BREAKING THE UNIONS BROKE INFLATION:

How Maggie Came to Power: The Soviets dubbed her the "Iron Lady," US President Ronald Reagan called her "England's best man" -- 30 years ago Margaret Thatcher was elected prime minister of Britain. It was the start of a radical free-market revolution which hasn't yet been turned back. (Carsten Volkery, 5/04/09, Der Spiegel)

In the following winter came Thatcher's breakthrough. It would become known as Britain's "winter of discontent." In its fight against inflation, the government set a limit of five percent on pay rises during the wage bargaining round. Companies that failed to stick to the limit would lose their public contracts.

The five-percent rule led to massive strikes. Truck drivers, garbage collectors and hospital workers took to the streets. Even gravediggers went on strike in Liverpool. Gas stations and shops went unstaffed, hospitals only took emergency patients, and public squares were piled with garbage. For several weeks in January 1979, anarchy ruled. On January 22, unions held a "National Action Day" and around 1.5 million people refused to work.

Thatcher's moment had arrived. Until then she hadn't felt confident enough to challenge the unions. She was a careful politician, worried about her electoral chances. But now she sensed that the public would accept a sharper tone. She presented herself as a leader who was ready, in the name of the nation, to fight militant unionists. "If someone is confronting our essential liberties, if someone is inflicting injury, harm and damage on the sick, my God, I will confront them," she said in a radio speech on January 31, 1979.

Thatcher hit a nerve. Her poll numbers rose, and soon the Tories led Labour by 20 percentage points. [...]

Thatcher now counts as the founder of modern Britain. All prime ministers since have been her heirs, above all Tony Blair, who changed the Labour Party as radically as she changed the Tories. "The real triumph was to have transformed not just one party but two," said Geoffrey Howe, Thatcher's earlier finance minister, at the celebration of her 80th birthday.

In the absence of Margaret Thatcher the UR would already have bailed out the Automotive Unions and the car companies they depend on.

Posted by Orrin Judd at May 4, 2009 7:57 AM