Margaret Thatcher’s legacy for business and economics—the world weighs in

Margaret Thatcher.
Margaret Thatcher.
Image: Getty Images/Anwar Hussein Collection
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Despite the fact that her tenure as prime minister ended nearly 25 years ago, Margaret Thatcher continues to divide opinion. Here’s a roundup of views on her economic and business legacy:

Deregulation made the UK a financial powerhouse…

“Margaret Thatcher wanted us all to be a nation of shareholders and the privatizations of the 1980s, which I watched with amazement as a student at the London School of Economics, created a truly ‘popular’ capitalism. Consequently the UK has the most powerful stock market in Europe and I am proud that the airline I created is now on the FTSE list of quoted companies.” —Stelios Haji-Ioannou, EasyJet founder

…and Thatcher’s privatization and union-busting revitalized the UK economy…

“She basically came along and correctly diagnosed a huge problem with British society which was that its socialist state had become dysfunctional beyond any means of repair, that the unions had basically choked large amounts of economic activity. the private sector was slowly declining but the public sector was growing bigger even as its efficiency was declining. Britain was basically becoming … a Eastern European country.” —writer Andrew Sullivan (video)

…even though it meant high unemployment.

“[O]nce Mrs. Thatcher became prime minister and set about completely restructuring Britain’s unproductive and uncompetitive manufacturing industry, unemployment actually doubled to over three million (11.2%) by the time of the subsequent general election in 1983, which she won by a landslide. The British economy and people adapted themselves to the historically high unemployment rates, rightly considering them a necessary price to pay for a return to competitiveness and higher productivity. It took 20 years for the rate to fall back to the 1978 level.” —Andrew Roberts, historian

Or her policies sowed the seeds of wage inequality…

“I agree that she was right to emphasize the importance of enterprise, but what she didn’t do was extend enterprise to all. What she created was a relatively unstable and volatile economy, and we had to come in and make the Bank of England independent. All major problems that British people faced—the public services and their quality, the infrastructure for transport, under-investment in education, lack of community, an increasing sense of unfairness, Britain’s role in Europe and the world unresolved, had not in the end been resolved by the Thatcher leadership.” —Gordon Brown, former UK prime minister

“[Thatcher reforms] did not improve the response of real wages to unemployment nor the transition for men out of unemployment, and were accompanied by rising wage inequalities that do not seem to reflect the working of an ideal market system….Indeed the observed outcomes raise the disheartening possibility that the reforms in fact brought the UK a mixture of the worst of two possible worlds: the massive wage inequality of the decentralized US labor market together with high and lengthy spells of unemployment, European-style.” —David G. Blanchflower and Richard B. Freeman, economists (pdf)

…and her supply-side reforms strengthened Big Business at everyone else’s expense.

“Thatcher’s cheerleaders and the country’s wider elite are convinced her years in power and her legacy of deregulation and privatization have been a feast of general prosperity, even when that’s not remotely borne out by the facts. For while the issue of social power was settled for at least a generation and industry restructured in the corporate interest, the great leap forward promised for the economy never materialised. It’s not just that conventional growth has been sluggish over the last two decades. So have investment, ­productivity and manufacturing, while the quintessentially Thatcherite ­housing and finance boom fostered by her New Labour successors has driven the ­economy into a slump, discrediting the ideology that underpinned it in the process.” —Seamus Milne in The Guardian

Thatcher saved the UK from socialism and the world from totalitarianism…

“During that time, she rolled back the suffocating blanket of Big Government, sparking an economic revival. And she implemented a foreign policy based on the principle that British sovereignty and the freedom of all those under the protection of Great Britain shall not be violated. But it is her partnership with Ronald Reagan that we Americans think of first. It was characterized by loyalty, commitment and a jauntiness that proclaimed success was inevitable. As, indeed, it proved to be—both in domestic policy and in bringing down the Evil Empire of the Soviets without firing a shot.” —Jim DeMint, head of the Heritage Foundation

…or she was the right person at the right time.

“Thatcher’s strength derived directly from her limitations. If she had been better read, if she had been afflicted with imagination, if she had had a sense of humour, if she had had anywhere near as much insight into the lives of ordinary people as she claimed to have, she would have been unable to pursue her headlong career, riding roughshod over the consensus towards the property-owning debtor economy in which we now struggle. If socialism had been in better shape, she would not have been able to turn it into a dirty word or confuse it with totalitarianism and state monopoly capitalism. If the trade unions had not betrayed their own class, if they had understood the importance of organising all workers, including women, including those in the service sector, if they had not institutionalised inequality, the people might have defended the cause of labour. Thatcher thought that she and Reagan overthrew the Soviet Union, but the fact is that, like old Labour, it simply fell apart.”  —Germaine Greer, Australian academic

Thatcher’s embrace of monetarism and central bank reform helped create the UK of today…

“Faced with high inflation, Thatcher backed a monetarist approach that supported high interest rates and succeeded in sharply reducing inflation. Today Britain has an independent central bank with an inflation target of 2%.” —Martin Feldstein (pdf), economist

“Mrs. Thatcher’s success owes much to the intellectual revolution in economic theory. She did not invent anything new; there was nothing novel or original in her economic policies. However, while those ideas had been available for a long time, they had not been translated into policy changes until she came about. It was her leadership, courage, determination, and intellectual integrity that allowed those intellectual insights to inspire actual economic policies and change Britain.” —Sir Rhodes Boyson and Antonio Martino, economists

…or Thatcherite reforms hurt the UK’s competitiveness.

“When countries pursue more contractionary monetary policies than their trading partners, one important channel through which the monetary contraction takes effect appears to be through real appreciation of the exchange rate and a resulting loss of competitiveness in traded goods production. This has been dramatically illustrated by the experience of the UK under Margaret Thatcher.” —economist Paul Krugman

But she did save the UK from the euro…

“Right back in 1990, Mrs Thatcher foresaw with painful clarity the devastation it was bound to cause. Her autobiography records how she warned John Major, her euro-friendly chancellor of the exchequer, that the single currency could not accommodate both industrial powerhouses such as Germany and smaller countries such as Greece. Germany, forecast Thatcher, would be phobic about inflation, while the euro would prove fatal to the poorer countries because it would ‘devastate their inefficient economies.'” —Peter Osborne in The Telegraph

…though that legacy of “Euroskepticism” remains a source of friction today.

“Even now, after four years of low-to-no growth, we are a more economically confident nation than we were in the 1970s. For Britain, continental Europe no longer looks like a model to follow. Delors-style regulation has on the whole produced fewer jobs and lower growth than British-style deregulation.” —Andrew Gilligan in The Telegraph