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By PAUL JOHNSON
Margaret Thatcher had more impact on the world than any woman ruler since Catherine the Great of Russia. Not only did she turn around—decisively—the British economy in the 1980s, she also saw her methods copied in more than 50 countries. "Thatcherism" was the most popular and successful way of running a country in the last quarter of the 20th century and into the 21st.
Her origins were humble. Born Oct. 13, 1925, she was the daughter of a grocer in the Lincolnshire town of Grantham. Alfred Roberts was no ordinary shopkeeper. He was prominent in local government and a man of decided economic and political views. Thatcher later claimed her views had been shaped by gurus like Karl Popper and Friedrich Hayek, but these were clearly the icing on a cake baked in her childhood by Councillor Roberts. This was a blend of Adam Smith and the Ten Commandments, the three most important elements being hard work, telling the truth, and paying bills on time.
Hard work took Miss Roberts, via a series of scholarships, to Grantham Girls' School, Somerville College, Oxford, and two degrees, in chemistry and law. She practiced in both professions, first as a research chemist, then as a barrister from 1954. By temperament she was always a scholarship girl, always avid to learn, and even when prime minister still carried in her capacious handbag a notebook in which she wrote down anything you told her that she thought memorable.
At the same time, she was intensely feminine, loved buying and wearing smart clothes, had the best head of hair in British politics and spent a fortune keeping it well dressed. At Oxford, punting on the Isis and Cherwell rivers, she could be frivolous and flirtatious, and all her life she tended to prefer handsome men to plain ones. Her husband, Denis Thatcher, whom she married in 1951 and by whom she had a son and daughter, was not exactly dashing but he was rich (oil industry), a capable businessman, a rock on which she could always lean in bad times, and a source of funny 19th-hole sayings.
Denis was amenable (or resigned) to her pursuing a political career, and in 1959 she was elected MP for Finchley, a London suburb. She was exceptionally lucky to secure this rock-solid Tory seat, so conveniently placed near Westminster and her home. She held the seat without trouble until her retirement 33 years later. Indeed, Thatcher was always accounted a lucky politician. Prime Minister Harold Macmillan soon (in 1961) gave her a junior office at Pensions, and when the Conservatives returned to power in 1970, she was fortunate to be allotted to the one seat in the cabinet reserved for a woman, secretary of state for education.
There she kept her nose clean and was lucky not to be involved in the financial and economic wreckage of the disastrous Ted Heath government. The 1970s marked the climax of Britain's postwar decline, in which "the English disease"—overweening trade-union power—was undermining the economy by strikes and inflationary wage settlements. The Boilermakers Union had already smashed the shipbuilding industry. The Amalgamated Engineers Union was crushing what was left of the car industry. The print unions were imposing growing censorship on the press. Not least, the miners union, under the Stalinist Arthur Scargill, had invented new picketing strategies that enabled them to paralyze the country wherever they chose.
Attempts at reform had led to the overthrow of the Harold Wilson Labour government in 1970, and an anti-union bill put through by Heath led to the destruction of his majority in 1974 and its replacement by another weak Wilson government that tipped the balance of power still further in the direction of the unions. The general view was that Britain was "ungovernable."
Among Tory backbenchers there was a growing feeling that Heath must go. Thatcher was one of his critics, and she encouraged the leader of her wing of the party, Keith Joseph, to stand against him. However, at the last moment Joseph's nerve failed him and he refused to run. It was in these circumstances that Thatcher, who had never seen herself as a leader, let alone prime minister, put herself forward. As a matter of courtesy, she went to Heath's office to tell him that she was putting up for his job. He did not even look up from his desk, where he was writing, merely saying: "You'll lose, you know"—a characteristic combination of bad manners and bad judgment. In fact she won handsomely, thereby beginning one of the great romantic adventures of modern British politics.
The date was 1975, and four more terrible years were to pass before Thatcher had the opportunity to achieve power and come to Britain's rescue. In the end, it was the unions themselves who put her into office by smashing up the James Callaghan Labour government in the winter of 1978-79—the so-called Winter of Discontent—enabling the Tories to win the election the following May with a comfortable majority.
Thatcher's long ministry of nearly a dozen years is often mistakenly described as ideological in tone. In fact Thatcherism was (and is) essentially pragmatic and empirical. She tackled the unions not by producing, like Heath, a single comprehensive statute but by a series of measures, each dealing with a particular abuse, such as aggressive picketing. At the same time she, and the police, prepared for trouble by a number of ingenious administrative changes allowing the country's different police forces to concentrate large and mobile columns wherever needed. Then she calmly waited, relying on the stupidity of the union leaders to fall into the trap, which they duly did.
She fought and won two pitched battles with the two strongest unions, the miners and the printers. In both cases, victory came at the cost of weeks of fighting and some loss of life. After the hard men had been vanquished, the other unions surrendered, and the new legislation was meekly accepted, no attempt being made to repeal or change it when Labour eventually returned to power. Britain was transformed from the most strike-ridden country in Europe to a place where industrial action is a rarity. The effect on the freedom of managers to run their businesses and introduce innovations was almost miraculous and has continued.
Thatcher reinforced this essential improvement by a revolutionary simplification of the tax system, reducing a score or more "bands" to two and lowering the top rates from 83% (earned income) and 98% (unearned) to the single band of 40%.
She also reduced Britain's huge and loss-making state-owned industries, nearly a third of the economy, to less than one-tenth, by her new policy of privatization—inviting the public to buy from the state industries, such as coal, steel, utilities and transport by bargain share offers. Hence loss-makers, funded from taxes, became themselves profit-making and so massive tax contributors.
This transformation was soon imitated all over the world. More important than all these specific changes, however, was the feeling Thatcher engendered that Britain was again a country where enterprise was welcomed and rewarded, where businesses small and large had the benign blessing of government, and where investors would make money.
As a result Britain was soon absorbing more than 50% of all inward investment in Europe, the British economy rose from the sixth to the fourth largest in the world, and its production per capita, having been half that of Germany's in the 1970s, became, by the early years of the 21st century, one-third higher.
The kind of services that Thatcher rendered Britain in peace were of a magnitude equal to Winston Churchill's in war. She also gave indications that she might make a notable wartime leader, too. When she first took over, her knowledge of foreign affairs was negligible. Equally, foreigners did not at first appreciate that a new and stronger hand was now in control in London. There were exceptions. Ronald Reagan, right from the start, liked what he heard of her. He indicated that he regarded her as a fellow spirit, even while still running for president, with rhetoric that was consonant with her activities.
Once Reagan was installed in the White House, the pair immediately reinvigorated the "special relationship." It was just as well. Some foreigners did not appreciate the force of what the Kremlin was beginning to call the Iron Lady. In 1982, the military dictatorship in Argentina, misled by the British Foreign Offices's apathetic responses to threats, took the hazardous step of invading and occupying the British Falkland Islands. This unprovoked act of aggression caught Thatcher unprepared, and for 36 hours she was nonplused and uncertain: The military and logistical objections to launching a combined-forces counterattack from 8,000 miles away were formidable.
But reassured by her service chiefs that, given resolution, the thing could be done, she made up her mind: It would be done, and thereafter her will to victory and her disregard of losses and risks never wavered. She was also assured by her friend Reagan that, short of sending forces, America would do all in its considerable power to help—a promise kept. Thus began one of the most notable campaigns in modern military and moral history, brought to a splendid conclusion by the unconditional surrender of all the Argentine forces on the islands, followed shortly by the collapse of the military dictatorship in Buenos Aires.
This spectacular success, combined with Thatcher's revival of the U.K. economy, enabled her to win a resounding electoral victory in 1983, followed by a third term in 1987. Thatcher never had any real difficulty in persuading the British electorate to back her, and it is likely that, given the chance, she would have won her fourth election in a row.
But it was a different matter with the Conservative Party, not for nothing once categorized by one of its leaders as the "stupid party." Some prominent Tories were never reconciled to her leadership. They included in particular the supporters of European federation, to which she was implacably opposed, their numbers swollen by grandees who had held high office under her but whom she had dumped without ceremony as ministerial failures. It was, too, a melancholy fact that she had become more imperious during her years of triumph and that power had corrupted her judgment.
This was made clear when she embarked on a fundamental reform of local-government finance. The reform itself was sensible, even noble, but its presentation was lamentable and its numerous opponents won the propaganda battle hands down. In the midst of this disaster, her Europhile opponents within her party devised a plot in 1990 to overthrow her by putting up one of their number (sacked from the cabinet for inefficiency) in the annual leadership election. Thatcher failed to win outright and was persuaded by friends to stand down. Thus ended one of the most remarkable careers in British political history.
Thatcher's strongest characteristic was her courage, both physical and moral. She displayed this again and again, notably when the IRA tried to murder her during the Tory Party Conference in 1984, and nearly succeeded, blowing up her hotel in the middle of the night. She insisted on opening the next morning's session right on time and in grand style. Immediately after courage came industry. She must have been the hardest-working prime minister in history, often working a 16-hour day and sitting up all night to write a speech. Her much-tried husband once complained, "You're not writing the Bible, you know."
She was not a feminist, despising the genre as "fashionable rot," though she once made a feminist remark. At a dreary public dinner of 500 male economists, having had to listen to nine speeches before being called herself, she began, with understandable irritation: "As the 10th speaker, and the only woman, I wish to say this: the cock may crow but it's the hen who lays the eggs."
Her political success once again demonstrates the importance of holding two or three simple ideas with fervor and tenacity, a virtue she shared with Ronald Reagan. One of these ideas was that the "evil empire" of communism could be and would be destroyed, and together with Reagan and Pope John Paul II she must be given the credit for doing it.
Among the British public she aroused fervent admiration and intense dislike in almost equal proportions, but in the world beyond she was recognized for what she was: a great, creative stateswoman who left the world a better and more prosperous place, and whose influence will reverberate well into the 21st century.
Mr. Johnson is a historian.
A version of this article appeared April 9, 2013, on page A15 in the U.S. edition of The Wall Street Journal, with the headline: The World-Changing Margaret Thatcher.