Speeches, etc.

Margaret Thatcher

Speech to British American Chamber of Commerce ("In this life we get nothing save by effort")

Document type: Speeches, interviews, etc.
Venue: Ballroom, Hotel Pierre, New York
Source: Thatcher Archive: CCOPR 873/77
Editorial comments: Embargoed until 1700 GMT, 1200 local time. Applause interrupted the speech on three occasions (Guardian, 9 September 1977). MT took questions from the floor after the speech; her "vigorous responses" also received applause, although she sidestepped one question as to whether she would raise the issue of landing rights for Concorde when she met the President the following week (Financial Times, 9 September 1977).
Importance ranking: Major
Word count: 518
Themes: Conservatism, Economic policy - theory and process, Energy, Public spending & borrowing, Foreign policy (USA)

I believe we are entering a new phase in British politics. The post-war period has come to an end, the post-Socialist period is about to begin.

Experience, commonsense and perhaps the IMF are leading us to a period of greater financial discipline. While some advisers recommend “reflation” , I would prefer the James CallaghanPrime Minister's analysis given in September last year

“… We used to think that you could just spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you, in all candour, that this option no longer exists, and that insofar as it ever did exist, it only worked by injecting bigger doses of inflation into the economy followed by higher levels of unemployment as the next step …”

This is a much better interpretation of modern economic problems than that which is urged on us in Keynes 's name, though we have good reasons for arguing that Keynes would not have advised “reflation” in today's circumstances, particularly in the light of the experience of the postwar period.

I believe that the fallacies which shaped postwar thinking are being abandoned in favour of a more realistic approach. Let me detail some of these. [end p1]

Fallacy One is that prosperity comes from government bureaucracy and controls.

The reality is that resources are scarce and can be increased only by incentives for effort, investment and efficiency.

Fallacy Two is that people prefer government-provided services to keeping more of their own wages for spending as they choose.

The reality is that the higher taxation necessary to finance public expenditure is resented by wage-earners who demand heavy wage increases to offset rising levels of real taxation. Politicians like spending other people's money—just as though it were … other people's money.

Fallacy Three is that wealth can be redistributed by increasing present taxes and inventing new ones.

The reality is that wealth is created by the thrift, enterprise and effort of free individuals working to improve their families' future. If these burdens are too high, their effort is diminished and there is less to distribute.

Fallacy Four is that workers and consumers would gain from having nationalised monopolies to control the means of production, distribution and exchange.

The reality is that progress depends on competitive enterprise conducted by people with a stake in its success.

You may ask whether the North Sea Oil Bonanza will not retard this learning process. Won't the temptation be to regard this good fortune as a windfall to enjoy, careless of tomorrow?

True, North Sea Oil could be wasted by being used to give electors immediate improvements in living standards, while little or nothing is done to cure our deep-seated difficulties.

Were this to happen, then, after a short spending spree, we could find ourselves with too few competitive industries and with no new assets put aside to replace the wasting asset of oil which we have run down.

But informed public opinion is alert to this danger, and would expose any cynical attempt to use the oil to lubricate an election victory.