Margaret Thatcher was a great lady, and a great political leader, reversing, by the strength of her character, a ruinous cycle of increasing state control of the British economy imposed in semi-collaboration with the British trade unions. That achievement required not just a change of policy, but a change in the way that the British people thought about the role of the state in organizing and directing economic activity. Mrs. Thatcher’s greatest achievement was not to change this or that policy, but to change the thinking of her countrymen. Leaders who can get others to change their thinking in fundamental ways rarely do so by being subtle; Mrs. Thatcher was not subtle.
Mrs. Thatcher had the great merit of admiring the writings of F. A. Hayek. How well she understood them, I am not in a position to say. But Hayek was a subtle thinker, and I think it is worth considering one instance — a somewhat notorious instance — in which Mrs. Thatcher failed to grasp Hayek’s subtlety. But just to give Mrs. Thatcher her due, it is also worth noting that, though Mrs. Thatcher admired Hayek enormously, she was not at all slavish in her admiration. And so it is only fair to recall that Mrs. Thatcher properly administered a stinging rebuke to Hayek, when he once dared to suggest to her that she could learn from General Pinochet about how to implement pro-market economic reforms.
However, I am sure you will agree that, in Britain with our democratic institutions and the need for a high degree of consent, some of the measures adopted in Chile are quite unacceptable. Our reform must be in line with our traditions and our Constitution. At times the process may seem painfully slow. But I am certain we shall achieve our reforms in our own way and in our own time. Then they will endure.
But Mrs. Thatcher did made the egregious mistake of asserting “there is no such thing as society, just individuals.” Here are two quotations in which the assertion was made.
And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then, also to look after our neighbour. People have got the entitlements too much in mind, without the obligations, because there is no such thing as an entitlement unless someone has first met an obligation.
And,
There is no such thing as society. There is living tapestry of men and women and people and the beauty of that tapestry and the quality of our lives will depend upon how much each of us is prepared to take responsibility for ourselves and each of us prepared to turn round and help by our own efforts those who are unfortunate.
In making that assertion, Mrs. Thatcher may have been inspired by Hayek, who wrote at length about the meaninglessness of the concept of “social justice.” But Hayek’s point was not that “social justice” is meaningless, because there is no such thing as society, but that justice, like democracy, is a concept that has no meaning except as it relates to society, so that adding “social” as a modifier to “justice” or to “democracy” can hardly impart any additional meaning to the concept it is supposed to modify. But the subtlety of Hayek’s reasoning was evidently beyond Mrs. Thatcher’s grasp.
Here’s a wonderful example of Hayek talking about society.
In the last resort we find ourselves constrained to repudiate the ideal of the social concept because it has become the ideal of those who, on principle, deny the existence of a true society and whose longing is for the artificially constructed and the rationally controlled. In this context, it seems to me that a great deal of what today professes to be social is, in the deeper and truer sense of the word, thoroughly and completely anti-social.
Nevertheless, while Mrs. Thatcher undoubtedly made her share of mistakes, on some really important decisions, decisions that really counted for the future of her country, she got things basically right.
Uneasy Money 
David, interesting that Hayek ‘appealed’ to a totalitarian such as Pinochet!
Your last Hayek quote is also interesting in as much as in Brazil, when the military dictatorship was brought to an end in 1985, the major ‘political concern’ of the new democracy was with word (concept) ‘social’. Of the 24 political parties in existence, 9 have the word ‘social’ in their name (being called the “Workers Party” implies being geared to ‘social’ concerns, the same with having “Comunist” in the party´s name), so the effective number of ‘Social’ parties is bigger. The name of the National Bank for Economic Development was amended to ‘National Bank for Economic and Social Development’. For a long time the government´s motto was “All for the social”. Now it´s “Brazil, a country of all”. And Hayek was right. about the “longing being for the artificially constructed and the rationally controlled.”
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@Marcus Nunes was Pinochet a ‘totalitarian’ or merely an authoritarian?
As for Thatcher’s women’s own interview, It has to be one of the most misinterpreted things that a prime minister has ever said (sized on by the left of course as evidence that selfishness is at the core of conservative & liberal thought).
“I think we have gone through a period when too many children and people have been given to understand “I have a problem, it is the Government’s job to cope with it!” or “I have a problem, I will go and get a grant to cope with it!” “I am homeless, the Government must house me!” and so they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no government can do anything except through people and people look to themselves first”
“I think, one of the tragedies in which many of the benefits we give, which were meant to reassure people that if they were sick or ill there was a safety net and there was help, that many of the benefits which were meant to help people who were unfortunate—“It is all right. We joined together and we have these insurance schemes to look after it”. That was the objective, but somehow there are some people who have been manipulating the system and so some of those help and benefits that were meant to say to people: “All right, if you cannot get a job, you shall have a basic standard of living!” but when people come and say: “But what is the point of working? I can get as much on the dole!” You say: “Look” It is not from the dole. It is your neighbour who is supplying it and if you can earn your own living then really you have a duty to do it and you will feel very much better!”
Reading the interview the context is clear. She is is insisting that we not loose sight of the fact that society IS your neighbours. That you can’t pass off your responsibilities on an abstraction. She is not denying that society exists, she is denying that it is the same thing as the government/state.
Also
If I remember correctly she is also not saying anything that Adam Smith was not saying. For Smith ‘self love’ is the virtue of not being an unnecessary burden on others, & ‘selfishness’ the vice of kings & the “masters of mankind” is self interest at the expense of others.
The above quotes can be interpreted in Smithian terms as advocating self love & criticising selfishness.
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David, Nice post.
I use to think that there is a confusion in liberal world between individual as the main objective of social order and individual as the unique agent of this order.
I agree with the first: individual is the supreme moral objective. But that doesn’t mind that social order doesn’t produce its own unintended consequences that requires some institucional order and a Government. Individualism as supreme value doesn’t mind individualism as methodology.
http://www.miguelnavascues.com/2013/04/individualismo-como-fin-y-como-metodo.html
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It’s not every day I get to hear an argument for balance between individuals and society, with such clarity and historical example. Thanks for a most enjoyable post.
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@Nicholas P. Pinochet was certainly not ‘merely’ something. He was a full blown totalitarian with Chile´s Secret Police a ‘killing machine’, the favorite instruments of totalitarians in the manner of Stalin and his NKVD chief Beriya.
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@Marcus Nunes
“totalitarian such as Pinochet!”
“Liberalism and democracy, although compatible,are not the same.
The first is concerned with the extent of governmental power, the second with who holds this power. The difference is best seen if we consider their opposites: the opposite of liberalism is totalitarianism, while the opposite of democracy is authoritarianism. In consequence, it is at least possible in principle that a democratic government may be totalitarian and that an authoritarian government may act on liberal principles. ”
The Principles of a Liberal Social Order, Hayek 1966
Having a killing machine is not what makes you totalitarian. As implied in the name ‘totalitarian’ regimes have total control over all aspects of their subjects lives. The authoritarian regime denies political rights to its subjects. As far as I am aware Pinochet did not interfere violently or otherwise with people’s choices as long as they were not political. This makes Pinochet’s regime quintessentially authoritarian rather then totalitarian.
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Sorry David. She didn’t say “unacceptable”. She said “quite unacceptable” which is way softer. And not on principle: only because then present institutions prevented it. Had british democracy not stood in the way, she would have gone the whole Pinochet way.
And the distinction between “authoritarian”, who let you choose between apple and orange juice and “totalitarian” who gives only grape juice is merely the smokescreen for “My CIA-suppported mass murderer is better than your KGB-supported one.”
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I am not sure whether Thatcher’s statement about society and self-reliance is significantly different, whichever way you excerpt it. I would bring to mind, with regard to the self-reliance vs. gov’t assistance, that, in line with Gunnar Myrdal’s book “Monetary Equilibrium”, which is roughly contemporaneous with Keynes’ General Theory, Professor Myrdal pointed out that the level and form of monetary eqilibrium would take different meaning in different institutional environments. The relative efficiency of Ms. Thatcher may have sped up growth (although Professor Krugman has pointed out how problematic that would be to demonstrate), but it may be nothing more than trading off a modest amount of extra growth (probably not) for a less supportive welfare state.
Even if a more “liberal” institutional arrangement, as Ms. Thatcher advocated in her life may be more efficient, by some definition of efficiency, does not mean it would be socially optimal, especially if the optimal role of gov’t is not adequately taken into account.
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Marcus, I am not going to say whether Pinochet was or was not a totalitarian. He certainly was a bad guy, and Hayek had no business singing his praises, but I am sure that Hayek did not think of him as a totalitarian. To what extent Hayek allowed himself to be misled about the nature of the Pinochet regime or knew what its true nature was and supported it anyway is a question that deserves further study. I hope that he was misled and was not really aware of the crimes committed by Pinochet.
Nicholas, Thanks for suggesting a plausible alternative reading of what Thatcher may have meant to say. Still the saying “there is no such thing as society” is patently in error even if she only meant to emphasize that the burden for supporting people not earning their own way is necessarily borne by the individuals whose taxes finance that support.
Luis, Thank you. You are right to distinguish between individualism as a moral principle and individualism as a methodological principle. The two often go together but it is not logically necessary that they do so.
Becky, Thank you for your comment. I greatly appreciate it.
Jacques, Perhaps your ear for the nuances of English usage is more acute than mine, but I don’t detect a big difference between “quite unacceptable” and “unacceptable. I am prepared to stipulate for argument’s sake that it was the British democratic tradition that kept Thatcher from following in Pinochet’s example. Are you suggesting that the British democratic tradition is some sort of triviality? That was exactly Thatcher’s point. How could Hayek dare treat that tradition as if it were a triviality?
Julian, I don’t think necessarily support Thatcher’s welfare policies, about which I know very little. What is important is that Thatcher reversed a tide toward increasing state control over the economy, which was a long-running trend in England from the second world war onward, with modest interruptions when the Conservatives came to power in the 1950s and early 1960s and accelerated by the Conservatives in the disastrous Heath government in the early 1970s which led to the equally disastrous Labour government that succeeded Heath. Thatcher established once and for all that inflation was a monetary phenomenon that had to be controlled by monetary policy not wage and price controls. That was her great achievement; everything else was secondary.
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That’s the way I see it as well. She lead a huge movement into privatizing state owned businesses. Which is the way to go if you want businesses to do better. The less state owned we have the better it is.
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David: at least in my mixture of middle-class english taught in the ’60’s Québec francophone schools plus studies in early ’70’s Britain plus american technical vocabulary, “quite ” is amodifier meaning not that much,” I never heard anyone saying “Concentration camps are quite unacceptable” unless followed by something like “except for insert your favorite villain”.
And , not willing to overinterpret without the tone of voice etc, in her letter to Hayek, it doesn’t sound like “But thank Heavens, the strength of our democracy would prevent such an horrible fate” but more “But unfortunately, the strenght of our democratic system prevent such a desirable fate.”
Maybe her admiration for Gorbatchev was that he was the right mix: suitably authoritarian without having the bad taste of killing too many people and favorable enough to large business that she could live with.” A harsher Hong Kong or Singapore if you wish.
But I may be wrong.
Though I am wary of any funeral where Henry Kissinger is a guest of honor…
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Tas, More important than denationalization was reducing interference with the price system and increasing competiton. Unfortunately many of her denationalizations simply transformed public monopolies into private ones.
Jacques, I quote from the Shorter Oxford English Dictionary
“quite
A adverb 1. Completely, fully, entirely, to the utmost extent or degree: in the fullest sense. Also exceptionally. . . .
2. Actually, truly, absolutely; plainly, definitively.”
If you check the internet definitions of “quite,” you will find essentially the same. There is something about “quite” that makes it sound a bit softer than, say, “absolutely,” but that is really a very fine nuance, that our English friends might be more sensitive to than we North Americans. Nevertheless, I think your premise is quite untenable.
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