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She was not for turning

Margaret Thatcher was responsible for changing the way in which governments thought about the economy.

india Updated: Apr 09, 2013 22:42 IST
Hindustan Times
political economy,Margaret Thatcher,Ronald Reagan

The political economy of the world can almost be divided as Before Thatcher and After Thatcher. Margaret Thatcher and Ronald Reagan represented the fight back by the conservative economic thinking that had been discredited by the Great Depression. Thatcher, though she led a much smaller and less successful economy, is more closely associated with this revival of free market policies than Reagan. That was because she stayed in office longer and she was far more strident, at times abrasive, in her views. She also had to fight a much more rigid British society. Her tumultuous battle with the Yorkshire miner unions was decisive and defining. And, finally, she was a woman. Thatcher's ability to break and rebuild an ossified British establishment was made all that remarkable by her gender. Her battles with her own male-dominated Tory party are a part of her political life that receive less attention than they should.

Thatcher was never able to transform Britain in quite the way she wanted. Government spending as percentage of GDP remained more or less constant before and after her prime ministership. Her microeconomic reforms helped pave the way for higher economic growth rates, but much of that happened after her term was over. Thatcher was far from a troglodyte right-winger: she supported gay rights and reformed divorce laws in favour of women. She took on privatisation largely to top up her treasury. While best known for her fierce opposition to the European Union and battling for the Falklands, she had no nostalgia for empire. She gave up Hong Kong without a murmur and would have dissolved the Commonwealth if she could have.

What Thatcher did accomplish was to transform the global narrative on political economy. After her, policy was all about how to inject the market back into the economy, limit the role of the state and promote the role of the entrepreneur. The global economic upswing that was experienced through the 1990s and the 2000s was a direct result of these policies. The true sign of her influence was that a new neoliberal consensus developed. Tony Blair and Bill Clinton made their left-liberal parties adopt much of what Thatcher accomplished. Even today, after another global financial crisis, it is remarkable how much of what Thatcher would have endorsed still remains embedded in the political firmament.

First Published: Apr 09, 2013 22:40 IST