European Economy and Political Issues - Essay Example

I. Introduction: The controversy surrounding Thatcher's legacy A. Thatcher's policies have had an indubitable impact upon British political and economic life and chief amongst these policies are those relating to the country's trade and labour unions B. Confrontation with the labour unions culminate in the severe curtailment of the latter's powers. C. Although criticised for her treatment of the unions, the activities of Britain's unions left the government with little other option. II. Whether or not Thatcher's political and economic policies were responsible for the reduction in the powers of Britain's unions is debatable. A. By 1979 technological developments had effectively weakened Britain's labour unions. B. Certainly, unions were strong but with he weakening of the coal, steel and rail industries, labour unions weakened accordingly. III. Despite the fact that the powers of the labour unions had been severely curtailed by economic circumstance, confrontation with Thatcher's Conservative government was inevitable. A. Strikes were a constant feature of British economic life B. Labour strikes effectively paralysed entire industries and weakened the nation's economy. C. The adverse economic effects of union activities determined confrontation and clash with Thatcher's government. IV. Determination of whether or not Thatcher had any option for the resolution of the British labour union problem other than the curtailment of their power should be proceed from an acknowledgement of, and emphasis upon, the fact that union leaders were effectively engaged in the abuse and misuse of labour union power. A. Strikes were used as a negotiation strategy. B. Continued strikes effectively brought the public sector to a halt. C. Thatcher's policies need to be assessed on the basis of the effects that labour strike were having on the country. V. Almost immediately upon her becoming prime Minister, Thatcher entered into direct confrontation with the nation's unions, taking on the more powerful of them. A. Passed a series of Acts which limited union powers. B. Following limitation of union powers, Britain moved towards economic recovery. 1 Number of working days lost to strikes fell by 25 million. 2 Inflation was brought under control 3 Tax rates fell 4 Homeownership rose C. Macroeconomic figures validate Thatcher's union policies. VI. The question of whether or not positive macroeconomic performance indicators allow for an objective determination of whether there were any alternatives to these policies. A. Economic problem was largely linked to strikes. B. As a consequence of continued strike, once powerful industries were virtually destroyed. C. Strikes were at the heart of inflation D. Solution lay in limiting strikes. VII. The only realistic, workable and effective way the government could reduce strikes was by passing laws and policies which imposed a regulatory legal framework upon the very practice of striking. A. Wildcat strikes were outlawed B. Illegal to call strikes without ballots. C. Power to call strikes was severely limited. VIII. Conclusion: In the final analysis, the effectiveness of Thatcher's curtailment of union power must be affirmed. A. Strikes were remarkably reduced. B. Lost workdays were regained. C. Britain was on the road to economic recovery as a direct consequence of the limitations imposed upon union powers. Few political economic trends have been as controversial as has Thatcherism and hardly any British prime ministers possess as debatable a legacy as does Margaret Thatcher. Although ousted from power by he own Conservative Party close to two decades ago, Thatcherism and Thatcher's legacy remain as divisive a subject today as they were throughput the 1980s. As Howe (2006) observes, this is quite possibly because irrespective of her downfall and the rise of New Labour, on both political and economic fronts Britain is still living the consequences of Thatcherism. Among these consequences is the outcome of her confrontation with Britain's Labour Unions which effectively culminated in the demise of the latter and contributed to the downfall of the former (Howe, 2006). Whether or not the severe curtailment of the powers of the labour unions were a positive or negative development, just as whether or not Thatcher was singularly responsible for the stated, are questions worthy of exploration. In investigating these questions, the essay shall argue that while Thatcher's politico-economic policies vis--vis trade and labour unions were fundamental to the reduction of their powers, they were not singularly responsible for the stated curtailment. In addition, when analysed from within the parameters of the government's intentions and its economic vision, there appears to be no other viable option to the reduction of union powers. Whether or not Thatcher's political and economic policies were responsible for the reduction in the powers of Britain's unions is debatable. At the time of her election to power in1979 and despite all evidence to the contrary, technological developments had effectively weakened Britain's labour unions (The British Disease,'1993). Certainly, labour union strikes proliferated throughout the country and often brought sectors of the economy to a standstill but the unions were no longer as powerful as they one had been. As the Economist clarifies, by 1979, "coal, steel and rail, the base territories for the powerful manual workers' unions, no longer commanded the heights of the modern economy" (The British disease,' 1993, para.3). As a direct result of technological developments and innovations, the very sectors upon which the powers of the labour unions emanated had, themselves, weakened and no longer occupied places of primacy within the economy. These industries, which once commanded the highest percentages of labour union membership throughout the country, had declined in importance. Along with that decline, labour union membership fell by 16%, from 55% to 39% (The British Disease,' 1993). The implication here is that, on the eve of her election to power, not to mention at the time of direct confrontation, Margaret Thatcher was facing an already weakened British labour union. Despite the fact that the powers of the labour unions had been severely curtailed by economic circumstance, confrontation with Thatcher's Conservative government was inevitable. As reported in "The British disease," (1997) studies indicate that despite the increasing weakness of their base, British labour unions were remarkably disposed towards strikes. Leaning towards Marxist politico-economic ideology, between the 1960s to the early 1980s, the country's union leaders appeared to be working towards the destruction of the nation's capitalist economic structure. Indeed, during the winter of 1978-1979, public sector employees were on strike across the country, effectively bringing all of "docks, trucking, railways, schools, hospitals, airports, ambulances," to name but a few, to a complete standstill (The British disease,' 1997, para. 7). In an unprecedented display of power and in what some have later interpreted as a desperate attempt to bring down capitalism, British labour union leaders paralysed the public sector and instigated an economic recession (The British disease,' 1997). Margaret Thatcher was elected into government at this stage in British labour union history, making confrontation an absolute inevitability. Determination of whether or not Thatcher had any option for the resolution of the British labour union problem other than the curtailment of their power should be proceed from an acknowledgement of, and emphasis upon, the fact that union leaders were effectively engaged in the abuse and misuse of labour union power. Brazier (1991) maintains that despite the fact that the severe curtailment of the powers of the unions had some adverse economic effects on the middle classes and eventually factored into Thatcher's downfall, the government had no other viable option. That labour union leaders should be so readily inclined towards the declaration of nation-wide strikes as a negotiation strategy, was economically intolerable. Labour strikes, as Brazier (1991) clarifies, are generally held as a reaction to the breakdown of negotiations and should not be treated as a negotiation strategy, as the British labour union leaders had done. Indeed, their use in the aforementioned capacity lends to economic crisis and recession. This is precisely the situation which the British labour union leaders led Britain into: nation-wide paralysis of the public sector and recession. It is imperative that this be borne in mind while assessing Thatcher's policies. Almost immediately upon her becoming prime Minister, Thatcher entered into direct confrontation with the nation's unions, taking on the more powerful of them. She passed a series of laws through parliament which were specifically designed to curtail the power of the unions (Brazier, 1991). As Brazier (1991) reports, through the successful passage of ten Acts of parliament, union power was successfully curtailed, with the justification being that abuse of power was the primary cause of the economic inflation Britons and Britain were suffering from. As Robert Knight (1990) contends, statistical audits of Thatcherism, as in Thatcher's economic policies and macroeconomic reforms, reveals a direct linkage between unchecked union power and failing economic performance. In 1979, on the eve of her election, strikes cost Britain 29.5 million workdays. In 1989, only 4.1 million workdays were lost as a consequence of strikes. In addition to that, inflation was brought under control, tax rates fell by an entire quarter and home ownership rose by 18% (Knight, 1990). Britain's economy had regained its lost confidence and, indeed, macroeconomic figures indicted the success of Thatcher's economic policies. The question of whether or not the positive macroeconomic performance indicators outlined in the preceding paragraph were related to Thatcher's union policies allow for an objective determination of whether there were any alternatives to these policies. As earlier stated and, as affirmed by numerous economic scholars, the pre-Thatcher tendency for British union leaders to call strikes at the slightest provocation had proven incalculably detrimental to the national economy (Syrett, 1998). Britain's once powerful and high performing automobile industry had been virtually brought to its knees by constant strikes and the capacity of the public sector to service demands was seriously compromised. Indeed, labour and trade union strikes had become so commonplace in Great Britain that economists, the world over, began referring to labour strikes as the British Disease' (The British Disease,' 1997). Within the context of the aforementioned and especially given the immediate relationship between strikes and inflation, on the one hand and, strikes and the virtual collapse of once strong industries, on the other, the solution to Britain's economic problems seemed to lie with the labour and trade unions. More specifically, and as Syrett (1998) emphasises, the solution lay in the substantial reduction of the number of workdays lot per year to strikes. The loss of almost 30 million workdays in a single year was simply insupportable, not to mention economically unsustainable and detrimental. Hence, it was incumbent upon the government to confront, and solve, the problem of strikes. The only realistic, workable and effective way the government could reduce strikes was by passing laws and policies which imposed a regulatory legal framework upon the very practice of striking. This is precisely what the Thatcher government did though laws which effectively outlawed wildcat strikes and strikes without a ballot (Warren, 1992). Despite accusations of heavy-handedness resulting in the decline, even destruction, of Britain's unions, the facts speak for themselves. As per the facts, Britain's economic decline was revered, the British Disease was cured and, most importantly, within the space of a single decade, Britain regained over 25 million of the workdays which, sat the height of the disease, were lost to strikes (Warren, 1992). Given the very nature of the problem Thatcher was confronted with, there was literally no other option to the curtailment of union power. Union power, translating into unchecked strikes, had resulted in the nation's economic decline. The reverse of the said decline, therefore, lay in controlling the unions and regulating strikes. In the final analysis, the effectiveness of Thatcher's curtailment of union power must be affirmed. Whereas Britain had become the playground for wildcat strikes with rarely a week passing by without a strike being called, in the wake of Thatcher's policies, strikes were a rare occurrence. Indeed, approximately 25% of the country's union leaders reported that they had called off major strikes in the wake of the de-legitimisation of strikes called without ballots and wildcat strikes (Congdon, 2003). This affirms earlier statements to the effect that there were no other viable and effective options. Britain's economic problems were largely connected to he activities of its unions and their proclivity towards calling strikes and, thus, the only solution lay in curtailing their power and conditioning their legal right to call strikes. Bibliography Anon (1997) The British disease.' Economist, 327(7805), 57-58. Anon (1997) The British disease.' Canada and the World Backgrounder, 63(2), 22-25. Brazier, R. (1991) The downfall of Margaret Thatcher.' The Modern Law Review, 54(4), 471-491. Congdon, T. (2003) A rustproof iron lady.' Foreign Policy, 134, 92-93. Howe, D. (2006) We miss trade union power.' New Statesman, 34. Knight, R. (1990) After the fall: Testing a legacy.' U.S. News and World Report, 109(22). Syrett, K. (1998) Immunity, privilege, and right: Britain's trade unions and the language of labour law reform.' Journal of Law and of Society, 25(3), 388-406. Warren, S. (1992) The lady's not for turning.' Policy Review, 60, 62-69. Read More