What is Thatcherism?
Thatcherism is the set of policies and ideas associated with Margaret Thatcher, Conservative prime minister of the United Kingdom from 1979 to 1990. It combined economic liberalism, including privatization, deregulation, lower income taxes and control of inflation, with a conservative emphasis on national sovereignty, law and order, and personal responsibility. Thatcherites rejected the postwar consensus in Britain, under which governments of both main parties had accepted nationalized industries, strong trade unions and Keynesian demand management. The term also refers to Thatcher's style of leadership, which supporters saw as resolute and critics as divisive. Some political scientists summarize Thatcherism as the combination of a free economy and a strong state.
Core beliefs
- Free markets and private enterprise create prosperity better than state ownership.
- Controlling inflation and sound money should take priority over demand management.
- Trade union power should be limited by law.
- Taxes and public spending should be reduced where possible.
- Individuals and families, not the state, carry primary responsibility for their lives.
- A strong state is needed for defense, policing and national sovereignty.
- Wider ownership of homes and shares encourages independence and enterprise.
History
Thatcherism took shape in the 1970s, when Britain faced high inflation, industrial disputes and an International Monetary Fund loan in 1976. Keith Joseph, who co-founded the Centre for Policy Studies in 1974, promoted free-market ideas drawn from Friedrich Hayek and Milton Friedman. Thatcher became Conservative leader in 1975 and won the 1979 election. Her government initially pursued monetarist targets, and unemployment rose above three million in the early 1980s. The Falklands War of 1982 strengthened her standing before her 1983 election victory. The Housing Act 1980 gave council tenants the right to buy their homes, and British Telecom, British Gas and British Airways were privatized between 1984 and 1987. Laws restricting strikes and the closed shop were passed, and the government defeated the miners' strike of 1984 and 1985. The City of London was deregulated in the 1986 Big Bang. Opposition to the poll tax and divisions over Europe contributed to her resignation in November 1990.
Variants
Economic Thatcherism stressed monetarism, privatization and deregulation. Its social and political side stressed law and order, traditional values and a firm stance against the Soviet Union. Later Thatcherites, especially after the Bruges speech, became strongly Eurosceptic, and many supported Brexit. Thatcherism is often grouped with Reaganism in the United States as part of the New Right.
Criticisms
Critics on the left argue that Thatcherism caused mass unemployment, destroyed industrial communities, especially in coal mining areas, and widened inequality. Some economists argue that privatization created private monopolies and that revenue from North Sea oil masked economic weaknesses. One-nation Conservatives criticized its break with paternalist traditions and its remark that there is no such thing as society, a phrase from a 1987 magazine interview whose meaning is still debated. Others criticized the poll tax and the centralization of power. Supporters credit it with reducing inflation, reviving productivity and ending frequent large strikes.
In practice
Thatcherite policies reshaped Britain through privatization, reduced union membership and a large expansion of home ownership. Many reforms were retained by later governments, including Tony Blair's New Labour. Privatization programs inspired by Britain spread to many countries in Europe, Latin America and the former Soviet bloc during the 1980s and 1990s.