent and the government has large deficits which increase debts and force taxes to be higher leaving the private sector incompetent. This is very well demonstrated by Mongolia’s example today.
TWO. GOVERNMENT PROPERTY MUST BE LIMITED SINCE IT SPECIFICALLY BELONGS TO NO ONE
Thatcher carried out privatizations in natural gas, coal, communications, power and aviation companies that belonged to the government and sold state-owned apartment blocks to their residents. It is said that the Queen said “no” to a BBC privatization, in fear that it might prompt negative public reaction. Today, every company Thatcher privatized has reached enormous success and its name is known everywhere in the world.
Mongolia has many state-owned companies such as MIAT Mongolian Airlines and Erdenet today, but they both actually belong to whoever holds ruling power. Therefore, these companies need to be privatized by leaving 40 percent of the shares to the government to start with, selling 10 percent to company staff and offer the rest of the shares on the stock exchange so that they may be sold to international companies with certain conditions.
When these measures are taken, those companies will stop being a pocket full of money for politicians. It is pathetic that the very same Democratic Party which seized ruling power, is now following the Mongolian People’s Party’s ideas and saying, “The government should have its own mean of vehicle” – even after the MIAT corruption scandal was discovered. If MIAT remains in the hands of the government, its deficits will never decrease and, most importantly, it is slowing down the development of the Mongolian airline industry. When privatized, people will also realize that being involved in politics will no longer be profitable and the number of wanna-be-politicians will be reduced.
Local governments should still be able to have public property however. They can jointly own their land, forests or parks and rent them out to the private sector. Then, the money can be spent on local development and improving people’s livelihoods.
THREE. EVERYONE HAS THE RIGHT TO CHOOSE
Only a democratic country with a market economy provides its citizens with the right choose where and how to live. Thatcher showed with her own story of life that the right to choose is the basis of freedom and liberty. She said it loudly, that in a conservative society, a female is equal to her male counterpart. She did so by going to a famous university despite coming from a poor family, then by becoming the leader of the student union and eventually the British Prime Minister.
Margaret Thatcher is the one who brought about revolutionary changes to a society and became the leader of the most conservative and “stupid” (as she once described) party in Britain, where political positions were given to the rich or the noble, rather than those who had talent and skills.
Thatcher thought that the foundations for a strong and powerful country are the freedom and liberty of every single person. One of the greatest values in life is the right to choose a dream and to fight for it. She repeatedly stated that everyone should choose how they live and that government involvement must be minimized.
FOUR. PUBLIC GOVERNANCE MUST BE BASED ON PRINCIPLES
When giving a speech at a European university in 1988, Thatcher said that law abiding is the only thing that makes a civilized society different from a non-civilized one. She also acknowledged that everyone can have their personal differences and opinions and that this is the basic principle for development. Therefore, personal freedom along with other rights must be protected at all times.
Margaret Thatcher said that the 1970-80s European economy showed that an economy based on hard work and personal efforts works better than a centrally planned one. She also stated that a centrally controlled economy with state-owned properties is a recipe for slow development while a free market economy, legitimately governed, is far more efficient. Lady Thatcher viewed that the government should work to provide an environment for a market economy, expand personal choices, protect the right to choose and reduce involvement from the government. She supported reducing any restrictions imposed on business and free trade.
FIVE. THE IMPORTANCE OF PERSONAL ACCOUNTABILITY AND HARD WORK
After being appointed as Secretary of State for Education and Science in 1970, she abolished the free distribution of milk to high school students in order to cut public expenditure. This attempt of hers to cut spending gave her the nickname “Milk Snatcher” and because of this, Oxford University refused to award her an honorary doctorate degree in 1985.
The free distribution of goods and services, which causes excessive amounts of public expenditure, is not always efficient. As a liberal, she always said that people should not be treated in the same way by the government because their needs and opportunities are not always the same.
Thatcher also always demanded that her ministers not treat matters emotionally and spend excessive amounts of money in this way, by distributing free services to everyone.
The New York Times wrote that the principles of Thatcherism are the belief that economic freedom and individual liberty are interdependent, that personal responsibility and hard work are the only ways to national prosperity, and that free-market democracies must stand firm against aggression.
The “best man in England,” as Ronald Reagan once said, has passed away. Not everyone thinks in the same way about Margaret Thatcher, a person who had great skills and talent. However, if we learn the right lessons from her policies and legacy, there is no doubt that they will be a good instrument to aid the development of our own country.