The Conscience of a Liberal

I'd naively assumed that Paul Krugman's book must not be available yet, since I haven't even gotten a free copy yet. Instead, it seems that his publisher arrogantly assumes that sales will do well even if I just ignore it. Or, perhaps, that I won't ignore it even if they don't send me a free copy. Indeed, following this fairly positive review from the ideologically unsympathetic Tyler Cowen, I think I may need to buy a copy for myself. Meantime, Cowen ends with a question:

Is Paul Krugman willing to come out and simply pronounce: "Margaret Thatcher turned the UK around and for the better"? If so, how does this square with his broader narrative? And if not, why not?

With the proviso that I don't know much about UK economic history, it's clearly the case that despite the personal and ideological linkages between Thatcher and Reagan they were operating from very different baselines. It can easily both be the case that the UK in the late 1970s was too far left on the main issues being debated at that time and that the United States in the late 2000s is too far right on the main issues being debated at the moment. After all, even after Thatcher Britain has a health care system that's so statist virtually nobody on the American left will defend it.

Comments

Not to mention that Thatcher's privatization of the UK pension system was a total disaster, consistent with Krugman's narrative.

Posted by anrig | October 10, 2007 4:49 PM

Ever heard of calling a publisher? It's like reporting, only easier.

Posted by Charles P | October 10, 2007 4:56 PM

I just finished Krugman's book and I thought it was great. The best part is how concrete it is in its prescription. Basically win the Presidency, increase the lead in Congress in 2008 and then use that momentum to get universal health care passed. In fact we should be using the election year to set it all up and using the expiring tax cuts to pay for it all (if we can't get single-payer through, which would be much much better). At the very least any plan should include a government option that every sane person will migrate toward anyway due to it inevitably being less expensive.

I say screw this grand theme thing we progressives have been trying to figure out for 6 years and instead just hammer on Universal Health Care. That's what we stand for and that's enough. If that works as well as it should, then the rest of the progressive agenda will be made possible.

Posted by kj | October 10, 2007 5:12 PM

that cowen quote smells a lot too much like the standard right-wing trope of mandatory maoist repudiation, just in reverse.

'is paul krugman willing to denounce ward churchill? if not, why not?'

maybe in context it is not as thuggish as that.

but i still insist that cowen repudiate the tactic, even if he has never used it!

and if he doesn't, then we'll certainly know what conclusions to draw from that, won't we.

Posted by kid bitzer | October 10, 2007 5:24 PM

After all, even after Thatcher Britain has a health care system that's so statist virtually nobody on the American left will defend it.

Good point. I think an argument I don't see made often enough publicly -- especially to the persuadable middle (although I do hear it, of course, in the blogospheric left) is that some kind of universal national health care is perfectly compatible with a robust, vigorous, capitalist economy. I think when one visits London today, one finds oneself in an absolute temple to unbridled, plutocratic capitalism fully competitive with the craziest excesses of the United States. Yet somehow Britain manages to extend meaningful access to healthcare to everybody.

Posted by Jasper | October 10, 2007 5:37 PM

Cowen is a notrious thug. Brushes his teeth in jackboots every morning.

Posted by Christopher | October 10, 2007 5:41 PM

exactly.

anyone who keeps his teeth in jackboots gets what he deserves.

Posted by kid bitzer | October 10, 2007 5:50 PM

After all, even after Thatcher Britain has a health care system that's so statist virtually nobody on the American left will defend it.

The problem (and hence, why perhaps the left doesn't defend it) with Britain's health care system is that they don't spend enough money on it, "statist" as it is. Which may be another way of saying it isn't statist *enough*...

Posted by McKingford | October 10, 2007 6:13 PM

Liberals don't have consciousness, why else would they kill babies?

Posted by Just Jane | October 10, 2007 6:21 PM

i've spent a while trying to figure out how best to formulate the essential inapplicability of thatcher england to anything in american political economy, and i guess what i would say is, insofar as cowen can show us an american economy in which the commanding heights of the 1948 economy were nationalized and power was shared between the government and the trade unions within those industries, some of whose leadership were outright stalinists (although many were not), then we can discuss whether the thatcherite prescription would be the optimal policy for america....

Posted by howard | October 10, 2007 7:16 PM

"After all, even after Thatcher Britain has a health care system that's so statist virtually nobody on the American left will defend it."

I was under the impression that Michael Moore's "Sicko" was celebratory about the UK's health system.

Posted by open faced club sandwedge | October 10, 2007 7:56 PM

You're about as bold when it comes to economics as Hillary is on torture. "It could well be the case... yada yada yada." I've voted Democratic every year since 1968, when I voted for Dick "Grassy Knoll" Gregory, and will say that Thatcher did Britain's economy a major favor, as did Ronnie for the U.S., and they both did the world a favor by deciding that they could trust Gorby (not to mention convincing him that he could trust them.)

Posted by Alan Vanneman | October 10, 2007 8:14 PM

Actually, Paul Krugman was quite critical of Thatcher in his past works of the 90s. He is one of the few commentators to point out Thatcher's failures administering state pensions, directing monetary policy, and privatizing utilities and railroads. She was not as successful a Prime Minister as many in America think; she was forced out by her own party in the late 80s and early 90s. Paul Krugman I believe addresses all of this in his work Peddling Prosperity, where he devotes a chapter to the Conservative policy failures of the 80s.

Word of the wise: Ignore what Andrew Sullivan states on this topic, as it would be wise to ignore a lot of what he stated on his blog over the last 8 years.

Posted by Frank | October 10, 2007 8:55 PM

Matt,

I'm old enough to remember a few things. Either Time or Newsweek said just before or early after her election (I think the former; this was very near to when John Paul I died), and I am paraphrasing, "Margaret Thatcher's vision for Britain would leave it leave less driven by free market theory and more heavily regulated than the Gerald Ford's America."

What is discussed as "reasonable" has become radically constricted in the last two decades, and reasonable balance is only now starting to recur.

Posted by Matt | October 10, 2007 9:00 PM

Re Tyler Cowen question to Krugman

It's legit to ask someone with a world view about examples that might undermine their arguments. However, the way the question is phrased is annoying. Every theory has instances where it seems less strong, and in this case their are lots of possible explanations. Presenting a sentence in quotes and saying will so and so agree with this is stupid. Krugman or anyone are free to phrase things anyway they want.

Re the idea people of the American left won't defend the British health care system

This is true largely because people think the French and other European systems are better so I don't know that its a very strong point.

Posted by Christopher Colaninno | October 10, 2007 9:05 PM

Frank,

I have a friend who spent a year at Oxford, 1988-89. I wa sin Europe on business and spent a week's vacation visiting him. One day there was a power outage that seemed to be taking a long time to fix, and one of his room-mates asked how they got a hold of the power company. Another joked that you should look in the phone book under recently privitized industries. I got the impression that jokes like that were pretty common and the sentiment was fairly wide-spread.

I think Thatcher is much more hughly regarded by the lunatic right here than she ever was in Britain. And their hero worship of her is about as grounded in the reality of her actual performance to about the same degree that their worship of St. Ronnie is.

Posted by Eric K | October 10, 2007 9:15 PM

Actually, Cowen is pretty good, and his comments section not always crazy, unlike McArdle.

Posted by mickslam | October 10, 2007 9:26 PM

And their hero worship of her is about as grounded in the reality of her actual performance to about the same degree that their worship of St. Ronnie is.

You've got to be kidding. Thatcher's policies, which have been largely continued by Tony Blair, revolutionized Britain's economy. In the 1970s, it was the poor man of Europe. Today, it has one of the strongest economies in the region.

Posted by Mixner | October 10, 2007 9:56 PM

You've got to be kidding. Thatcher's policies, which have been largely continued by Tony Blair, revolutionized Britain's economy.

Which is why there will be several million people lining up to piss on her grave when she finally dies. There's a strange presumption in the British political class that the passage of time heals old wounds. In this case, not so much.

I think Thatcher is much more hughly regarded by the lunatic right here than she ever was in Britain.

Yeppity: you won't see Cameron kissing Maggie's ring in the way Thompson and Giuliani have. (Or Brown, for that matter.) Of course, chances are that Thatcher wouldn't have made it past a single term were it not for her nice little colonial war.

After all, you find some of the bigger Thatcherites -- the ones who were always borderline creepy back in the late 80s, when it was clear she was losing her marbles -- now the beneficiaries of AEI sinecures.

Posted by pseudonymous in nc | October 11, 2007 12:27 AM

Which is why there will be several million people lining up to piss on her grave when she finally dies. There's a strange presumption in the British political class that the passage of time heals old wounds. In this case, not so much.

What you point out simply shows that there's a large and healthy left wing in the UK -- most of it still very hostile to everything that Thatcher represents (and much that Blair represents, too). It certainly doesn't say anything about the relative success of her policies. I think you can make a pretty strong argument that American presidential administrations don't have all that much impact on the economy. I think it's tougher to make this argument with respect to British governments, however. A British PM by definition has a working majority in the legislature, and very few constitutional checks on what he/she can do, provided sufficient support exists within the party. There's no question that British economic policy changed fundamentally during the Thatcher years, and there's no question that the British economy was healthier in a fundamental way at the end of the 80s than at the beginning (temporary excesses not withstanding).

British lefties would still no doubt find plenty to gripe about had Margaret Thatcher never been born, but they'd be much more poorly paid lefties doing their griping in much cheaper houses.

Posted by Jasper | October 11, 2007 12:40 AM

IIRC, Ezra Klein had a lovely defense of the NHS, even if he was critical of it in some respects.

After spending a summer in England when I managed to get into more medical trouble than I ever thought possible, I became intimately familiar with the NHS. It is, without a doubt, one of the finest health services in the world. While it has its problems (lack of funding being its primary difficulty), this lefty has no qualms about defending it.

Posted by Trickster Paean | October 11, 2007 12:49 AM

Thatcher couldn't be an American Republican today. Thatcher could actually win a war.

Posted by Reality Man | October 11, 2007 12:50 AM

"After all, even after Thatcher Britain has a health care system that's so statist virtually nobody on the American left will defend it." - MY

Right. And even under the centrist Third Way "New Labor" folks, the folks whom Old Labor would demonize as "Thatcher lite", Britain is trying to solve its education problems by turning private schools into public ones. The two countries are just in very different places, ideologically and systemically.

Posted by brooksfoe | October 11, 2007 4:23 AM

My name links to a blog post duplicating figures from Piketty and Saez. Compare and contrast Figures 2 and 3 in that post.

Thatcher's Britain fits in well with what I assume is Krugman's story.

Posted by Robert | October 11, 2007 6:38 AM

"there's no question that the British economy was healthier in a fundamental way at the end of the 80s than at the beginning (temporary excesses not withstanding)."

I would challenge that, precisely questioning the word "fundamental". Thatcher's solution to the crisis of heavy industry in the UK was to rapidly increase the pace of deindustrialization, and encourage the London financial services sector. If you only look at the most aggregate numbers, that mix of policies does appear better.

But I would argue that policy in a long-term sense is a bad one: it's irreversible, and left the UK almost entirely dependant upon a single factor: the success of a handful of trading desks, and how much trading volume the London financial markets could generate. And that, of course, inherently comes along with the incredibly massive income/wealth inequality generated by financial markets.

That inequality in a highly class driven society like the UKs is particularly troubling.

Posted by burritoboy | October 11, 2007 9:13 AM

The more nuanced argument is this. Even given that Thatcher was right on the principles - that British unions were too powerful; that British heavy industry was doomed; that the state owned or controlled too much of the economy - she went about correcting these in an unnecessarily brutal and vicious way.

It's difficult for people in the south-east of England, and even more so for foreign visitors who may only be familiar with London, to understand the extent of the destruction that Thatcher's policies produced in the industrial areas of the Midlands, the north of England, south Wales and the west of Scotland (all, of course, Labour heartlands).

Picture what happened to the Rust Belt towns of the US; but picture it happening, not as part of a general economic trend, but as the deliberate result of a government policy based on partisan political calculation.

The recovery of the former industrial areas of Britain in the last 10-15 years is one of the big untold stories of British economics. Things were very, very different in 1987 or 1992, compared with the way they were in 1997 or 2007.

Posted by ajay | October 11, 2007 9:38 AM

The more nuanced argument is this. Even given that Thatcher was right on the principles - that British unions were too powerful; that British heavy industry was doomed; that the state owned or controlled too much of the economy - she went about correcting these in an unnecessarily brutal and vicious way.

It's difficult for people in the south-east of England, and even more so for foreign visitors who may only be familiar with London, to understand the extent of the destruction that Thatcher's policies produced in the industrial areas of the Midlands, the north of England, south Wales and the west of Scotland (all, of course, Labour heartlands).

Picture what happened to the Rust Belt towns of the US; but picture it happening, not as part of a general economic trend, but as the deliberate result of a government policy based on partisan political calculation.

The recovery of the former industrial areas of Britain in the last 10-15 years is one of the big untold stories of British economics. Things were very, very different in 1987 or 1992, compared with the way they were in 1997 or 2007.

Posted by ajay | October 11, 2007 9:40 AM

Well said ajay!

It's worth adding that what turned Britain around was the North Sea oil revenues rather than the right wing policies and if we'd adopted different policies (a la Norway) the country might be in a lot better state than it is now.

Posted by Meh | October 11, 2007 12:05 PM

It's again worth noting that governments often have less influence on the economy than people think.

Thatcher presided over a revival in the British economy, from a dreadful state to a decent state. People remember her positively for *that*, and for little else (yes, people approved of winning the Falklands War, I suppose). But it really wasn't significantly due to her; North Sea oil and other trends are primarily responsible.

It's also clear that the previous governments had gone somewhat overboard with nationalization, and that the Labour Party suffered from union "regulatory capture". Therefore people remember Thatcher for reversing those extremes -- but Thatcher proceeded to go overboard with privatization (public utility and transport infrastructure, as natural monopolies, really belong in the public sector, unlike coal mines), and suffered from corporate/financier "regulatory capture". She replaced one set of mistakes with an arguably worse set.

Looking on it objectively, John Major was the Conservative who deserves accolades.

Posted by Nathanael Nerode | October 12, 2007 2:20 PM

I think there is something missing from the debate in these comments: Monetary policy. Britain had too restrive of a monetary policy pre-Thatcher, and she did not reform it. But when Major's government in the early 90s stopped trying to peg the pound to other Continental European countries' currencies, Britain's economy grew significantly. New Britania is for Britain's success in the 90s, not 80s.

The 90s have been great for Britain not because of Thatcher, but due to her in-party adversary who deposed her, along with monetary policy reforms that the Blair government enacted, such as making Britain's central bank independent.

Its funny, the pro-Thatcher comments do not show strong evidence of how the 80s for Thatcher was so much better than the 70s. Strikes are bad, but so are power outages, trains not arriving on time, and monetary policy choices that send the economy reeling.

Posted by Frank | October 12, 2007 6:42 PM