In the years of economic turbulence that have followed the onset of the global financial crisis, a common lament has been the absence of effective economic leadership and an unwillingness to take tough decisions. The early obituaries and assessments of Margaret Thatcher offer a potent reminder of what determined economic leadership actually involves, along with the associated benefits and costs.
A quick scan of the pieces by Martin Wolf and Chris Giles in the FT, Larry Elliott in The Guardian and Nicholas Crafts at VoxEU, for example, brings home just how dramatic were the changes Thatcher brought to the UK economy: the liberalisation of exchange controls; financial deregulation and the 'Big Bang' that transformed the fortunes of the City of London; labour market reform and the effective defeat of the trade union movement; the taming of inflation; large-scale privatisation; the rejection of old-school Keynesian fiscal policy; an abortive experiment with monetarism; major tax reforms, including a significant shift in the income tax regime and a rise in the VAT; opening up to foreign investment; deregulation of the housing market, including the sale of council housing stock; and wide-ranging and often painful industrial restructuring, along with a retreat from traditional-style industry policies and subsidies.
The results of these policies were equally dramatic: on the one hand, a marked and positive transformation in the UK's relative economic performance that lasted almost three decades. On the other, big increases in inequality, deep divides in regional economic performance, and – looking back from our post-GFC world – a dangerous over-dependence on what turned out to be a risky financial sector.
No surprise, then, that to this day she remains a deeply divisive figure in UK politics.
Photo by Flickr user cseeman.