Mrs Margaret Thatcher & the political economy of courage

Commentators who disliked Margaret Thatcher’s policies would often say she was a “polarising figure”. But changemakers often seem polarising: you can’t implement radical transformation by keeping most people happy. Many assessments that’ll follow her death will also debate this so-called “polarisation”. But it will all be mostly irrelevant.

Thatcher’s greatest achievement was to change economics in the face of toxic politics, and then change the politics of her country itself. Whenever anyone needs to find an example of what politics of conviction — the conviction informed by a faith in the market and in entrepreneurship — can achieve in a democracy, Thatcher would be a natural candidate.

Thatcher started a correction towards market that spread across countries and, therefore, should probably be credited with improving the economics of not just her country. The superficial reading of the post-financial crisis world has been that the tilt to market has been condemned by recent history and, therefore, all political figures, Thatcher included, who championed liberal economics stand condemned, too. No such thing can be concluded.

The regulatory mistakes that led to the investment bank-led crisis didn’t falsify the basic principles of Thatcherism: the less the state intervenes in economic life, the less collectives rule over individuals, and the more the number of choices people have, the better it is for everyone.

As India struggles to get out of a 5% growth trap created largely by domestic policy timidity, and as we approach general elections whose outcome will have a deep impact on growth and incomes in the medium term, it is natural to ask if any of our presumed leaders across parties possess Thatcher’s conviction and courage.