Part of the New Guinea Commerce Winners Don’t Cheat Series.
By Sean Jacobs
In 1984 British Prime Minister Margaret Thatcher was in the fight of her political life. In 1979 she inherited a Britain divided not only by crime and terrorism but with the twin challenges of astronomically high inflation and unemployment. This meant that, each day, people’s money was becoming increasingly worthless and there were no jobs for millions of Britons.
Pinnacle to her challenges, however, was a coal industry that was unproductive, costing huge amounts of taxpayer money and acting as a drag on the British economy. Each time Thatcher proposed putting more people into work, or shutting down an unproductive mine, she encountered furious union opposition and ‘outrageous displays of union muscle.’ In 1984 she wanted to shut twenty (and eventually seventy) mines but came across the same expectations of union friction – picket lines, disruptions to businesses, mass strikes and police clashes.
A stalemate ensued but eventually the unions – used to having their way and bringing down previous governments – voted to return to work. Thatcher, as many say, eventually won ‘the war of attrition’ and turned around the British economy by her free-market reforms, tax cuts, privatisations and reigning in government spending. She is a pivotal figure in world history not just for these reforms but for helping to defeat the Soviet Union – hardly a small feat – and crushing Argentina’s military aggression in the Falkland Islands.
Her performance during the 1984 miners’ strike is an instructive lesson in adversity but not in the way you might think. Thatcher clearly needed huge amounts of personal resilience to deliver the reforms she believed in. However, central to her strategy in the 1980s was to build up coal reserves in advance. This meant that the unions could strike for as long as they wished but they could not hold Britain hostage.