Thatcher's legacy continues to teach us when we go wrong
Over the past few days, we have read and listened to many perspectives relating to the life and legacy of Margaret Thatcher, who was in every sense a politically dominant figure of the 1980s. We have heard about her pioneering role as Britain's first female prime minister, and also about her unique character and style.
So then, what does all this mean in the context of Thailand today? The death of a political leader of such rare force and influence does perhaps give us, regardless of our particular perception of her, a rare opportunity to reflect on the direction Thailand has been taking. Perhaps out of this, we can more properly question some of our long-held assumptions about the policies we have embraced as a nation, and therefore, make some much-needed changes.One of the principal policy approaches for which Thatcher is most famed, or notorious, is the way in which she forcefully decoupled the British economy from a damaging over-reliance on the post-Second World War consensus relating to state intervention and a nation's economy.
During the 1980s, her approach was considered divisive, acting as it did to further polarise a nation. Even today, senior members of her own political party continue to be at odds over her ultimate methodology and approach. Nevertheless, it is now more than two decades later, and Britain has corrected its image as "the sick man of Europe", despite the significant impact to its economy in the wake of the global financial crisis of 2007-2008.
The enduring questions relating to the balance between the free market and the state, so often cause us to reconsider this aspect of Thatcher's formidable legacy. This is precisely because so many of the major, and still controversial, aspects of Thatcherite economics have since been emulated and implemented throughout the world.
Indeed, alongside a programme of privatisation, over the past 10 years or more, successive Thai governments have implemented a number of somewhat populist, but much-needed policies through the state mechanism. This has certainly contributed toward raising the level of public spending overall, and although this has so far been accomplished without raising Thailand's public debt to unsustainable levels, the trend over the past few years has been on the rise.
According to The Economist, Thailand's public debt as a percentage of its GDP was 45.8 per cent in 2012, and is projected to rise to 51.7 per cent by 2014. This is a significant increase over a two-year period, especially when we consider that further policies are being considered, including the contentious Bt2-trillion infrastructure development project, which is currently being scrutinised in Parliament. Accordingly, it seems rather likely that public debt is only set to further increase over the short and medium terms, and this is also at a time when Thailand must still consider the uncertainty that surrounds the outlook for the world economy.
For several decades, Thailand's primary national developmental framework has been the National Economic and Social Development Plan, and since 1997 there has been a move away from a growth-oriented approach toward what is now described as a "people-centred development" approach. This has been sold to the Thai public as something that will promote a fairer distribution of income across the demographics, and in addition will act to enhance political participation and dialogue between citizens and the state.
But as this has evidently not delivered on its promise, many now argue that its primary effect has been to contribute toward a significant increase in the sense of dependency many Thais now exhibit with regard to the state. This trend is particularly apparent when we observe the increasing demands being made for public goods and services such as healthcare and education, and also in terms of how individuals now so often aspire to gain long-term employment with the state.
But for Thatcher, such a trend toward the Keynesian model had proven problematic. As she recalled later, after her term in office: "There was no point in setting targets for 'full' employment. Instead, government should create the right framework of sound money, low taxes, light regulation and flexible markets (including labour markets) to allow prosperity and employment to grow."
From the perspective of policy-makers, understanding how to maintain a proper balance between the roles of the free market and the state is already a significant challenge. This issue involves much more than the question of government policies and frameworks, the role of institutions, or the move toward privatisation and deregulation. It is also about the fundamental relationship between citizens and the state, and this relates to the fluctuating perceptions of people within a society.
The mentality of simply wanting to work within the public sector, without particular regard for the eventual repercussions of such a widespread attitude, remains relatively pervasive in Thailand today. Also, as a consequence, this sector of the employment market continues to become increasingly competitive. Those who have newly graduated typically carry the perception that a public-sector job is secure, and therefore their focus is primarily on securing such a position, with relatively little regard for their role thereafter.
Moreover, they are frequently encouraged in this outlook by elders within the family, because not only their children, but also their parents will gain state benefits as a result. Indeed, we cannot avoid the implication in all of this that many Thais are now sceptical that the market mechanism can truly work for them.
Although most of us now recognise that there is a role for the state in regulating market failure, attempts to flee from the private sector en masse may only further undermine a desire for balance within the system overall, and this is a challenge that the current government now faces.
As we now stop to reflect on Thatcher's legacy, perhaps we can recognise this one key aspect: that despite her apparent divisiveness, and the heated disagreements over her more notorious policies during and since her time in office, many British people have finally been persuaded that there is one thing she certainly did achieve. This was to transform the dynamics in the relationship between the individual, the free-market and the state. Such a correction, in and of itself, may have been enough to assure her legacy, despite the fact that many of her individual policies were considered by many to be lacking in compassion when it came to their effects on ordinary lives.
For Thailand, this is a time to reopen the debate and re-examine the state's major policy instruments, in order to encourage people to enquire into these questions more fully, with the hope that we too may act more effectively to make such a transformation.
