Only a handful of peacetime politicians can claim to have changed the world. Margaret Thatcher was one. She transformed not just her own Conservative Party, but the whole of British politics. Her enthusiasm for privatisation launched a global revolution and her willingness to stand up to tyranny helped to bring an end to the Soviet Union. Winston Churchill won a war, but he never created an “-ism”. The essence of Thatcherism was to oppose the status quo and bet on freedom: the right of individuals to run their own lives, as free as possible from micromanagement by the state.
In her early years in politics, economic liberalism was in retreat, the Soviet Union was extending its empire, and Milton Friedman and Friedrich Hayek were dismissed as academic eccentrics. The ideas of Friedman and Hayek persuaded her that things could be different. Most of this radicalism was hidden from the British electorate that voted her into office in 1979, largely in frustration with Labour’s ineptitude. What followed was an economic revolution. She privatised state industries, refused to negotiate with the unions, abolished state controls, broke the striking miners and replaced Keynesianism with Friedman’s monetarism. The inflation rate fell from a high of 27% in 1975 to 2.4% in 1986. The number of working days lost to strikes fell from 29m in 1979 to 2m in 1986. The top rate of tax fell from 83% to 40%.
For a world in desperate need of growth, this is the wrong direction. Europe will never thrive until it frees up its markets. America will throttle its recovery unless it avoids overregulation. China will not sustain its success unless it starts to liberalise. This is a crucial time to hang on to Margaret Thatcher’s central perception: that for countries to flourish, people need to push back against the advance of the state. What the world needs now is more Thatcherism, not less.
