Margaret Thatcher, Lee Myung bak & Me

By Richard Collie

As a child born in the United Kingdom in the early 1980s, my life has been shaped by the legacy of the U.Ks fist ever female Prime Minister, Margaret Thatcher, the woman more commonly known as ‘The Iron Lady.’

I use the word ‘legacy’ because what is even more significant than the intense misery she inflicted on the British working class during the twelve years she was in power, is the social consequences of her policies we are now witnessing more than eighteen years later.

Thatcherism

So what was the nature of ‘Thatcherism’? In policy terms, it was the dismantling of the state apparatus for managing most of what existed as the public sector. In broader terms, it was an acceptance that in the U.K we would never have a government that was capable of providing public services as basic as, say, picking up the garbage or providing clean drinking water in one of the most consistently rainy countries on the planet.

It was a government accepting defeat, a government that rejected the basic principles of why a government should exist in the first place: to provide infrastructure and the best possible public services to it’s citizens, regardless of class, colour or creed.

The solution? Well it was so simple. That wonderful and magical savior of mankind: The Free Market. Freeing up public sector industries from the ‘shackles’ of state ownership would of course guarantee not only more effective running of public services, but also fairer working conditions for the millions employed within them.

Of course it was inconceivable that any public industry could be run with the needs of the people as their primary motivation. No, only profit could provide the necessary motivation to elevate Britain from the crisis it found itself at that time, when trade unions held all the cards and Britain was brought to a standstill as hundreds of thousands of state employees went on strike during the ‘winter of discontent’ of 1978-79.

And it is important to remember that it was a crisis that brought about the reforms made under Thatcher. Many people had genuinely lost faith in the government’s ability to manage public services. At this time, these people needed a government who could restore their faith and work hard to ensure creative solutions to the trade union problems. Instead, they got Thatcher. And so it was that privatisation was extended to water, gas, coal, buses, trains, subway, banks, waste collection amongst other industries.

It was the extent of the crisis in the U.K that makes it so difficult to understand why South Korea is about to embark on the same path under its own, equally loathsome, Margaret Thatcher figure: Lee Myung-bak.

The reference point: Is Lee Myung-bak Korea’s ‘Iron man’?

Anyone who visits or lives in South Korea will quickly notice that it has a remarkably well-oiled and smoothly operating infrastructure. Public transportation is cheap, clean and efficient. Healthcare is subsidized by the state, widespread and affordable. Utilities are delivered and serviced with few hitches, again at a price that makes the high quality service available to all walks of society.

That South Korea has succeeded in providing these services where the United Kingdom has failed is an achievement that Korean people have every right to feel proud of. And it makes it an even bigger mystery that they are prepared to sacrifice all this under the planned privatisation reforms of Lee Myeong-bak.

Firstly, it is important to note that there are no indications that Korea’s attempt at privatisation would be quite as disastrous as the UK’s, where private companies proved so inept that they couldn’t even keep the trains on the tracks, where the water pipe network was so poorly maintained that there have been numerous water restrictions imposed in a country famed for its rainy winters, springs, summers and autmumns.

Privatised Korean education: A warning signal

However, there are some ominous signals at what privatisation may have in store for Korea when you look at the heavily privatised Korean education industry. A mixture of poor standards within public schools and an incredibly competitive job market has led to a supply and demand situation whereby students end up receiving most of their education outside of the public sector in privately run institutes. As a result, the private education sector has become grotesquely over inflated, contributing to declining standards within public elementary, middle and high schools and making it difficult for those without the financial means to gain access to a quality education.

Education is something of an anomaly in Korea, a privatised island in the midst of state run or subsidised public services. Admittedly, it boasts one of the best all-round literacy records in the world, but the unregulated private education industry frequently fails to provide well-qualified teachers and cuts corners on resources to maximize profits, at the expense of quality of education.

The true nature of privatisation

Of course, It should come as no surprise; it is within the nature of any business to get maximum return for minimal investment. OK for a pair of shoes manufactured in China perhaps, but is this kind of mentality that should exist in the education industry?

And with this in mind, why is Lee Myung-bak seeking to transfer this mentality to other areas of Korean society, be it public transportation, healthcare, water, gas or banks?

In the UK, a one way ticket on the decaying, claustrophobic and dirty London Underground costs roughly eight times more than a ticket on the Seoul Metro. In a rail system that in recent years has seen several high profile derailments at the cost of hundreds of casualties and many deaths, a cross country train ticket can cost as much as 100GBP, again roughly four of five times the price of the more frequent services that span Korea. Monopolies are commonplace across the UK transport system.

In the nine years that followed the privatisation of water services and sanitation, tariffs rose by 43%, while operating profits for the various companies that cashed in on the reforms more than doubled to 142%. Ever increasing profit margins are made possible by every decreasing investment and maintenance costs, with thousands of litres of clean drinking water leaking out of broken pipes annually.

And even more seriously, to place things in the context of the current financial crisis, the widespread deregulation of the banking industry under Thatcher in the 1980s laid the foundation for wild speculation and the boom and bust economy that no government since, either Labour or Conservative, has made any effort to rectify. The recently nationalised Nothern Rock was a good example of the current Labour government having to go back to its pre-Thatcher socialist principles of nationalised industry to bail out the failures of Thatcher’s capitalist reforms. Meanwhile the Pound Sterling continues to plummet in the stock market, while ‘New Labour’ Prime Ministers Tony Blair and Gordon Brown, who idolised Thatcher’s economic policies, are left scratching their heads as Great Britain heads into recession.

It is almost inconceivable that, taking the current financial climate into account, Korea could be about to embark on more, not less, deregulation within the banking industry.

The social impact of privatisation

The UK is just one of many ugly examples of how privatisation across the globe has consistently destroyed public services while simultaneously raising prices, wherever it has been implemented.

And there is of course the other ‘legacy’ of privatisation, the indirect, yet very clear, impact it has on people’s social consciousness. It is often considered that Margaret Thatcher ‘ripped the heart out of Britain.’ Perhaps now would be a good time to consider how this happened.

Firstly, it is important to remember that although late 1970s Great Britain was still deeply class conscious, like South Korea, there was also a deep communal bond within most neighborhoods, especially in working class, inner city areas. The post World War II generation had been galvanised by their combined efforts to keep the Nazis at bay and had witnessed first-hand how a nation can come together and run industry more efficiently for the overall good of the population. The product of this was an extension of the public sector after the war, including the introduction of the National Health Service, a beacon of prosperity for all those who believe in universal healthcare.

Thankfully the National Health Service remains and, for the most part, is still intact. But in contrast to Korea, the NHS is a lone island in a piranha –infested sea of privatised industry, where the carnivorous fish of the ‘free market’ nibble away, slowly privatising it in chunks. Care for the elderly and dentistry have recently been lost in this way.

The NHS harks back to a day when Great Britain was still capable of leading the way and producing something it could be proud of. The legacy of Thatcher is a country filled with empty-headed, debt ridden consumers, a country more concerned with their Sky Digital subscription than their voter application form. Opening up all industry to the free market and ‘healthy competition’ is, in effect, turning a country against itself, weakening the social bonds that exists and creating a more self-centered, self-interest driven society.

Under Thatcher, what were once ‘homes’ became ‘properties’ or ‘investments.’ Community housing was sold off either to individuals or, more often, to large real estate companies. People were no longer looking to assimilate into or help build the communities they lived in, rather they were seeking to climb the property ladder or move to a more ‘desirable area’, meaning bigger houses with bigger gardens and bigger cars in the garage.

Most people had to borrow money to fuel this mad pursuit of accumulation and, under Thatcher, banks made it much easier to take out loans. Consequently, Britain now has one of the highest level of consumer debts in the world, with recent figures suggesting the total figure at over 1 trillion GBP. The British household debt-to-income ratio is 1.62, far outstripping its more frugal European neighbours who perhaps wisely didn’t adopt the same kind of unlimited deregulation nor make credit so easily available. The German figure is 1.09, yet the UK even comfortably outstrips America at 1.42.

The social legacy of Thatcher and privatisation

These facts are relevant in understanding a society where people, increasingly desperate in the current financial climate, put their own needs far above the people they live and work beside.  It is important in understanding a society where crime rates increase year after year, where community culture has been replaced by a culture of fear in many suburbs, where people scurry home after work and close the door firmly behind them.

I mention this because, for all the consumerism that is rife in Seoul, Korea has maintained a strong sense of society. Indeed, its immense economic growth in recent decades is a testimony to the Korean people’s willingness to work together for a common goal. The public services it has developed in that time are, as previously mentioned, deeply impressive.

Moreover, for someone like me who comes from a country where most people who occupy public space after sunset are usually seen as either prostitutes, drug dealers or juvenile delinquents, it is refreshing to see a country where there is tangible sense of community, where parents feel comfortable letting their children play on the streets late into the evening, where you can feel comfortable leaving your bag while you visit the restroom for five minutes, safe in the knowledge that the streets are not teaming with petty thieves.

So as Lee Myung-bak’s agenda of widespread privatisation lays waiting in the wings, Koreans must be aware that the social cost of such reforms can be much greater than merely poorer, more expensive public services and a weaker economy. As Great Britain has shown, the social wounds can be much deeper and can take generations to heal.

Korea: A call to the people!

So the obligation is now with the Korean citizens to regain the spirit of resistance that characterised the previous generation, a generation that fought bravely to gain the democratic freedoms the young people of today are now enjoying. During recent ‘candlelight protests’, hundreds of thousands flocked to the streets of downtown Seoul to protest against the government’s deeply unpopular attempt to lift the restrictions on what was considered to be unsafe American beef. This should be an insight into the kind of power the public can wield once the touch paper has been lit and the people rally behind a cause.

The only real challenge now is to make sure the people are truly aware of the social cost of Lee Myung-bak’s agenda. They should listen to the testimony of a person, though from thousands of miles away, who has seen this path walked before and lived with the ugly consequences.