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What Margaret Thatcher Understood About Income Inequality

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Margaret Thatcher once told an interviewer, “Of course, I am obstinate in defending our liberties and our law. That is why I carry a big handbag.” During her time as Prime Minister, Thatcher’s handbag became an iconic symbol of her ability to handle opponents. The term “handbagging” even entered the Oxford English Dictionary (the verb “to handbag” is defined as: (of a woman politician), treat (a person, idea etc) ruthlessly or insensitively) to describe her rhetorical style.

Thatcher’s handbagging usually occurred during Question Time, the hour every day when members of the parliament ask questions of government ministers—including the prime minister—which they are obliged to answer. A prime example is in her last appearance as Prime Minister in the House of Commons, on November 22, 1990. Liberal Democrat MP Simon Hughes taunts her on the subject of income inequality.

Mr. Hughes: There is no doubt that the Prime Minister, in many ways, has achieved substantial success. There is one statistic, however, that I understand is not challenged, and that is that, during her 11 years as Prime Minister, the gap between the richest 10 per cent. and the poorest 10 per cent. in this country has widened substantially. At the end of her chapter of British politics, how can she say that she can justify the fact that many people in a constituency such as mine are relatively much poorer, much less well housed and much less well provided for than they were in 1979? Surely she accepts that that is not a record that she or any Prime Minister can be proud of.

The Prime Minister: People on all levels of income are better off than they were in 1979. The hon. Gentleman is saying that he would rather that the poor were poorer, provided that the rich were less rich. That way one will never create the wealth for better social services, as we have. What a policy. Yes, he would rather have the poor poorer, provided that the rich were less rich. That is the Liberal policy.

Mr. Hughes: No.

The Prime Minister: Yes, it came out. The hon. Member did not intend it to, but it did.

As Thatcher might say, those concerned with income inequality many not intend for it to come out, but making the rich less rich is precisely what they want—indeed, it is the only thing that can solve the faux-problem of income inequality.

Consider the example given by Mr. Hughes that, “the gap between the richest 10 percent and the poorest 10 percent has widened substantially.” To simply the math, let’s say the bottom 10 percent in a country make between $0 and $10,000 a year while the richest 10 percent make an annual income of $100,000. That’s a minimum gap of $90,000 dollars.

Now imagine if the incomes doubled over a period of 10 years (and inflation stayed low). The poorest 10 percent would now make between $0 to $20,000 and the poorest would make $200,000. Everyone would appear to be better off yet income inequality also doubled. The gap is now $180,000—twice as much as it was a decade ago.

So is this a problem? It would only be a concern under three conditions: (a) if the income of the rich increased at the expense of the poor (through exploitation or injustice), (b) the increase was due to illegal activity, or (c) if you care about income inequality because you want to make the rich less rich, through confiscation or redistribution of income.

Preventing or correcting Condition B is a primary concern of the State while preventing or correcting Condition A is a primary economic concern of individual Christians. There are numerous Biblical injunctions and warnings against the injustice of allowing the rich to exploit the poor. But if that is not occurring, then Christians have no right to be concerned with how much income another person is generating. Jesus even told a parable about workers making different wages for the same work (Matthew 20:1-16). While the purpose of the parable was to teach us about the Kingdom of God rather than a managerial lesson on income parity, it does show that differences of income—even for the same work— is not inherently unfair.

Thatcher intuitively understood what her opponents were loathe to admit: They were less concerned about the plight of the poor than with the wealth of the rich. Even the liberal British expatriate Andrew Sullivan admits this was true of British liberals and socialists:

No culture I know of is more brutally unkind to its public figures, hateful toward anyone with a degree of success or money, or more willing to ascribe an individual’s achievements to something other than their own ability. The Britain I grew up with was, in this specific sense, profoundly leftist in the worst sense. It was cheap and greedy and yet hostile to anyone with initiative, self-esteem, and the ability to make money.

The clip below captures the left-liberal sentiment of the time perfectly. Yes: the British left would prefer to keep everyone poorer if it meant preventing a few getting richer.

Envy, even when is it disguised as egalitarianism, is a deadly sin. It is corrosive to the soul to envy the wealth of one’s neighbor and destructive to society when we desire the State use it’s power to redistribute the wealth of citizens simply to achieve the goal of more equalized incomes. Ms. Thatcher understood that concerns about income inequality were really about envy. She knew envy was consuming her opponents across the aisle, even though they couldn’t see what was hiding in their own hearts. We need to follow her example and expose income inequality for what it is, before it consumes our own nation as it did Great Britain.

Joe Carter Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).


  • Our Federal Reserve’s continued Easy Money policies are making the
    poor even poorer and the rich even richer. The Fed is printing trillions of
    dollars just to pump up the stock market, real estate and commodities. Poor
    renters not invested in the markets have gotten the shaft while rich investors
    just got richer after they were bailed out by the working classes because they
    were deemed Too Big To Fail by our rulers. Sorry Fools, but only God is Too Big
    To Fail!

  • Envy and hatred are poor foundations for public policy formulation, but they’re the core motivations behind complaints about income inequality.

    • emt22

      unless that income inequality is a function of rent seeking

  • guest

    “Jesus even told a parable about workers making different wages for the same work (Matthew 20:1-163). While the purpose of the parable was to teach us about the Kingdom of God rather than a managerial lesson on income parity, it does show that differences of income—even for the same work— is not inherently unfair.” Oh for crying out loud! The parable in Matthew 20:1-16 is, yes, not about money but about time (in a salvational context) in the first place and secondly, it describes the exact opposite scenario: getting the *same* income for *different* amounts of work! If anything, this parable, translated in monetary terms (which the author agrees it should not be), supports the exact opposite of what the author of this article wishes to promote. This is about as “labour market regulated” as things get… The friendly owner of the vineyard says: “My friend, it is none of your business if I wish to pay the man who started work as the day drew to a close a full day’s wages, since I am not treating you, who have worked the whole day, unfairly. You are receiving that which we have agreed upon at the start of the day, namely, a day’s wages, too” (paraphrased, read vv. 13ff). This is the best example of *income equality*, coupled with *work load inequality* one can come up with… :-) and as such, what Germans would call an “Eigentor” – a goal shot into your own side’s nets.

  • John Crockett

    The writer fails to understand income inequality. In his example inequality has not increased as every body has benefitted by the same rate (an increase of 100% of everyone’s incomes). The poor earn 10 times less than the rich in both the before and after examples.

    Income equality increases if the incomes of the richest grow faster than any of the groups below them. In your example, that the richest now earn 300,000 for example.

    What considering income equality requires you to do is consider who has benefitted most from a government’s policies. Simon Hughes’ question was to ask if Magaret Thatcher accepted that her policies had been most beneficial for the wealthy, and to consider whether the rich should be the priority beneficiaries of a government.

    Income inequality is not about redistribution, but distribution. The conservatives’ policy to privatise the mines and reduce the collective bargaining power of trade unions did not involve directly exchanging money from one income group to another, but they did set the rules of the game by which the benefits of national income are divided. And these rules were considerably more favourable to the rich minority than the poor. The question is therefore, does she believe that this is acceptable?